Prime Adjustment Proposal
Summary
This document evaluates Venus Prime’s performance following two 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: +103% (from $60,671,616 to $155,426,778)
- Borrow: +606% (from $9,511,982 to $39,935,010)
-
Relative contribution to protocol reserves
- BTC: 4%
- ETH: 21%
- USDC: 26%
- USDT: 49%
-
New reward distribution proposal:
- BTC: 5% (-17%)
- ETH: 25% (+1% )
- USDC: 30% (+14%)
- USDT: 40% (+2%)
-
3-month reward distribution recommendations:
- BTC: 0.79 ( -2.48)
- ETH: 72.39 (+9.04)
- USDC: 225,000 (+133,006)
- USDT: 300,000 (+74,000)
- Total rewards for 3 months: $750,000
Details
Considerations
- The following analysis considers token prices and volumes at key block numbers: 32599510 (pre-Prime) and 35135060 (post-Prime).
Deployment Performance
Graph 1: XVS Vault Staked Amount
- After the launch of Venus Prime, the average monthly deposits increased from approximately 56,824 to 325,418 (+472.67%).
- One user withdrew and moved to cold storage 600k XVS during the week of the release.
- The net vault amount showed an improvement post-launch, with a growth of approximately 5.15%, compared to a decline of about 3.20% in the preceding period.
Graph 2: Cumulative Users Minting and Borrowing Volume
- The graph displays a significant increase in both minting and borrowing volumes, especially after November 23, highlighting the impact of the Prime reward release. Minting volumes increased from $47,655,512 to $72,944,361, and borrowing volumes rose from $19,737,323 to $45,619,908 within a week.
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 | 727.08 | 6.47 | $19,567,814 | $174,052 |
| ETH | 10,225.99 | 949.57 | $15,872,595 | $1,473,905 |
| USDC | 2,640,468.84 | 1,416,199.25 | $2,640,844 | $1,416,401 |
| USDT | 22,591,739.76 | 6,448,017.18 | $22,590,362 | $6,447,624 |
| Grand Total | 25,243,161.68 | 7,865,172.47 | $60,671,616 | $9,511,982 |
Table 2: User Balance After Prime (Block number: 35135136)
| Token | Supply Token Amount | Borrow Token Amount | USD Supply Amount | USD Borrow Amount |
|---|---|---|---|---|
| BTC | 1,140.00 | 99.87 | $53,978,852 | $4,728,722 |
| ETH | 9,555.00 | 7,173.88 | $24,827,065 | $18,581,795 |
| USDC | 6,669,784.02 | 4,866,847.10 | $6,671,062 | $4,867,780 |
| USDT | 69,923,535.60 | 11,752,299.14 | $69,949,799 | $11,756,713 |
| Grand Total | 76,604,014.62 | 16,626,420.00 | $155,426,778 | $39,935,010 |
Table 3: User Token Balance Change After Prime
| Token | Increase in Supply Amount | Increase in Borrow Amount |
|---|---|---|
| BTC | 57% | 1444% |
| ETH | -7% | 655% |
| USDC | 153% | 244% |
| USDT | 210% | 82% |
| Average | 103% | 606% |
- These tables show a considerable increase in both supply and borrow token amounts after the introduction of Prime, amplifying yields and creating more use cases for users to increase their positions.
Adjustment Recommendations
Table 9: Current monthly reward distribution and relative revenue performance
| Token | Token Rewards | Current Proportion | Revenue Proportion |
|---|---|---|---|
| BTC | 1.09 | 22% | 4% |
| ETH | 21.12 | 24% | 21% |
| USDC | 30,664.72 | 16% | 26% |
| USDT | 75,333.25 | 38% | 49% |
- Total rewards in USD: $212,301
Table 10: Proposed monthly reward distribution change
| Token | New Proportion Proposal | Token Rewards |
|---|---|---|
| BTC | 5% | 0.26 |
| ETH | 25% | 24.13 |
| USDC | 30% | 75,000.00 |
| USDT | 40% | 100,000.00 |
- Total rewards in USD: $250,000
This new change aims to adjust rewards for eligible users based on the current total budget for Prime, which is estimated to be $1,600,097. The plan takes into account the average monthly protocol reserve allocation for Prime, which is estimated to be $93,985. Considering an estimated increase of 5% in allocation each month due to protocol growth, this amount is expected to be sustainable for more than 14 months. However, future adjustments will be made to further fine-tune and optimize Prime rewards for eligible users
The proposal is to use this configuration for the next 3 months. After this timeframe, a new performance evaluation will be conducted to keep improving the effectiveness of the program.
With this, it is required to send the token amounts for each market to finance the next 3 months of the program.
Table 11: Proposed 3-month budget
| Token | Token Rewards |
|---|---|
| BTC | 0.79 |
| ETH | 72.39 |
| USDC | 225,000.00 |
| USDT | 300,000.00 |
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.
as Stablecoin Prime user i vote FOR!!