Should Governance participation be rewarded?

Governance is one of the most powerful ideas in DeFi but also one of the least used.

Bifrost has just introduced a proposal that directly addresses this problem:

Should active governance participation be rewarded with real economic incentives?

As someone who follows DeFi closely — especially the Polkadot ecosystem — I think this proposal is an important step forward, not just for Bifrost, but for on-chain governance design in general.

Let’s break it down in simple terms.

The Core Problem: Governance Is Undervalued

Right now, governance on many DeFi protocols (including Bifrost) faces a few common issues:

Many BNC / vBNC / bbBNC holders don’t clearly know where or how to vote

There’s often strong discussion, but low actual voting turnout

Governance feels like a “responsibility” rather than a rewarded action

At the same time, Bifrost has entered a new phase focused on buybacks and profit sharing.

That makes governance even more important — because decisions now directly affect long-term value.

So the question becomes:

How do we turn passive token holders into active protocol participants?

The Proposal: Incentivize Governance Participation

Bifrost is asking the community to choose one of two incentive models, via on-chain voting.

👉 You vote AYE on the option you support, and NAY on the other.

👉 The winning option will be implemented.

Option A: Governance Participation Affects bbBNC APY

🔗 Referendum: bifrost[.]subsquare[.]io[/]referenda[/]189

How it works (simplified):

If you actively participate in governance, your bbBNC APY increases

If you stay inactive, your yield may be lower

Governance becomes part of the core yield logic, not a side activity

Key characteristics:

Long-term, structural incentive

Strong alignment between governance and economic value

Requires on-chain upgrades and more development time (≈ 6 months)

Option B: Governance Participation Earns Lottery Tickets

🔗 Referendum: bifrost[.]subsquare[.]io[/]referenda[/]190

How it works (simplified):

Each governance action earns lottery tickets

Periodic draws distribute rewards from a prize pool

More participation = more chances to win

Key characteristics:

Fast to launch (≈ 2 months)

No on-chain logic changes required

Flexible campaign-style incentives

Rewards are probabilistic, not guaranteed

UX Improvements (Regardless of Option)

No matter which option wins, Bifrost will upgrade its governance UX:

Clear proposal list with voting stats

One-click participation using BNC / vBNC / bbBNC

Transparent display of voting status and lock conditions

Depending on the chosen option, users will also see:

APY impact dashboards (Option A), or

Lottery pages with tickets, pools, and draw info (Option B)

This is already a big win for accessibility.

My Personal Take as a DeFi & Polkadot Content Creator

Both options are valid — but they serve different goals.

Why Option B Makes Sense Short-Term

If the goal is:

Quick participation boost

Low technical risk

Immediate feedback on incentive effectiveness

👉 Option B is very practical.

Lottery-style rewards are familiar in crypto and can attract casual users who normally ignore governance.

Why I Personally Lean Toward Option A

From a long-term protocol design perspective, I find Option A more compelling.

Why?

It treats governance as productive work, not a game

It aligns yield, ownership, and responsibility

It encourages consistent participation, not one-off actions

It strengthens bbBNC as a “governance-aligned asset”

Yes, it’s more complex and slower to ship — but structurally, it’s closer to what mature DeFi governance should look like.

If Bifrost wants governance to be a core pillar, not a marketing campaign, Option A sets a stronger foundation.