Description
This VIP allocates May 2026 Prime rewards on BNB Chain across the USDT and U stablecoin markets, introducing U as a Prime reward market for the first time alongside USDT.
A separate concurrent action — not part of this VIP — is the unpause of the vTHE market withdraw action. Context is provided below for transparency.
Proposed Changes
1. Prime Rewards Allocation — May 2026
This allocation outlines the distribution of Prime Rewards on BNB Chain for May 2026, based on available funds. The allocation is retroactive, redistributing revenue generated through April 2026.
Allocation Strategy
In April 2026, Venus generated $136K in reserves revenue. Of this amount, $27.2K (20%) is allocated to Prime and will be distributed as rewards in May 2026.
Proposed allocation strategy:
- Allocate $24.5K in Prime rewards, while maintaining a 10% buffer for market price fluctuations and to avoid full depletion.
- Rewards will be split 50/50 between the USDT and U stablecoin markets, with speeds adjusted to allocate ~$12.25K to each market’s supply side.
- Following the plan outlined in April, this is the first month introducing U as a Prime reward market alongside USDT. The split will be reviewed in coming months based on U market performance and reserve contribution.
- Focusing rewards on the supply side helps strengthen liquidity and create conditions for lower borrow rates. In contrast, rewarding both sides tends to create arbitrage opportunities, artificially inflating activity and driving up borrow rates for other users.
This allocation is an estimate based on token prices at the time the reserves were collected. Actual allocations may vary due to price changes between collection and conversion into Prime reward tokens. The current Prime budget stands at $43.72K.
Analysis
All the data presented below can be found on the Venus Prime dashboard.
Prime markets — Activity, reserves and rewards
USDT Market:
- Overall USDT supply declined from $232.5M to $221.8M (-4.6%), while borrowing held roughly flat at $124.1M → $123.8M (-0.2%).
- Prime user supply held steady at $56.5M → $56.8M (+0.5%), continuing to outperform the overall market and demonstrating Prime’s ability to retain sticky USDT supply. Prime user borrowing decreased from $33.7M to $29.1M (-13.7%), broadly tracking the market-wide softening in borrowing demand.
- USDT reserve revenue was essentially flat at $38.0K → $37.9K (-0.3%). The market remains the dominant revenue contributor and continues to justify the majority of Prime rewards.
Implementation
- Adjust the USDT Prime reward speed on BNB Chain to distribute ~$12.25K to USDT suppliers over May 2026
- Set the U Prime reward speed on BNB Chain to distribute ~$12.25K to U suppliers over May 2026 (first inclusion)
- Maintain a 10% buffer to absorb price fluctuations between revenue collection and Prime reward conversion
- vTHE Market Withdraw Unpause
For transparency, alongside this VIP the multi-sig will execute an operational action on the vTHE market. This action is not voted on as part of this VIP — it is being handled directly via the protocol multi-sig wallet.
On March 15, 2026, the vTHE market was the target of a donate-style exchange-rate manipulation attack. As an emergency response, all actions on vTHE — including withdraw — were paused via multi-sig to prevent further exposure.
In the period since, the protocol has fully resolved the incident: the smart-contract root cause has been patched (VenusProtocol/venus-protocol#664) and the resulting bad debt has been repaid. With the conditions that justified the withdraw pause no longer in place, the multi-sig signers will execute an unpause of the withdraw action only on the vTHE market — giving users with existing THE supply positions a path to retrieve their deposits. Mint and borrow remain paused, as the vTHE market continues to wind down and will not accept new positions.
Summary
If approved, this VIP will:
- Allocate $24.5K in May 2026 Prime rewards on BNB Chain, split 50/50 between USDT and U suppliers (~$12.25K each)
- Introduce U as a Prime reward market for the first time alongside USDT