[BNB Chain] Prime Rewards Allocation — September 2026

Proposals
1

This proposal sets the allocation of Prime Rewards on BNB Chain for September 2026. The allocation is retroactive, distributing revenue the protocol generated during August 2026. USDT remains the primary reward market on the supply side, and U is added as the second reward market on the borrow side.

Background

Prime is funded from a fixed share of protocol revenue. Under Tokenomics Phase II, in effect since 2026-07-01, Prime receives 40% of reserves revenue and 20% of liquidation revenue generated on BNB Chain.

In August 2026, Venus generated $139.1K in reserves revenue and $155.4K in liquidation revenue on BNB Chain. Under the Phase II split, $86.7K is allocated to Prime and distributed as rewards during September 2026.

Details

This proposal distributes $80,000, retaining the balance as a buffer against price movement and to avoid fully depleting the reward pool. The buffer is held slightly wider than in August because roughly a third of this month’s budget came from an unusually heavy month of liquidations, which is not a recurring revenue source.

Rewards are split 80/20 between the USDT and U markets:

Market Rewarded side Share Amount Change from August
USDT Supply 80% $64,000 up from $49,000
U Borrow 20% $16,000 new this month

Rewards are directed at whichever side of a market is the binding constraint on its growth. On USDT that remains the supply side, where deeper liquidity supports lower and more stable borrow rates. On U it is the borrow side: supply has grown steadily without incentives, and borrow demand is what turns that supply into revenue for the protocol. Only one side of any given market is rewarded, since incentivising both sides at once creates arbitrage opportunities that inflate activity without adding real depth.

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.

Analysis

All figures below cover August 2026 and can be found on the Venus Prime dashboard.

USDT market

  • Overall USDT supply recovered from $178.6M to $191.1M (+7.0%), and borrowing rose from $113.3M to $133.7M (+18.0%), lifting utilisation from 63.4% to 70.0%.
  • Prime user supply grew from $36.1M to $45.8M (+26.9%), well ahead of the market, and the Prime supplier count rose from 270 to 281. This is the second consecutive month in which Prime supply outperformed the market as a whole.
  • USDT reserve revenue rose from $39.9K to $40.9K, keeping USDT the single largest revenue contributor on BNB Chain and justifying the majority share of Prime rewards.

U market

  • U supply grew from 26.4M to 26.8M U (+1.7%) without any incentive in place, while borrowing rose from $11.5M to $14.0M (+21.7%), lifting utilisation from 43.7% to 52.3%.
  • U reserve revenue rose from $3.0K to $4.1K (+37.0%), making U the second-largest stablecoin revenue contributor after USDT.
  • Because supply is not the constraint in this market, the reward is placed on the borrow side. U was previously rewarded on the supply side for a single month in May 2026 and set aside from June onward; this allocation revisits the market with the incentive on the side that determines its revenue.

Prime Rewards and the Liquidity Hub

Since the launch of the Liquidity Hub, Venus has been considering routing Prime Rewards entirely through the Hub rather than through individual Core Pool markets, potentially in the coming few months. Under such a model, Prime members would need to move their deposits into the corresponding Liquidity Hub in order to continue earning Prime Rewards, rather than supplying the underlying market directly.

No decision has been taken on this, and nothing in this proposal implements it. It is set out here so that Prime members have early visibility of the direction under consideration, and the community’s views — particularly from those who would need to move existing positions — will shape whether and how it proceeds.

Summary

If approved, this VIP will:

  • Distribute $80,000 in Prime rewards on BNB Chain during September 2026, from an available budget of $86.7K
  • Allocate $64,000 to USDT suppliers and $16,000 to U borrowers, an 80/20 split
  • Enable the U market for Prime rewards on the borrow side
  • End Prime rewards on the wBNB market by setting its distribution speed to zero
  • Leave every market’s interest rate model, collateral factor and caps unchanged

We welcome community feedback on this proposal ahead of submitting it for a VIP vote.

2 Likes
2

First of all, it’s great to see Prime revenue growing and the new tokenomics model working well so far. The increase in rewards this month is definitely a positive sign. It’s a bit unfortunate to see XVS lose some APY, especially while the token price remains significantly below its previous levels, but overall the results for Prime look encouraging.

Regarding the idea of routing Prime Rewards entirely through the Liquidity Hub, I’m trying to understand what the incentive would be for Prime users to move their liquidity there.

If I understand the model correctly, in some cases supplying assets through the Liquidity Hub may result in a slightly lower yield than what users could earn by allocating their funds directly to the most profitable Venus market or product themselves. If that is the case, Prime users would effectively be asked to accept a lower base yield in order to remain eligible for Prime Rewards.

I understand that one of the main benefits of the Liquidity Hub is automation: based on certain parameters, it can automatically allocate and rebalance liquidity between different opportunities instead of requiring the user to manage those allocations manually. But I’m not sure whether convenience alone is a strong enough incentive to justify potentially lower returns.

DeFi is already relatively complex for an average retail user. People who actively use protocols like Venus generally have at least some understanding of how different markets work and how to move liquidity between them. For such users, manually reallocating funds toward a better-yielding opportunity is not necessarily a significant burden.

Taking myself as an example, I could build a simple external solution that periodically monitors yields across different Venus products and markets like Venus Core, Venus Flux, and potentially other products in the future, and reallocates liquidity toward the opportunity offering the highest return. There isn’t much reason to build something like this today because Flux yields are currently relatively low, but that could change, and new Venus products may appear in the future. The underlying principle would remain the same.

This is why I’m trying to understand the value proposition from the Prime user’s perspective. Why should a user choose an automated product that may knowingly produce a lower APY when they can retain control over their liquidity and target the highest available yield themselves?

I completely understand the motivation from the protocol’s perspective: the Liquidity Hub is a new product, it needs liquidity, and Prime could be a powerful mechanism to help bootstrap and grow it. But what is the corresponding incentive for Prime users?

Would there be any additional incentive or benefit for Prime users that compensates for the potentially lower base yield?

Otherwise, I wonder whether making the Liquidity Hub effectively mandatory for receiving Prime Rewards is the right approach. Ideally, the Hub should attract liquidity because its combination of yield, automation, risk management, capital efficiency, or other benefits makes it competitive on its own rather than because Prime users would lose access to rewards if they choose to manage their liquidity themselves.

3

Prime, the Liquidity Hub, and value accrual to XVS

Thank you for opening this discussion before making a decision.

The Liquidity Hub may offer a useful way to simplify access to Venus products and manage liquidity. However, making it the exclusive route to Prime rewards is a separate economic decision, and I believe that decision needs a clearer justification from the perspective of the Venus DAO and XVS holders.

My main concern is not simply whether the Hub can attract deposits or offer competitive yields. It is whether directing Prime-incentivised capital through the Hub maintains or improves the value captured by the protocol that funds those incentives.

1. We need a complete picture of the revenue flows

To be clear, this is not an assertion that Flux or FRV generate no revenue for Venus. Their revenue-sharing and protocol-fee arrangements should be recognised and included in the analysis.

However, the existence of an agreement or a fee mechanism is not the same as demonstrating how much revenue the DAO actually receives, how it is distributed, and how that contribution compares with the incentives supporting the product.

Before considering Prime exclusivity, I would ask Venus Labs to publish a product-level breakdown for Core, Flux, and FRV, covering:

  • Revenue generation: What constitutes protocol revenue in each product, clearly distinguished from the yield paid to depositors?
  • Venus’s economic share: What remains attributable to Venus after partner shares, fees, and other deductions?
  • Collection and distribution: Which addresses receive the funds, who controls them, how frequently are payments made, and what amounts have actually reached the DAO? How are those receipts subsequently allocated to Treasury, Prime, the Risk Fund, or other destinations?
  • Incentive support: What DAO-funded incentives does each product receive, directly or through Prime, and how does that compare with its contribution?

This should include reconciled historical figures where available, not just projected revenue or headline TVL. Any differences in the treatment of Core reserve income, partner revenue-sharing, and institutional-vault fees should be explicit.

Potential future Hub fees should also be shown separately from realised income. Likewise, revenue reaching the DAO Treasury and revenue distributed directly to XVS participants are different outcomes and should not be presented interchangeably.

2. More Hub TVL does not automatically mean more value for Venus

The potential concern is cross-subsidisation: revenues generated by one part of the protocol could fund Prime rewards that attract capital to another part, without a sufficiently demonstrated economic return.

This does not require Flux or FRV to contribute zero. A product can generate revenue for Venus and still receive support that is disproportionate to its contribution.

Nor does it necessarily mean transferring existing Treasury assets to a partner. Prime rewards may still be paid to eligible XVS stakers, while indirectly subsidising the products receiving their incentivised capital. The issue is the allocation of protocol resources and the return obtained from that allocation.

The assessment should therefore compare the proposed model against a realistic baseline in which Prime remains available through direct markets.

For example, how much Hub growth would represent genuinely new external capital rather than migration from Core? How would that migration affect Core borrowing, utilisation, and revenue? What additional revenue would Venus retain from the other destinations after partner shares and costs?

These effects should be modelled rather than assumed. Capital leaving Core does not necessarily reduce its revenue proportionally, just as capital entering the Hub does not necessarily increase total ecosystem revenue.

The same discipline should apply to incentives: an existing Prime budget is not automatically additional spending caused by the migration, but an unchanged budget can still be allocated more or less effectively.

The relevant test is the incremental, risk-adjusted economic benefit to the DAO and XVS, not the size of the Hub in isolation.

3. Any deliberate subsidy should be explicit and accountable

There may be a legitimate case for temporarily supporting a new product before it becomes self-sustaining. I am not suggesting that every product must fund itself from day one, or that Prime rewards must be allocated in exact proportion to each product’s revenue.

But if cross-subsidisation is part of the strategy, it should be presented as an explicit DAO investment, with a defined budget, duration, measurable objectives, reporting, and conditions for reducing or ending support.

Similarly, if the proposed integration requires changes to revenue distribution or tokenomics, those changes should be disclosed and approved alongside it, not left as an unspecified future step.

Before asking Prime users to migrate, the DAO should be able to trace both sides of the equation: what it is financing and what it receives in return.

I would therefore support publishing this revenue-flow and incremental-impact analysis before seeking approval for Prime exclusivity through the Liquidity Hub.

The question is not whether Venus should innovate. It is whether the proposed incentive structure creates demonstrable value for the DAO and XVS holders, and whether any subsidy involved is transparent, bounded, and accountable.

4

As a long time XVS Holder and Top Prime User.

I highly support the proposal and the direction taken.

I believe that moving Prime Reward to Liquidity Hub with Reward Campaign would bootstrap this new feature and would at same time make sure that Venus Prime User would benefit the most from all Product.

I believe that Liquidity Hub would be the futur Pillar for Venus Protocols infrastructure. And might be the best Product deliver since 5 Years.

I like the direction taken and the speed delivering.
Protocol used to be very archaic and the new direction taken is a clear move for more competitiveness and efficiency for each dollars user deposit.

We need to keep going with more innovative development to catch up those years passed of sleeping.

Fully support on this one.