xVVS is Coming! VVS Mechanics Upgrade
Driven by the will to give our community more and more VVS utility and the power to influence decisions and incentivize active participation, we want to share more details about xVVS!
The xVVS smart contract is currently undergoing a security audit, but we wanted to share more context gearing up for the xVVS launch.
TLDR: xVVS is a token you receive only in exchange for staking VVS; there will be three main perks for the xVVS holders and value accruing benefits for the platform as a whole:
- Revenue Sharing
- xVVS Vaults
- Governance (Future Launch)
What is xVVS
xVVS is VVS Finance’s yield-bearing governance token. You can only get xVVS by staking VVS. Its value starts from 1 VVS = 1 xVVS and appreciates over time as a portion of the platform revenue goes to buyback VVS and is divided up proportionally among xVVS holders in the pool.
Going into more details of our buyback mechanism, as we will continuously and consistently spend a significant portion of our profits that are generated from token swapping on buying back VVS and adding them into the pool, therefore, the price value of xVVS will gradually increase over time compared to VVS.
- Revenue Sharing — To give back to our supportive and loyal community, VVS decided to give away most of our treasury to buy back VVS, so that our miners can be further benefited from our platform. Currently, when users make a swap, VVS charges a 0.3% fee for the trade, in which 0.1% goes to our treasury and 0.2% goes to our LP providers. With the launch of xVVS, we decided to contribute 0.08% of the 0.3% platform profits on buying back VVS from the market. At the same time, the remaining 0.2% fees currently going to LP providers will remain unchanged as they are the essential backbone of VVS. Purchased VVS will be automatically distributed proportionally among all xVVS holders.
- xVVS Vaults — VVS greatly appreciates the trust and support from our lovely miners, therefore, we want to reward our long-term token holders by rolling out a new token locking feature- xVVS Vaults. Using xVVS Vaults, our miners can lock their xVVS into the vaults to earn VVS without any impermanent loss! With high community demand, we have also added a locking mechanism to reward long-term holders and supporters. There will be a range of locking periods, including 1-week, 6-month, 24-month, and 48-month; rewards will increase exponentially based on the duration you lock for.
- Governance — Our community always comes first. Your comments and opinions mean a lot to us. In the past 4 months, we have seen numerous constructive suggestions and valuable feedback from our VVS community on various social platforms. We believe our community will love the upcoming governance feature that allows our VVS supporters to submit and vote for proposals. What better than staking xVVS to represent commitment and voting power for VVS? The amount and duration of locking your VVS will determine your voting power. This will also attract other protocols accumulating and locking VVS; read more below!
How would xVVS impact VVS Finance
xVVS is inspired and builds upon successful mechanics from other protocols such as Sushiswap (xSushi), Trader Joe (xJoe), and Curve (veCurve). In this section, we want to add more color to all the benefits this mechanic can bring to the VVS community and VVS token holders.
- More Locked Tokens = Less Circulating Supply
- Higher Utility = More Demand
When there is less circulating supply (VVS being locked) and more demand (utility and governance), the expected outcome will be lower selling pressure and higher value accruing to the VVS ecosystem. Certainly, there are many other forces at play, but rest assured, we will tackle those too!
Key benefits
- xVVS is a yield-bearing token — At a regular cadence, we will use a portion of our platform revenue to buy back VVS from the open market and redistribute this to xVVS holders as yield. This means, without doing anything, your xVVS will be worth more VVS over time from the constant buyback. When you decide to unstake xVVS, you receive your original VVS back plus your share of accrued buyback revenue sharing. For example, assuming there are only 2 miners in the market:
- Lock xVVS to earn VVS without any impermanent loss — With xVVS, you can leverage our xVVS Vaults to earn VVS by locking your xVVS. We offer various locking periods in our xVVS Super Vaults; rewards will increase exponentially based on the duration you lock for. You can choose your preferred xVVS locking period; then, you can just sit and earn VVS from the Vaults!
- Vote and submit proposals for VVS development (Future Launch) — Holding xVVS, you will have the power to vote and submit proposals to influence decisions and VVS Finance’s future development. Want to have a Crystal Farm of your preferred token pairs? Or have an amazing idea for our community events? Submit a proposal to us! If the majority of the community votes for your proposal, the VVS Core team will review your proposal, and the most promising ones will be upgraded to a ‘Core Proposal’ for a final round of voting!
- The longer you lock your xVVS, the more voting power you have (Future Launch) — We would love to empower our most devoted xVVS believers with extra voting power. If you choose a longer locking period for your xVVS, you will receive an exponentially higher voting power. Thus, you will have a louder voice in the community and a bigger impact on the decision-making process.
- Get more for your governance rights (Future Launch) — Being the top AMM DEX on Cronos, we are striving to be the one-stop shop for native and cross-chain projects to gain deep token liquidity on Cronos. With the future rollout of community governance, other projects would also be compelled to influence VVS governance to acquire liquidity on Cronos. Similar to the concept of ‘Curve Wars’ and third-party protocols offering “bribes” to earn favorable votes, we want to mobilize protocols and their communities to take a stake in VVS and offer additional incentives to attract our xVVS holders. This will create buying pressure and additional utility that will enrich the VVS platform and benefit the community as a whole.
What Now?
The VVS team is actively working on the xVVS and community governance initiatives. The smart contract for xVVS is currently in the auditing process. These initiatives will be launched in Q1-Q2. xVVS will come first, then the community governance feature will follow. We are excited to share more updates. Stay tuned!
We are constantly pushing to improve the ease of access to DeFi and will continually innovate to introduce new and useful features for our community. So if you have any features you would like to see, join our community here and drop us a message!
