Isolated Lending market for BNBx on Venus

Proposal Summary:

Stader proposes addition of BNBx as collateral to Venus isolated markets.

Here’s why BNBx will be a strong addition to the Venus isolated markets and benefits Venus community:

About Staderlabs:
BNBx is built by Staderlabs, a multi-chain liquid staking platform with ~$125M in assets, 25k+ users staking across BNB, Hedera, Polygon, Fantom, Near etc.

About BNBx:
a. BNBx is a BEP20 token that represents the user’s staked assets and accrued rewards. BNBx increases in value relative to BNB as staking rewards accrue. Currently, about 32,500 BNB is staked on BNBx contract (~$10M) by ~2000 stakers.
b. BNBx has been audited by top security audit firms Halborn and PeckShield. Along with audits, we have on-chain monitoring live with Forta, had a security review from the BNB Chain team and we have $1mn bug bounty program live with Immunefi

Liquidity for BNBx:
a. BNBx has over ~$12M of liquidity for BNB<> BNBx pool across multiple DEXs

Price Oracle: The Chainlink price feed for BNBx is live. Below are the relevant addresses:

  • Aggregator: 0xf230822f96bc8819e037db85695fc093d2C68Ccd
  • Proxy: 0xc4429B539397a3166eF3ef132c29e34715a3ABb4

Refer here for more details: Price Feed Contract Addresses | Chainlink Documentation

Benefits to Venus and BNB Chain:

  • BNBx unlocks liquidity on staked BNB. With BNBx, BNB holders can participate in both staking and Defi
  • With Venus Isolated Lending supporting BNBx as collateral, users can unlock several borrowing use cases for BNBx including leveraged staking, posting BNBx as collateral and borrowing stable coins.
  • In general, with BNBx being an active collateral on Venus isolated markets, we can imagine a leveraged version of many currently used DeFi trading strategies in addition to new strategies increasing the choices for BNB liquid staking users.

Background of Stader Labs

Intro to Stader Labs: Stader Labs offers one of the most convenient & safest ways to maximize your returns on staking. It offers liquid staking solutions across 6 chains - BNB, Polygon, Hedera, NEAR, Fantom, etc.

Stader’s vision is to make staking mainstream and bring this wealth creation opportunity to 1 billion users globally.

Stader is also supported by blue-chip investors like Pantera Capital, Coinbase Ventures, True Ventures, Jump Capital, Ledgerprime, Accomplice, Accel, Amber, 4RC, and Figment.

Intro to BNBx: Stader has built out a robust liquid staking solution on BNB. While simple staking provides users with passive income, it locks in their tokens limiting its utility. Liquid staking helps overcome this limitation.

With Stader’s liquid staking product, when users stake with Stader, they get liquid tokens (BNBx) corresponding to the staked amount of BNB. These tokens can be used to further amplify yields by participating in the Defi ecosystem while the locked tokens keep earning staking rewards.

The rewards generated from staking are added back to the pool, and the value of BNBx (in terms of BNB) increases. BNBX is a reward-bearing liquid token i.e. the value of 1 BNBx token vs. BNB increases over time as staking rewards accumulate.

Use cases for lending with BNBx

The introduction of Isolated Markets to Venus will help supercharge the growth of this ecosystem by opening up a new class of DeFi trading strategies, increasing adoption of liquid staking and thereby securing the network in a capital efficient manner.

With Venus Isolated Lending supporting BNBx as collateral, users can unlock several borrowing use cases for BNBx. Let us take the example of a leveraged staking strategy to start with.

Leveraged staking is a very popular strategy deployed across all major PoS networks where both lending and liquid staking ecosystems are sufficiently large. To execute this strategy, a BNB holder can liquid stake with Stader to get BNBx and then deposit the BNBx on Venus to borrow BNB. The borrowed BNB can be staked again to get more BNBx and the process can be repeated till it is viable to do so. This is a relatively low risk leverage strategy because your collateral (BNBx) is linked directly to the price of your borrowed asset (BNB) which considerably reduces the risk of liquidation. Using this strategy traders can make 2-4x of the staking yield on their initial investment.

Other use cases include a long term BNB staker posting BNBx as collateral and borrowing stable coins to participate in an ICO or execute an arbitrage opportunity (or any short term trade). With Venus Isolated Markets they will be able to do these things, without having to wait for the unstake period or incurring the slippage or fee that comes through using a DEX to swap out and back in.

In general, we can imagine a leveraged version of many currently used DeFi trading strategies in addition to new strategies (like the ones mentioned above) increasing the choices for BNB liquid staking users.

Support that Stader will bring to Venus Isolated Markets

  • Stader will seed $25,000 in BNBx for initial pool liquidity to get the isolated BNBx markets kick-started
  • Stader will also provide a minimum $17K in user incentive rewards across first 3 months of launch for participants in the BNBx or BNB pools of isolated markets
  • BNBx is integrated with 10+ DeFi integrations including several DEXs, yield optimizers, leveraged farming protocols offering BNBx holders a wide variety of defi strategies to deploy BNB on
  • Stader has partnered up and continues to partner with Investors that have expressed interest in participating in leveraged staking strategies on top of BNBx

Excellent, I would love to be able to use my BNBx on Venus to get loans, it would be a DeFi alternative that would empower the BNB ecosystem with the integration of these two great protocols.