[Multi-Chain] January 2026 Prime Reward Adjustment and Q1 2026 XVS Buyback Distribution

Proposals
1

January 2026 Prime Reward Adjustment and Q1 XVS Buyback

We are sharing an update with the Venus community covering two related initiatives that are proposed to be executed together, subject to approval via a VIP:

  1. January 2026 Prime reward adjustment on BNB Chain
  2. Q1 2026 XVS Buyback and Vault Rewards Distribution

This post outlines the proposed scope, rationale, and high-level execution plan for both items.

1. January 2026 Prime Reward Adjustment

This proposal outlines the allocation of Prime rewards on BNB Chain for January 2026, based on available funds and prior revenue. Prime rewards are distributed retroactively, using protocol revenue generated in the previous month.

1.1 Background

In December 2025, Venus generated approximately $268.8K in reserves revenue. As per the Prime framework, 20% of this revenue (approximately $53.8K) is allocated to Prime rewards and distributed in the following month.

However, due to a delayed adjustment in December 2025, Prime rewards were distributed at a higher daily rate for longer than intended, resulting in an overpayment.

1.2 Adjustment to the Prime Reward Amount for Jan 2026

  • Prime rewards are always based on the previous month’s revenue.

  • The November Prime reward amount of $74K (to be distributed in December) is less than the October Prime reward amount of $110K (used for November distribution). This creates a difference of $36K between the two months.

    • November distribution daily rate:
      • 110K / 30 = $3666.67
      • Adjusted on November 13, 2025
    • December distribution daily rate:

      • 74K/ 31 = $2387.10

      • This rate should have been adjusted on December 13, 2025, but was only adjusted on December 24, 2025.

      • Due to this delay, the higher November daily rate was paid for 11 extra days in December, resulting in an overpayment of:

        (3666.67 - 2387.10) * 11 = $14075.27

  • To account for the overpayment, the Jan 2026 prime reward allocation should be adjusted as follows:

    • 53,800 - 14,075.27 = $39,724.73.

    So, the adjusted Prime reward amount for January 2026 is ~$39.72K.

1.3 Correction USDT/USDC Prime Income distribution

  • In the November Prime adjustment, we proposed a 50%-50% distribution allocation between USDT and USDC. However, the income distribution rate was adjusted to 75% USDT and 25% USDC.
  • Although this was corrected back to the intended 50%-50% split in the December proposal, the previous imbalance caused a USDC shortage over the past few days.

Proposed allocation strategy:

  • Allocate $38K in Prime rewards, maintaining a small buffer to safeguard against price fluctuations and prevent full depletion.
  • Continue rewarding stablecoin markets (USDT and USDC) only, adjusting speeds to allocate $19k attributed this month to each market.
  • Convert 15K of USDT to USDC in Prime Budget
  • 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 $52.36k.

2. Q1 2026 XVS Buyback and Vault Rewards Distribution

This proposal outlines the protocol’s Quarterly Buyback and Funds Allocation strategy for Q1 2026, in accordance with Tokenomics V4.1, based on fees generated during Q4 2025.

The XVS buybacks were executed progressively throughout Q4 2025. This proposal focuses on redistributing the accumulated buybacks to XVS stakers by transferring XVS from Vault Treasuries to XVS Stores and updating Vault reward speeds across eligible chains.

Distributions will only be performed on chains that have generated at least $5K in revenue during the quarter. If a chain does not meet this threshold, its allocation will be deferred and accumulated until the minimum requirement is reached.

2.1 Q4 2025 Fees and Buyback Allocation Overview

BNB Chain

  • Total protocol fees: $4.21M
  • XVS allocated to buybacks: $841.2K (converted into 183,018 XVS)

Ethereum

  • Total protocol fees: $41.6K
  • XVS allocated to buybacks: $8.3K (converted into 1,191 XVS)

ZKsync Era

  • Total protocol fees: $11.0K
  • XVS allocated to buybacks: $2.2K (converted into 473 XVS)

Only chains meeting the minimum revenue threshold are included in this distribution cycle.

2.2 XVS Sources for Q1 2026 Vault Rewards

The XVS available for Vault rewards in Q1 2026 will come from:

  1. XVS buybacks accumulated during Q4 2025 and held in XVS Vault Treasuries
  2. Any remaining XVS balances in XVS Stores, assuming a mid-January execution
  3. A fixed base reward allocation of 308.7 XVS/day on BNB Chain only

Any buyback amounts that have not yet been converted into XVS will not be included in this quarter’s rewards distribution.

2.3 Proposed Actions by Chain

If approved, this proposal is expected to perform the following actions:

BNB Chain:

  • XVS Buyback Allocation: Transfer 183,018 XVS from the XVS Vault Treasury to the XVS Store.
  • XVS Vault Speed: Set the new XVS Vault reward speed to 2,319 XVS/day (includes Q4 buybacks + 308.7 XVS/day Base Rewards)

Ethereum:

  • XVS Buyback Allocation: Transfer 1,191 XVS from the XVS Vault Treasury to the XVS Store.
  • XVS Vault Speed: Set the new XVS Vault reward speed to 5.8 XVS/day ( includes Q4 buybacks - 662 XVS to cover deficit in Q4)

ZKsync Era:

  • XVS Buyback Allocation: Bridge 473 XVS from the Core Pool Comptroller to the XVS Store. The XVS Converter and the XVS Vault Treasury have not yet been deployed on this chain so the buybacks don’t take place automatically.
  • XVS Vault Speed: Set the new XVS Vault reward speed to 5.68 XVS/day (includes Q4 buybacks + 44 XVS leftover in the XVS Store)

3. Summary

January 2026 Prime Reward Adjustment

  • Prime rewards for January 2026 are proposed to be adjusted to account for an overpayment caused by a delayed reward rate update in December 2025
  • The adjusted Prime reward amount for January 2026 is $38K (maintaining a small buffer to safeguard against price fluctuations and prevent full depletion)
  • Prime rewards will continue to focus exclusively on USDT and USDC supply markets on BNB Chain, with a 50 - 50 split between the two assets

Q1 2026 XVS Buyback and Vault Rewards Distribution

  • XVS Vault rewards for Q1 2026 are proposed to be funded primarily through XVS buybacks accumulated during Q4 2025, in line with Tokenomics V4.1
  • Distributions will only be executed on chains that meet the $5K minimum revenue threshold, which for this cycle includes BNB Chain, Ethereum, and ZKsync Era
  • XVS will be transferred to XVS Stores and Vault reward speeds updated per chain to reflect buyback amounts, with a legacy base reward applied on BNB Chain only

We welcome community feedback on both proposals ahead of submitting them for formal consideration through a VIP vote.

2 Likes