Summary
This document evaluates Venus Prime’s performance following 9 months of deployment. It proposes adjustments to its distribution, focusing on aligning more closely with each market’s contribution to protocol reserves. The changes are designed to more accurately reflect market dynamics and user participation.
User participation increase after obtaining a Prime token:
- Supply: +209.70%
- Borrow: +419.17%
Relative contribution to protocol reserves:
- BTC: 1.37%
- ETH: 10.63%
- USDC: 26.19%
- USDT: 61.81%
New reward distribution proposal:
- BTC: 5% (0%)
- ETH: 15% (0%)
- USDC: 35% (-5%)
- USDT: 45% (+5%)
3-month reward distribution recommendations:
- BTC: 0.81 (+0.09)
- ETH: 45.92 (-25.43)
- USDC: 315,000 (+15,000)
- USDT: 405,000 (+5,000)
- Total rewards for 3 months: $900,000
Additional Changes:
- Addition of 50 new Prime tokens to be released, claimable on a first-come, first-served basis for users that qualify.
Details
Considerations
The following analysis considers token prices and volumes at key block numbers: 32599510 (pre-Prime) and 40187654 (9 months, post-Prime). The token prices are considered for July 5 2024.
Deployment Performance
Graph 1: XVS Vault Staked Amount
Data from: Venus Protocol Dashboard
The net vault amount has consistently increased over the past 9 months, with an average monthly increase of approximately 1.08%. This steady growth indicates a positive response to the Venus Prime program.
Graph 2: Cumulative Users Minting and Borrowing Volume
Data from: Venus Protocol Dashboard
The introduction of Prime rewards has led to substantial growth in platform activity. Over the observed period, cumulative supply increased by approximately $2.38 billion, and cumulative borrow grew by approximately $1.05 billion. This reflects a strong positive response to the Prime incentives.
Table 1: User Token & USD Balance Before Prime (Block number: 32599510)
| Token | Supply Token Amount | Borrow Token Amount | USD Supply Amount | USD Borrow Amount |
|---|---|---|---|---|
| BTC | 1,157.91 | 6.93 | $31,162,420 | $186,534 |
| ETH | 12,273.88 | 1,873.83 | $19,051,303 | $2,908,522 |
| USDC | 4,373,735.74 | 13,486,056.70 | $4,374,358 | $13,487,975 |
| USDT | 5,204,387.83 | 10,855,603.49 | $5,204,070 | $10,854,942 |
| Grand Total | 9,591,555.35 | 24,343,540.95 | $59,792,152 | $27,437,973 |
Table 2: User Balance After Prime (Block number: 40187654)
| Token | Supply Token Amount | Borrow Token Amount | USD Supply Amount | USD Borrow Amount |
|---|---|---|---|---|
| BTC | 3,662.84 | 31.47 | $213,382,975 | $1,833,372 |
| ETH | 21,057.07 | 11,986.02 | $65,961,263 | $37,546,194 |
| USDC | 17,982,645.54 | 30,196,632.81 | $17,981,385 | $30,194,517 |
| USDT | 60,341,630.95 | 89,386,605.94 | $60,303,611 | $89,330,285 |
| Grand Total | 78,348,996.39 | 119,595,256.24 | $357,629,234 | $158,904,368 |
Table 3: User Token Balance Change After Prime
| Token | Increase in Supply Amount | Increase in Borrow Amount |
|---|---|---|
| BTC | 216% | 354% |
| ETH | 72% | 540% |
| USDC | 311% | 124% |
| USDT | 1,059% | 723% |
| Weighted Average | 210% | 419% |
The Prime program has resulted in a weighted average supply and borrow increase of 210% and 419%, respectively. Prime users have increased their supply positions from $59,792,152 to $357,629,234 and their borrow positions from $27,437,973 to $158,904,368.
Additional Changes
To further incentivize user participation, we will release 50 new Prime tokens, which will be claimable on a first-come, first-served basis for users who qualify. This initiative aims to increase user engagement and market participation. We will evaluate the performance of this new addition for future changes.
Table 4: BSC Prime Token Information:
| Description | Quantity |
|---|---|
| Minted | 500 |
| Eligible, not minted | 91 |
| Waiting to mint | 121 |
Adjustment Recommendations
Table 5: Current quarterly reward distribution and relative revenue performance
| Token | Current Rewards | Current Proportion | Revenue Proportion |
|---|---|---|---|
| BTC | 0.79 | 5% | 1% |
| ETH | 72.39 | 25% | 11% |
| USDC | 225,000 | 30% | 26% |
| USDT | 300,000 | 40% | 62% |
Table 6: Proposed quarterly rewards
| Token | New Rewards |
|---|---|
| BTC | 0.81 |
| ETH | 45.92 |
| USDC | 315,000 |
| USDT | 405,000 |
| Total rewards in USD: | $900,000 |
Table 7: Proposed monthly reward distribution change
| Token | New Proportion Proposal |
|---|---|
| BTC | 5% |
| ETH | 15% |
| USDC | 35% |
| USDT | 45% |
This change aims to adjust rewards for eligible users based on the current total budget for Prime, estimated at $1,262,249. With the new Tokenomics V4, which increased the Prime allocation from 10% to 20%, the average protocol monthly reserves from January 2023 to June 2024 are $234,993. This budget is expected to be sustainable for over 12 months. However, future adjustments will be made to further refine and optimize Prime rewards for eligible users.
The proposal is to implement this configuration for the next three months. After this period, a new performance evaluation will be conducted to continue improving the program’s effectiveness.
Thanks to the release of the Income Allocator and Token Converters, the reward amounts are in the Converters, Prime Liquidity Provider and Prime Contract, so no transfers are needed.
Conclusion
The Venus Prime program has shown impressive performance, significantly increasing user engagement and market participation. The proposed adjustments are evaluated based on the program’s performance and are optimized for user rewards and protocol growth.