What Is Venus (XVS)?
XVS is the native token of Venus, which is a decentralized money market for lenders and borrowers that runs on the Binance Smart Chain. Besides that, Venus is also a synthetic stablecoin protocol that allows users to create VAI stablecoins. If you're wondering about the current XVS price, check out the Venus price chart that is featured above.
The Venus protocol is a fork of Compound and MakerDAO. Initially, it was managed by Binance. However, now, Venus is managed by the Swipe project, which also belongs to the Binance ecosystem. Swipe is a crypto-fiat gateway that allows people to use crypto assets as fiat money.
As a money market, Venus allows users to borrow directly against collateral with low-cost transaction fees. In order to become a lender, a user has to pool his/her assets into the Venus pool. By doing that, lenders receive vTokens and are able to generate profit based on the variable interest rates. Borrowers can take out over-collateralized loans from this pool by paying the variable interest rates.
Besides, users who want to borrow money from Venus have to first supply collateral to the network. After they do that, they can borrow from the Venus pools against the collateral without going through a credit check.
As a stablecoin protocol, on the other hand, Venus allows users to create VAI, which is a synthetic stablecoin pegged to the US Dollar at a 1:1 ratio. VAI stablecoins are based on the BEP-20 token standard. However, unlike it is with most stablecoins, the Venus protocol doesn’t have underlying fiat money reserves that ensure the peg of VAI tokens. Instead, the peg is fully dependent on the market and its collateral basket. However, there is the Price Adjustment Module that can be used to change the system's parameters, detach the peg, and modify supply and demand dynamics to restore VAI’s stability if any problems occur.
How Does Venus Work?
The Venus crypto project utilizes Chainlink price oracles to deliver precise pricing information. The oracles ensure that the pricing information cannot be tampered with, this way safeguarding the platform from market manipulation attacks.
Besides, the Venus protocol is secured via the Proof-of-Staked Authority (PoSA), which is a consensus mechanism employed by the BSC network. It is a modified version of Proof-of-Stake (PoS), in which a validator's identity serves as the stake instead of a stake with a monetary value.
Use Cases of XVS Tokens
XVS tokens are based on the BEP-20 token standard. They are mainly used as a governance token of the Venus crypto project. Venus token holders are able to participate in the decision-making processes considering the future development of the project. Again, make sure to check out the XVS price on the Venus price chart above, in which you can see how the token's value changes in real time.
Besides that, XVS tokens are used to reward the participants of the platform. The rewards are given out on a daily basis as follows:
- 35% to borrowers
- 35% to lenders
- 30% to minters of VAI stablecoins
Tokenomics of XVS
Initially, 30 million Venus tokens were pre-minted. 20% of these tokens were dedicated to the Binance Launchpool, during which users were able to farm XVS tokens by staking other crypto assets. 1% of the Venus token supply was set aside for the BSC ecosystem grants. The remaining portion is dedicated to the liquidity providers.
Besides, note that the Venus price is subject to change, so keep that in mind if you're thinking about purchasing XVS tokens.
