Proposal: Emissions Adjustments for BNB Chain
Summary
The Vanguard and Venus Labs teams are proposing to adjust XVS emissions on BNB Chain. This proposal outlines the plan to adjust XVS emissions on the BNB Chain following an in-depth analysis of market TVL proportions and the current emission weights relative to the total market APYs. The proposed emission adjustments are detailed in the table below.
| Symbol | Current Monthly Allocation | New Allocation |
|---|---|---|
| BNB | 2,812 | 0 |
| BTCB | 2,812 | 0 |
| ETH | 1,406 | 0 |
| USDC | 1,172 | 0 |
| USDT | 1,172 | 0 |
| FDUSD | 300 | 0 |
| WBETH | 257 | 0 |
| DAI | 140 | 0 |
| ADA | 140 | 0 |
| UNI | 140 | 0 |
| DOT | 137 | 0 |
| MATIC | 94 | 0 |
| CAKE | 94 | 0 |
| TRX | 94 | 0 |
| LTC | 86 | 0 |
| XRP | 86 | 0 |
| LINK | 86 | 0 |
| BCH | 47 | 0 |
| FIL | 47 | 0 |
| DOGE | 47 | 0 |
| AAVE | 47 | 0 |
| XVS | 0 | 1,200 |
| Total | 11,215 | 1,200 |
Details
Considerations
All prices and market TVLs are based on data as of September 2, 2024.
TVL Analysis
The TVL for each market was analyzed to identify the most significant ones, leading to the classification into two tiers:
- Tier 1: Markets with more than 5% in TVL
- Tier 2: Markets with less than 5% in TVL
The results of this analysis are presented in the following table:
| Market Symbol | Supply TVL (USD) | Borrow TVL (USD) | TVL proportion |
|---|---|---|---|
| BNB | $802,980,000 | $173,600,000 | 35.34% |
| BTCB | $612,130,000 | $34,880,000 | 23.41% |
| USDT | $338,790,000 | $253,690,000 | 21.44% |
| USDC | $113,700,000 | $89,640,000 | 7.36% |
| ETH | $127,100,000 | $56,140,000 | 6.63% |
| WBETH | $35,230,000 | $1,310,000 | 1.32% |
| CAKE | $33,720,000 | $816,780 | 1.25% |
| FDUSD | $12,910,000 | $10,470,000 | 0.85% |
| DOGE | $7,850,000 | $144,870 | 0.29% |
| LTC | $6,550,000 | $409,660 | 0.25% |
| XRP | $6,290,000 | $546,310 | 0.25% |
| LINK | $6,000,000 | $130,090 | 0.22% |
| XVS | $5,650,000 | $9,300 | 0.20% |
| ADA | $5,440,000 | $255,030 | 0.21% |
| MATIC | $3,990,000 | $165,450 | 0.15% |
| DOT | $3,850,000 | $954,260 | 0.17% |
| UNI | $3,480,000 | $279,650 | 0.14% |
| DAI | $3,160,000 | $2,520,000 | 0.21% |
| AAVE | $1,640,000 | $209,370 | 0.07% |
| BCH | $1,590,000 | $144,050 | 0.06% |
| FIL | $1,520,000 | $150,660 | 0.06% |
| BUSD | $1,000,000 | $155,760 | 0.04% |
| TRX | $879,310 | $505,740 | 0.05% |
| BETH | $371,310 | $16,260 | 0.01% |
| TUSD | $147,260 | $102,780 | 0.01% |
| SXP | $60,540 | $4,660 | 0.00% |
| TRXOLD | $46,520 | $226,120 | 0.01% |
| TUSDOLD | $44,830 | $59,670 | 0.00% |
The Tier 1 markets identified are BNB, BTCB, USDT, ETH, and USDC, as they have more than 5% in TVL. All other markets fall into Tier 2.
Sensitivity Analysis
A sensitivity analysis was conducted to assess the impact of emission adjustments on market APYs, estimating how reductions in emissions might affect overall market performance. The table below illustrates the relative contribution of emission boosts to the total market APY.
| Symbol | Supply APY Boost | Borrow APY Boost | Total Supply APY | Total Borrow APY | Relative Boost Weight |
|---|---|---|---|---|---|
| BNB | 0.01% | 0.06% | 0.79% | 4.89% | 1% |
| BTCB | 0.01% | 0.31% | 0.04% | 0.19% | 32% |
| ETH | 0.04% | 0.10% | 0.67% | 1.74% | 6% |
| USDC | 0.03% | 0.05% | 5.74% | 8.11% | 1% |
| USDT | 0.01% | 0.01% | 5.18% | 7.75% | 0% |
Based on the analysis, the recommendations are as follows:
- Eliminate emissions for markets contributing less than 5% of total TVL: These markets have minimal impact on liquidity or returns, making further emissions unnecessary.
- BTCB Market: With a low APY of 0.04% and 6% utilization, this suggests BTCB is mainly used as collateral. Removing emissions would only reduce supply APY by 0.01%, so the impact would be minimal.
- For other markets, emissions have a negligible effect on APY, as their boost weight is under 10%. It is recommended to remove emissions from these markets as well.
XVS Market Emissions
The Venus Community has been advocating for several months for the XVS Market on the Core pool to be lightly Incentivized. In doing so, the XVS Market on the core pool can offer additional advantages for both the Venus protocol and its community as well as increased XVS utility and demand while slightly offsetting the borrow interests paid by XVS suppliers borrowing funds against these. It’s also a way to thank the XVS holders for their continuous support.
Final Recommendations
The recommended emission adjustments are outlined in the table below:
| Symbol | Current Monthly Allocation | New Allocation |
|---|---|---|
| BNB | 2,812 | 0 |
| BTCB | 2,812 | 0 |
| ETH | 1,406 | 0 |
| USDC | 1,172 | 0 |
| USDT | 1,172 | 0 |
| FDUSD | 300 | 0 |
| WBETH | 257 | 0 |
| DAI | 140 | 0 |
| ADA | 140 | 0 |
| UNI | 140 | 0 |
| DOT | 137 | 0 |
| MATIC | 94 | 0 |
| CAKE | 94 | 0 |
| TRX | 94 | 0 |
| LTC | 86 | 0 |
| XRP | 86 | 0 |
| LINK | 86 | 0 |
| BCH | 47 | 0 |
| FIL | 47 | 0 |
| DOGE | 47 | 0 |
| AAVE | 47 | 0 |
| XVS | 0 | 1,200 |
| Total | 11,215 | 1,200 |
. Xvs core pool becomes more atractive with this proposal
hopefully it will be voted soon 
i am always for emission reductions