Venus (XVS) is a DeFi lending platform that functions as an algorithmic money market, making it a permissionless platform. This system allows users to borrow and lend money quickly, without the need for an intermediary. With this system, borrowers can obtain crypto-based loans at reduced interest rates, while lenders are rewarded for providing loan services.
Venus is developed and hosted on the Binance Smart Chain, hence XVS is a BEP-20 token. The Venus system also allows for the creation of stablecoins known as VAI. VAI is a BEP-20 stablecoin, and its value is linked to that of the US dollar. The Venus system enables users to mint VAI using a wide variety of supported cryptocurrencies as collateral, including Binance Coin (BNB), USDT, USDC, Swipe (XSP), and Venus Coin (VEN) (XVS). Venus only accepts tokens that adhere to the BEP-20 standard.
The project was created by Swipe, a cryptocurrency credit card issuer managed by Joselito Lizarondo in 2020. The team granted authority to the XVS community holders. Since then, many proposals have been made to change, upgrade, and enhance the Venus protocol.
Venus originated as a fork of Compound (COMP), a well-known cryptocurrency lender created on the Ethereum network, and also drew inspiration from MakerDAO. The protocol is mostly a combination of the benefits of the two systems. Furthermore, in December 2020, it was audited by blockchain security company CertiK.
The Venus protocol was developed to meet the demand for DeFi protocols. The platform was designed to facilitate the minting of VAI stablecoins, collateralized loans, and collateralized asset supply that are supported by the protocol. The team created the platform so that Venus token holders have complete authority over the network and Venus token. Joselito Lizarondo, who started Venus Protocol, says, "Venus aids in bridging the gap between traditional financial lending and blockchain-based decentralized protocols. It allows anyone to use a fast, low-cost blockchain to provide collateral, earn interest, borrow against that collateral, and mint stablecoins on demand within seconds."
Venus facilitates the lending and borrowing of cryptocurrencies, as well as the minting of stablecoins.
In terms of lending and borrowing, it functions quite similarly to a permissionless algorithm. Venus enables BNB chain investors to lend their extra tokens to other network users. Investors get compounding interest for lending tokens, which is paid by users who borrow tokens.
The protocol determines the interest rate for this loan depending on its utilization. The rates are variable and determined by the market demand for specific cryptocurrencies.
The second thing that the Venus protocol makes sure of is the minting of stablecoins via vTokens. vTokens are given to suppliers as a representation of the collateral they have deposited. Suppliers can eventually redeem these vTokens for their collateral. Users may borrow up to 50% of their vTokens' worth to mint VAI.
The interest rate on borrowed VAI tokens is determined by the Venus protocol and remains constant.
Venus is a DeFi lending platform that enables users to lend and borrow cryptocurrency against collateral. The main function of the Venus platform is to facilitate automated decentralized lending services in which lenders can earn an annual percentage yield (APY) based on their deposited funds for supported cryptocurrencies.
Venus can also be used to create over-collateralized stablecoins, like VAI, and users can mine XVS to generate liquidity. Venus allows transactions to happen quickly and instantly, which makes it easy to get a loan without a credit check or a central authority like a bank.
DATE NEWS/EVENTS IMPACT 13/05/2022 Venus suspended the protocol for 48 hrs and said that it had a "Risk Fund" that would be used to make up for the shortfall caused by Chainlink's suspension of LUNA price updates +38% Increase 09/05/2022 Luna crypto collapse results in an $11 million Venus Protocol exploit -47% Decrease 14/02/2021 Venus (XVS) surges, as TVL reaches $3.54B following the launch of Binance Smart Chain +142% Increase
Venus is a major initiative in the emerging area of decentralized finance. As the demand for decentralized financial services grows, projects like the Venus lending protocol are gaining popularity. Venus eliminates the need for long processes when getting loans from a central authority and allows users to easily lend and borrow cryptocurrency. Venus has the potential to become one of the most popular lending platforms on the market due to its favorable collateral conditions for various supported cryptocurrencies and the possibility to stake and earn APY based on deposited funds.
Venus