Venus (XVS) is a DeFi lending platform that works as an algorithmic money market on Binance Smart Chain, which makes the lending platform permissionless. This mechanism enables users to instantly borrow and lend without intermediaries. In this system, borrowers can borrow crypto-based loans at lower fees, and lenders are incentivized to provide loan services.
Venus (XVS) is a DeFi lending platform that works as an algorithmic money market on Binance Smart Chain, which makes the lending platform permissionless. This mechanism enables users to instantly borrow and lend without intermediaries. In this system, borrowers can borrow crypto-based loans at lower fees, and lenders are incentivized to provide loan services.
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Lending
If you want be lender, you have to deposit coin at Venus like a liquidity provider. For example, If you deposit ETH, Venus will mint the vETH for you and you will got an Annual Percentage Yield or APY by Venus like this
Example
-Redeem
If you want redeem, you can redeem and venus will burn vToken that you have. you can withdraw the coin back. like a picture.
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Borrowing
If you want to borrow cryptocurrencies, stablecoins, or digital assets from Venus, you must pledge collateral that will be locked on the protocol.These assets must be over collateralized and will enable up to 80% of that collateral value borrowed.However, if a user’s collateral value drops below 80%,it could cause a Liquidation.You must be careful not to cause liquidation by keeping the value of the collateral you initially deposited higher than the threshold set by the protocol by adding collateral.
Example
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Staking
you can staking those coin and get the APY follow this picture.
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Stable coin
VAI is stable coin of venus protocol which using the vTokens from the underlying collateral that they have previously supplied to the protocol to mint VAI. Users can borrow up to 50% of the remaining collateral value they have on the protocol from their vTokens to mint VAI. that mean they backing VAI by Cryptocurrency Collateralized.
For example, If your vTokens value is $100, you can mint up to 50 VAI.
We can take VAI to staking or swap to other coins such as USDT,USDC etc.
Venus control the pegged of stablecoin by
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Max Supply: This determines the maximum number of synthetic stablecoins units can be minted at any given point to determine the synthetic stablecoins maximum supply.
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Interest Rate: The interest rate parameter controls how much in interest fees the user pays for minting these synthetic stablecoins.These interest rates go directly into the Reserve Factor community funds.
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Collateral Ratio: Each synthetic stablecoin will be a liquidation price. These liquidation prices are controlled by the Collateral ratio for each synthetic stablecoin.
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Penalty Ratio: If a liquidation occurs, there will be a penalty percentage you must pay the protocol. This penalty ratio is set by the protocol.
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Governance
If you have XVS token in your wallet. you have the right to vote the proposal in the community or direction of the protocol
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Tokenomics
There will be an initial 20% of the total supply of 30,000,000 (6,000,000 XVS) allocated to the Binance LaunchPool project where users can mine (farm) these tokens alongside 1% of the total supply (300,000 XVS) placed aside for the Binance Smart Chain ecosystem grants. The remainder of the supply will be exclusively available for the protocol, which will result in 23,700,000 XVS mined over a period of approximately four years, which begins after the Binance LaunchPool event at a rate 0.64 XVS per block (18,493 per day).
Venus will take all of the profit to manage tokens according to this table
Ref: https://venus.io/Whitepaper.pdf
https://community.venus.io/top
This article is a part of the class “751471 Economics of Decentralized Finance (DeFi)”
supervised by Asst. Prof. Napon Hongsakulvasu
Faculty of Economics, Chiang Mai University
This article was written by
621615012 Jirapat Wongsaratana
621615060 Wutthiphat Wongwan