venus protocol review

The world of Decentralized Finance (DeFi) has seen huge growth over the last couple of months. And several projects have emerged to meet the rising needs of financial services and applications. With such demands on the rise, lending protocols have emerged as a popular part of the market.

Venus Protocol is one of the lending protocols that has gained popularity in recent years. However, there is a strong case that this DeFi platform has been undervalued and overlooked in favor of some of its rival. But first, let’s define what is this DeFi protocol about.

What is Venus Protocol?

Venus is a DeFi lending platform that works as an algorithmic money market, making it permissionless. This means that users can instantly borrow and lend money thanks to this system without the need for middlemen. Venus incentivizes lenders for offering loan services and borrowers can borrow crypto-based loans at lower rates.

Venus is hosted and built on the Binance Smart Chain. This means that its token, XVS, is a BEP-20 token. The Venus system also makes it possible to mint stablecoins known as VAI. VAI is a stablecoin that is tied to the US dollar’s value.

Also, users can mint VAI using a wide range of supported cryptocurrencies as collateral, such as XVS, Swipe (XSP), Binance Coin (BNB), USDT, and USDC. All supported tokens on Venus are BEP-20 standard.

The XVS token plays a huge role in Venus. It is used in network governance where holders can propose network reforms and vote on ideas for new collateral additions, protocol changes, upgrades, and other crucial factors.

How Does Venus Work?

Venus has a good interface and is user-friendly. The system can also determine how much of a loan a user is taking depending on the supplied collateral. An automated market with no middlemen, such as Venus allows users to borrow crypto funds by depositing a variety of cryptocurrencies that are compatible with the Venus protocol.

The XVS token and VAI stablecoins are key components of this design. As mentioned earlier, XVX serves as the governance token. Every XVS holder has the opportunity to vote, as well as the ability to suggest new collaterals and protocol changes.

XVX is also used to mint VAI. So, users can mint VAI using the vTokens from previously supplied collateral. It can also be deposited into the Venus Vault to participate in the Venus liquidity mining program and earn interest.

In other words, Venus allows its users to deposit any of the supported cryptocurrencies as collateral to borrow more crypto at different allocation rates. They can also earn an APY for lending to other users. Venus ensures that everyone who holds funds within the system earns an APY. Holders can also use their profits as collateral for loans. Now, the level of public interest in a certain cryptocurrency affects the APY rate

What Makes Venus Unique?

While there are other lending platforms on the market, Venus stands out due to a few distinctive features. Venus provides:

  • Quick loans with cheap transaction costs and over-collateralization.
  • Handle instant loans and transactions: Thanks to support from the Binance Smart Chain.
  • Venus Protocol permits the use of supplied collateral for both borrowing and the minting of stablecoins.
  • Venus allows users to earn yield from minted tokens.

This practice differs from other protocols that lock such tokens in smart contracts. And this offers no benefits from the underlying asset. One of Venus’s big points is that takes off the need for users to withdraw their assets from a money market to mint stablecoins.

Venus Protocol’s synthetic stablecoins, unlike other well-known stablecoins, are backed by a variety of other cryptocurrencies rather than traditional financial assets or currency.


The Venus Protocol integrates the creation of stablecoins and the money market into a single protocol. This can help the cryptocurrency ecosystem by providing collateral. Furthermore, anyone who holds a cryptocurrency wallet can access these financial products leveraging BNB Chain’s speed and low transaction costs. Thanks to Venus, anyone can mint stablecoins on demand, borrow against, supply collateral and earn interest on.

Seeing all of Venus’s use cases and how little attention it gets, one can say it is undervalued.

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