Overview
Following the successful deployment of the Venus Prime program and the integration of multiple Prime markets, I now propose adding FDUSD as a new Prime Market to the Venus Core Pool on BNB Chain.
FDUSD has rapidly attracted significant attention, emerging as a widely used stablecoin across BNB Chain and Ethereum with a circulating supply of $2.05 billion. Its strong market recognition and the heightened demand driven by initiatives like Binance Launchpools make FDUSD an ideal candidate for integration.
By incorporating FDUSD into the Venus Prime framework, we can capitalize on its market momentum to further boost protocol growth, liquidity, and cross-ecosystem synergy.
Rationale
Market Demand & Ecosystem Synergy: FDUSD’s popularity on BNB Chain, combined with strong demand from Binance Launchpools participants, has consistently driven interest in Venus since its inception. By integrating FDUSD as a Prime market, Venus can realize multiple benefits:
- User Attraction: The addition as a Prime market will draw a broader user base already familiar with FDUSD from various ecosystems, thereby boosting TVL and overall engagement.
- Liquidity Growth: Increased supply and demand for FDUSD will enhance liquidity and revenue on Venus, reinforcing its position as a leading lending and borrowing platform.
Alignment with Venus Prime Principles: The original Venus Prime proposal emphasizes incentivizing protocol retention, reinvestment of value, and enhanced risk management through innovative measures such as issuing Venus Prime SBTs and refining vault mechanics. Integrating FDUSD into the Prime market framework aligns seamlessly with these objectives by:
- Boosted Yields: As a Prime market asset, FDUSD becomes eligible for the yield-boost mechanism, offering enhanced rewards to active lenders and borrowers.
- Enhanced Stability: Being a stablecoin, FDUSD provides a reliable store of value, mitigating volatility risks often associated with other assets.
- Increased Engagement: Staking FDUSD unlocks additional protocol incentives, further promoting user participation and contributing to the overall health and resilience of the ecosystem.
Yield Mechanism:
- FDUSD deposits and borrowings will qualify for Venus Prime yield boosts, calibrated based on daily average TVL metrics.
User Incentives & Community Engagement:
- Exclusive Benefits: Venus Prime users with active FDUSD positions will unlock exclusive benefits, including potential yield enhancements and various community perks.
- Cross-Platform Synergy: This initiative encourages FDUSD holders from Ethereum and Binance Launchpools users to engage with Venus, driving cross-platform synergy and expanding the user base.
Benefits for Venus and FDUSD
For Venus:
- Increased TVL and Liquidity: FDUSD robust growth on BNB Chain and its consistent demand on Binance Launchpools are poised to drive a significant influx of liquidity. The boosted APYs associated with FDUSD will further amplify interest reserves, strengthening Venus overall financial position.
- User Base Expansion: By tapping into the FDUSD market, particularly within Asia where demand is pronounced, Venus can diversify and expand its user demographics. This strategy will foster greater protocol retention and catalyze broader expansion.
- Enhanced Protocol Value: Integrating a widely recognized and stable asset like FDUSD elevates Venus market perception and reinforces its value proposition as a multi-chain, cross-ecosystem platform.
For FDUSD:
- Broader Adoption: Integrating FDUSD as a Prime market on Venus offers an additional avenue for FDUSD holders, complementing its existing presence within the Binance ecosystem.
- Increased Utility: Participation in Venus Prime’s yield boost program provides a unique incentive for FDUSD users, enhancing its functionality beyond that of a traditional stablecoin.
- Market Visibility: A successful integration will elevate FDUSD’s profile within the DeFi community, paving the way for further collaborations and broader market expansion.
Incentives
For the FDUSD Prime Market launch, Vanguard Vantage has secured a 100K FDUSD grant from First Digital. I propose distributing this grant as Prime boost incentives during the first 90 days following the market’s activation as a Prime Market if this proposal is voted favorably by the Venus community. This initiative is designed to rapidly grow FDUSD’s TVL on Venus, generating sufficient interest reserves and ensuring that boosted rewards on this market can be sustained after this initial period.
Conclusion
The integration of FDUSD as a Prime Market on Venus represents a strategic move that leverages strong market demand for trusted stablecoins and leverages demand for FDUSD for Binance Launchpools while also aligning with the core principles of Venus Prime. This initiative not only increases liquidity and TVL but also enriches the ecosystem with a stable and high-demand asset, thereby benefiting both Venus and the FDUSD users community.
I invite the community to discuss, deliberate, and vote on this proposal to further drive innovation and growth within our wonderful ecosystem.
