Venus Protocol (“Venus”) is an algorithmic-based money market system designed to bring a complete decentralized finance-based lending and credit system onto BNB Chain.
Venus enables users to utilize their cryptocurrencies by supplying collateral to the network that may be borrowed by pledging over-collateralized cryptocurrencies. This creates a secure lending environment where the lender receives a compounded interest rate annually (APY) paid per block, while the borrower pays interest on the cryptocurrency borrowed. These interest rates are set by the protocol in a curve yield, where the rates are automated based on the demand of the specific market, such as Bitcoin.
The difference of Venus from other money market protocols is the ability to use the collateral supplied to the market not only to borrow other assets but also to mint synthetic stablecoins with over-collateralized positions that protect the protocol. These synthetic stablecoins are not backed by a basket of fiat currencies but by a basket of cryptocurrencies.
Venus utilizes the Binance Smart chain for fast, low-cost transactions while accessing a deep network of wrapped tokens and liquidity The Venus Protocol is governed by the Venus Token (XVS), which is designed to be a “fair launch” cryptocurrency.
There are no founder, team, or developer allocations, and the XVS can only be earned through the Binance LaunchPool project or through providing liquidity to the protocol. Venus has been designed to enable community control in its core. Since there are no pre-mines for the team, developers and founders, this means the protocol will be controlled by those who decide to mine Venus Tokens. To create a proposal, a proposer will need 300,000 XVS and the proposal must reach at minimum 600,000 XVS quorum to be approved.