When Bifrost and Hydration join hands: What new possibilities can Gigadot bring to Polkadot DeFi?

Innovative DeFi Product: Bifrost and Hydration launched Gigadot, a DeFi product enabling DOT users to maximize asset efficiency through one-click operations, combining staking, lending, and liquidity pool benefits.
Cross-Chain Liquidity: Gigadot leverages Bifrost's vDOT and Hydration's infrastructure to solve Polkadot's liquidity fragmentation, using XCM for seamless cross-chain communication and real-time data synchronization.
Revenue Streams: Users earn multiple yields, including staking rewards, lending interest, transaction fees, and incentive tokens (HDX, BNC), with optional "Looping" strategies to amplify profits.
Simplified UX: Initially complex, Gigadot now offers a streamlined interface where users can participate by holding DOT or USDT, masking cross-chain complexities.
Security & Flexibility: Benefits from Polkadot's shared security and adapts to ecosystem upgrades (e.g., async backing, Asset Hub migration) without disruptive changes.
Future Plans: Expansion to include vBNC liquidity, integration with Hydration’s Hollar stablecoin, and potential new use cases like fee payments or settlement assets.
Developer Support: Hydration encourages community-driven proposals via OpenGov, with funding pathways for approved projects.

Gigadot exemplifies Polkadot’s modular synergy, enhancing DeFi composability and cross-chain efficiency.

In the Polkadot ecosystem, cross-chain liquidity and asset efficiency have always been the core challenges faced by DeFi applications. Bifrost, as a cross-chain staking protocol on Polkadot that focuses on liquidity release, is committed to providing users with a more flexible way to use staking assets. Hydration has built a full-chain DeFi infrastructure based on the Polkadot SDK that covers modules such as exchange, lending, and stablecoins, and is uniformly integrated into the scalable Appchain architecture.

Recently, Bifrost and Hydration jointly launched the innovative DeFi product Gigadot , which provides DOT users with a more efficient way to use funds through one-click operation and multiple benefits, and also opens up a new exploration of Polkadot cross-chain DeFi. After the product was launched, the market response was enthusiastic, and the TVL once exceeded 35 million US dollars, becoming one of the most watched experimental projects in the ecosystem.

At the second Polkadot Open Call online event on May 22, OneBlock+ specially invited Tyrone, head of Bifrost DevRel, and Ben, head of the Hydration ecosystem , to jointly conduct an in-depth analysis of Gigadot's product logic, technical implementation, and ecological significance, and to give everyone a comprehensive understanding of this new type of composite DeFi product on Polkadot.

📺 Live replay link:

https://x.com/i/broadcasts/1lPKqMwOyMdKb

📚 Gigadot's philosophy and original intention

The core concept of Gigadot is "one deployment, multiple benefits". Tyrone, head of Bifrost DevRel, said that traditionally, users have to put DOT into pledge, lending or liquidity pools separately, which is a cumbersome process and has low asset utilization. The emergence of Gigadot has opened up these complex operation paths, allowing users to complete simple operations while obtaining multiple sources of income.

Ben, head of the Hydration ecosystem, added that in the Polkadot ecosystem, DOT is the main pledged asset. In the past, once DOT was pledged, it could no longer be used for other purposes, such as lending or liquidity provision.

Bifrost's vDOT solves this problem and builds a dedicated application chain to provide liquidity support. Hydration has tried to encourage users to provide liquidity for DOT/vDOT through an incentive mechanism, but the high incentive cost limits the effect. To this end, they designed a new mechanism similar to a stablecoin pool, but it does not require a 1:1 fixed anchor. Instead, DOT and vDOT are freely exchangeable at the real-time exchange rate, which improves liquidity and allows vDOT to be used as a loan collateral asset.

Gigadot further connected the liquidity pool and lending module on this basis. Users pledge DOT as vDOT, form LP with aDOT, and then use LP as collateral to lend funds, realizing recycling and obtaining dual benefits of staking and lending.

🏄 How does Gigadot solve the cross-chain liquidity problem?

One of the goals of Gigadot’s design is to integrate and amplify the path to revenue. Looking back at the early days of the Polkadot ecosystem, many teams independently developed LST, built liquidity pools, and issued incentives, forming a series of fragmented product lines.

Ben said that Hydration hopes to avoid reinventing the wheel and directly integrate Bifrost's mature vDOT. With the help of XCM cross-chain communication and Polkadot's shared security mechanism, it can save development and incentive costs and demonstrate the advantages of Polkadot's modular collaboration.

Bifrost DevRel Director Tyrone added that currently if users want to use vDOT on Hydration, they must first pledge DOT on Bifrost to get vDOT, and then transfer it to Hydration through XCM, which is a slightly complicated process. In the future, Hydration will support "one-click staking", where users can complete the operation directly on its platform, and the system will automatically communicate with Bifrost through XCM and return vDOT, which will significantly improve the user experience.

Ben further explained that vDOT's on-chain price anchoring does not rely on traditional oracles, but synchronizes Bifrost data in real time through XCM, which is safer and more resistant to manipulation. The recent surge in XCM messages between Hydration and Bifrost also shows that the cross-chain mechanism has been running stably.

🛠️ Technical architecture and security

Gigadot is a very complex product with multiple functional levels. The early user interface was criticized for being too long and having too many steps. Ben, head of the Hydration ecosystem, said that it has now been simplified to the point where users only need to hold DOT or USDT to "get Gigadot with one click."

Gigadot consists of two types of assets: one is DOT derivatives from other chains (such as vDOT), and the other is ERC-20 DOT derivative assets in Hydration's own lending market. These assets are jointly added to the stable pool as collateral and participate in the lending market.

Gigadot is an ERC-20 token based on the Rebase mechanism, and its value will automatically adjust with the underlying asset income. Usually, cross-chain assets need to be wrapped, but Gigadot shields this complex process through a one-click design. With the advancement of Polkadot Asset Hub, Hydration will further optimize cross-chain support in the future to maintain a simple user experience.

In terms of security, Gigadot benefits from the shared security mechanism of the Polkadot main chain and does not need to worry about the security of underlying assets.

💰 How to maximize Gigadot benefits?

Gigadot aggregates multiple revenue streams, which currently include:

Lending interest : aDOT is invested in the lending market to earn interest;
Staking income : vDOT continues to generate staking income;
Transaction fees : aDOT and vDOT are added to the stable pool to generate transaction fee income;
Incentive tokens : Users holding Gigadot can receive three types of incentives - Gigadot, Hydration's native token HDX and Bifrost's native token BNC;
Asset appreciation : The appreciation of underlying assets and fee income drive the price of Gigadot up.

Users can also amplify their profits through the "Looping" strategy: use Gigadot as collateral, borrow DOT, and then exchange it for more Gigadot, repeating the operation multiple times to stack profits. As long as the yield of Gigadot is higher than the lending rate, this method can continue to amplify profits.

Tyrone, head of Bifrost DevRel , added that since the four assets, vDOT, aDOT, Gigadot and DOT, are highly correlated in price, they will float synchronously when the market fluctuates, so the risk of liquidation is relatively low.

In addition, Bifrost has established a transparent asset monitoring panel, where users can check vDOT's reserve rate, pledge status and other information at any time to ensure that each asset has 100% on-chain reserve support.

🗺️ The impact of Polkadot mechanism evolution on Gigadot

Both Hydration and Bifrost have very active development teams behind them. Ben, head of the Hydration ecosystem, mentioned that the team will closely monitor each SDK upgrade and evaluate the impact on the existing system. Although some upgrades may bring major changes, there are currently no updates that have a destructive impact on Gigadot, and the overall architecture has good flexibility.

At present, the entire Polkadot DeFi ecosystem is still in its early stages, and most users are only satisfied with staking DOT to obtain basic returns. However, over the past year, more and more people have begun to participate in LP and DeFi products. Gigadot is a typical example. It provides new uses for DOT and brings more diverse ways to participate in the ecosystem.

Bifrost DevRel leader Tyrone revealed that Bifrost is currently working with Parity to promote the migration of the pledge system from Relay Chain to Asset Hub. In addition, Polkadot is also promoting some major upgrades recently, such as asynchronous support (async backing), shortening the block time to 6 seconds, and adjusting the pledge mechanism.

Tyrone said that despite frequent technological updates, Bifrost's staking mechanism has always been stable and actively adapted to the new system, so he remains confident in the future development of Gigadot.

📌 Gigadot's future and product planning

Ben, head of the Hydration ecosystem, said that the cooperation between Hydration and Bifrost is very close, and more GIGA series products will be launched in the future. Currently, they are planning to introduce Bifrost's vBNC into the Hydration stable pool and use a mechanism similar to Gigadot to improve its liquidity.

In addition, Gigadot can also be used as one of the important collateral assets of Hollar stablecoin . There are many ways to achieve this, and it is not limited to looping. Users can also use it to borrow other assets.

Hollar is an overcollateralized stablecoin with a fixed annual interest rate. Compared with floating-rate assets such as USDT/USDC, it is more suitable for user cost estimation. This mechanism is also expected to lead to the emergence of more new use cases, such as integrating Hollar as a transaction fee or a stable settlement asset. The specific implementation depends on the system design of each chain.

🌖 What funding mechanisms are there for developers?

Hydration itself is built on Substrate, but it also integrates the EVM environment. However, the deployment of smart contracts on the chain needs to be reviewed through the whitelist mechanism, which is to protect the resources on the chain from being abused.

Ben, the head of the Hydration ecosystem, said that in terms of funding, Hydration's treasury also uses the OpenGov mechanism, which is consistent with projects such as Bifrost. Ben strongly recommends that developers start discussions on Discord or forums before formal development to see if HDX holders are interested in the idea, so as to avoid investing a lot of time only to find that the community is unwilling to support it.

In short, if you have an idea, you can start from here. There are clear reward and support paths within the ecosystem.

🚩Conclusion

Gigadot is not just an attempt at functional integration, but also a deep exploration and productization of the cross-chain collaboration potential of Polkadot. Through one-click combination, cross-chain integration, and multiple benefits, it brings true DeFi composability to Polkadot.

In the future, Polkadot will demonstrate its unique value of modularity and composability, continue to inject new momentum into the development of multi-chain DeFi, and drive the entire ecosystem towards a more open and efficient financial future.