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Venus (XVS) Review: The Next Binance Smart Chain Gem?

Have you heard about Venus (XVS)? In the conventional finance scheme, users must go through a slew of procedures in order to obtain a loan, from KYC systems to credit background checks and days or weeks of waiting for confirmation. Furthermore, the centralized provider has the discretion to refuse you a loan at any time. Not to mention the vulnerability issues posed by centralized platforms due to their single point of failure.

DeFi, for its part, has transformed the crypto field by offering blockchain-based goods and services that are open, cryptographically stable, and independent of third-party authorities/decision-makers. However, there is a problem with DeFi: both of these platforms are based on Ethereum, which has had scalability issues since its inception. Slow, expensive transfers and a mediocre user interface result from a lack of scalability.

Again, these protocols lack the strong market capitalization that would enable them to draw more users or place themselves at the top of the chain. There is also the less-obvious problem of some of these systems not being completely decentralized — particularly at the beginning. The platform, not the consumers or the society, would be controlled by equity owners on such a platform.

Before you proceed reading, here’s a beginners video about Venus Protocol:

Venus’s Solution

Venus aims to solve these issues by creating an atmosphere in which a conventional solution is woven into the framework of creating synthetic stablecoins. On the Binance Smart Chain, users would be able to experience high-speed transfers with low transaction costs. There are several possibilities: invest collateral, collect interest on collateral, leverage against collateral, and mint stablecoins in seconds.

What Exactly Is Venus on Binance?

Venus is a synthetic stablecoin protocol and algorithmic money market protocol that has been launched exclusively on Binance Smart Chain (BSC).

The protocol brings a basic crypto asset lending and investing approach to the decentralized finance (DeFi) ecosystem, allowing consumers to directly invest against collateral at a fast speed while losing less transaction costs. In addition, by posting at least 200 percent collateral to the Venus smart contract, users can mint VAI stablecoins on-demand in seconds.

VAI tokens are synthetic BEP-20 token properties that are pegged to the amount of one US dollar (USD), while XVS tokens are still BEP-20-based, but are used for Venus protocol regulation and can be used to vote on changes such as introducing different collateral forms, modifying conditions, and arranging product updates.

Since the Venus owners, staff managers, and other consultants do not have any XVS token allocations, the protocol is completely regulated by XVS group members.

Venus has first concentrated on community development in Asia, Europe, and North America, using its social and influence from the Swipe team, and eventually extended to other regions as the project expands.

Venus’s current neighborhood growth plans include:

  • AMAs are being kept for other Binance Smart Chain programs.
  • Publishing material and news about the DeFi money market on a regular basis.
  • Organizing and attending DeFi and blockchain conferences, forums, and meetups.
  • Collaboration of pre-existing Binance Smart Chain protocols.
  • Medium publishes weekly newsletters.
  • Actively engaging with the public via social media.

Venus’s future neighborhood development plans include:

  • Developing Governance Pools
  • Campaigns based on liquidity rewards are being launched.
  • Creating fresh collateral to allow other communities to join the protocol

People Behind Venus

The Swipe project team is in charge of the Venus project’s production. Venus’s key aim is to promote decentralization through group governance. There are no pre-mines for the team, creators, or founders, allowing XVS holders complete influence over the Venus Protocol’s future direction.

What’s special about it?

Venus’ key asset is its lightning-fast processing pace and relatively low transaction costs, which are a direct consequence of its construction on top of the Binance Smart Chain. Because of its near-instant transfers, the protocol is the first to enable consumers to enter lending markets for Bitcoin (BTC), XRP, Litecoin (LTC), and other cryptocurrencies to source liquidity in real-time.

Customers obtaining liquidity via the Venus Protocol do not need to undergo a credit review and can obtain a loan easily by communicating with the Venus decentralized program (DApp). Users are not limited by their regional area, credit score, or anything else since there is no centralized authority in position, and can still source liquidity by posting ample collateral.

These loans are made possible by a pool of funds donated by Venus users, who obtain a variable APY in exchange for their contributions. These loans are backed by creditors’ over-collateralized investments on the website.

To prevent market abuse assaults, the Venus Protocol employs price feed oracles, such as those provided by Chainlink, to provide reliable pricing details that cannot be tampered with. Because of the Binance Smart Chain, the protocol will access price feeds at a lower cost and with greater reliability, lowering the system’s total cost footprint.

How Much Is the Current Circulation of Venus (XVS) Coins?

Venus has a cumulative stock of 30 million XVS tokens, with slightly more than 4.2 million XVS tokens in use as of November 2020.

Venus was one of the first sites to run a Binance Launchpool, allowing users to farm XVS by staking various properties such as Binance Coin (BNB), Binance USD (BUSD), and Swipe (SXP). A total of 20% of the total supply (6 million XVS) was distributed to the Binance Launchpool, and the token was listed on the Binance spot trading website shortly after.

There was no pre-sale or private sale for the launch, and the team has no token distribution, but 1% of the overall supply (300,000 XVS) is allocated for Binance Smart Chain ecosystem grants. The remaining 23.7 million XVS tokens will be eventually unlocked over the course of four years when they are mined by Venus protocol users.

According to the project white paper, creditors receive 35% of regular XVS incentives, suppliers receive 35%, and VAI stablecoin minters receive the remaining 30%

How Does the Venus Protocol Work?

Depositing Assets

Venus users may deposit all of the protocol’s approved digital properties. Borrowers will withdraw these assets and invest them in the economy. In exchange, fund suppliers — or stakers — can collect returns on their deposits.

As users provide collateral, they act as lenders while still contributing to the protocol’s stability. Both stored funds are pooled such that users can withdraw some or all of their supply at any time as long as the protocol balance remains positive.

Through supplying crypto to the protocol, you can receive a vToken (vETH, vBTC, vUSDC, etc.) Only vTokens may be used to reclaim the underlying crypto that was stored. After you redeem the cryptocurrency, you would be able to gamble against other assets in the market or transfer it to offline wallets that endorse Binance Smart Chain.

Borrowing Assets

You must stake collateral in order to borrow properties from the platform. The collateralized assets should be over-collateralized, covering at least 75% of the loan value. The collateral ratio would be determined by the society via a governance mechanism. Once you have deposited the collateral, you will borrow a sum depending on the collateral ratio of the specific commodity.

Typically, collateral ratios range between 40 and 75 percent. For example, if ETH has a collateral ratio of 75%, this implies you may borrow up to 75% of the valuation of your ETH. However, if the collateral worth falls below 75%, the properties can be liquidated. To return the collateral, the creditor must compensate both the borrowed balance and the accrued interest.

Architecture of Protocols

Venus’s technology is a fork of the MakerDao and Compound protocols. The following components comprise the architecture:

Controller Smart Contract

The controller contract on Smart Chain functions similarly to a decentralized processor, allowing communications with all other smart contracts on the network. Tokens are not automatically supported by the Venus protocol. It would instead serve specific sectors that have been whitelisted by the Controller deal. The controller contract gains access to whitelist markets by deploying the protocol’s help Market admin feature. Until executing a protocol connection or function, it must be checked on the controller contract.

Collateral Worth

When a consumer deposits, borrows, or mints from the protocol, they are often doing so with the underlying asset, which is normally held as leverage. The underlying properties are held as leverage and have dollar amounts attached to the vTokens. These leverage prices are derived from current market conditions in order for this to function correctly.

Venus’s Governance Approach

The Venus team places a high value on group governance. For the team, foundation, and creators, there were no pre-mined tokens. As a result, users who mine the Venus Token would have the leverage of how the network operates.

Among the governance characteristics are, but are not restricted to:

  • The protocol’s implementation of new assets
  • Market rate adjustments
  • Interest rates for synthetic assets are set
  • Proposals for protocol upgrades are being voted on

The XVS Token

The Venus Token, the platform’s native token, governs Venus (XVS). The token was intended to be a “fair launch,” which meant that no tokens were pre-mined for the team, consultants, or the Foundation. Tokens can only be obtained by participating in the Binance Launchpool project or by adding liquidity into the protocol.

Initially, 20% (6,000,000) of the overall supply would be allocated to the Binance Launchpool programme. The remainder would be allocated to the protocol, with 23,700,000 XVS mined during the next four years at an average rate of 18,493 every day. Borrowers will receive 35% of the prize, suppliers will receive 35%, and stable coin minters will receive 30%. After 10 million tokens have been mined, XVS will become the protocol’s official governance tool. In the meantime, an intermediate token called ‘Swipe Token’ (SXP) is being used for this reason.

How Safe Is the Venus Network?

The Binance Smart Chain, a blockchain that operates alongside the Binance Chain, protects the Venus network. BSC is compliant with the Ethereum Virtual Machine (EVM) and will continue to operate even though the Binance Chain goes down or faces problems.

Binance Smart Chain secures the blockchain by using a special consensus algorithm known as proof-of-staked authority (POSA). This is a composite consensus process that incorporates elements of both proof-of-stake (POS) and proof-of-authority (POA). It is based on a network of 21 validators who are in charge of completing tasks on the Binance Smart Chain and finding agreement on recently processed transactions.

Aside from that, Venus suppliers are secured by automatic liquidation measures, which would immediately liquidate creditors’ collateral if it slips below 75% of their lent value, reimbursing suppliers early to ensure the minimum collateralization level.

Final Thoughts on Venus XVS?

The key goal of the Venus Protocol was to provide a shared network that would provide its users with a healthy and secure marketplace where they could conduct practices such as aggregated lending, earning interest and reliable mining in a secure manner. Since it is entirely based on the Binance Smart Chain, it excludes all disadvantages of the Ethereum blockchain. Both of these advantages result in a managed and scalable approach in the marketplace. Users’ protection and welfare were jeopardized as a result of the volatile business dynamics. As a result, the Venus protocol is evolving as a dependable and reasonably simple platform for consumers. People may still use sites like swap zone to get their hands on Venus and XVS tokens, since their user-friendly design offers instant results without requiring any additional time.

Venus has joined several protocols that deliver the same commodity — will it remain ahead of the competition? We’ll keep an eye on it and see how it develops.

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Max Neuhaus

Max Neuhaus

Crypto investor and trader :: Follow me for info

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