Thanks for pointing out the issue on data and revenue calculation, we’ve made it a point to work on a dashboard where users can transparently see how Venus revenue is being spent.
On borrow rates, the flattening of the IRM curves will make stablecoin borrowing much more competitive. We know this may not match the current Prime rewards one-to-one, since those are concentrated, but spreading rewards too thinly across many markets wouldn’t give Prime holders meaningful benefits either. That’s why we’ve moved to monthly adjustments instead of quarterly — so we can monitor results closely and respond quickly.
If the changes end up being a net negative for Venus or Prime users, we’ll make adjustments again in November. Our focus is making Prime something that strengthens the protocol while directly rewarding the community who supports it.
Appreciate your response! XVS staking is sitting at about 13% APY right now, and we’ll keep focusing incentives on the markets that really make sense for the protocol. We know Prime isn’t perfect, and we want to keep working with the community (you all always bring great ideas) to reshape it so it benefits the protocol and Prime holders.
If the allocation strategy works as planned, protocol revenue goes up - and that means higher Prime rewards, which we can then spread across more markets.
GM Steve, thanks for sharing your thoughts. We actually do have some plans for treasury funds, but other than that, the funds that we have to allocate to Prime is what is set up in the tokenomics model. For borrowing, we proposed to flatten IRM curves which will make our rates more competitive with the current lending landscape. And we also want to review Prime rewards rates and allocations monthly, meaning if this doesn’t work, we will adjust and optimise.
We 100% want to spend the treasury funds to make us #1 in DeFi. Regarding a proper roadmap and plan, that is in the works and coming in the next few days. Please keep a lookout on our social channels to see.
For now, with Prime rewards, we’re doing what we can with what we have to not spread them out too thinly, allocating to markets we believe will drive the highest impact to Venus. With increased protocol usage, we will have increased revenue, and that revenue flows directly back to XVS stakers and Prime holders.
Hi Jaime, appreciate the support! Yes, I personally believe that these steps will improve long-term sustainability and will prove a positive effect on Venus, and hence the Prime program as whole.
For the month of October, part of the issue also is the depletion of rewards in September. Spreading the rewards too thin would reduce the impact of Prime on users even further. Of course, with the monthly reviews, we can readjust as required should we not see the desired impact of these changes. We’ll keep your ideas in mind as we move forward.
Thanks for the support! Reading your comment, I definitely agree that a deeper rework would be beneficial. We’ll look at the data more deeply to develop a strategic rework.
Great idea and concept overall, but I strongly disagree with allocating zero rewards to prime stable borrowers. Instead, we should consider reworking the current prime strategy to enable smoother onboarding of new participants—whales and others alike. Let’s prioritize incentivizing XVS holders and stakers moving forward.
With global market capitalization up 2.5% and XVS going in the opposite direction, I suggest a quick decision be made on this matter. Whatever it is, the debate has generated uncertainties that are clearly not beneficial.
Hi Joel, thanks for joining in the discussion! A few reasons to make changes to Prime before a deeper rework are that the current model is unsustainable, has resulted in the depletion of funds, and does not benefit the entire protocol as much as we’d like.
As you pointed out, the Prime program is meant to reward loyal users to Venus. We want to retain that ideology, but the truth is that with decreasing revenue, there are decreasing amounts of rewards to give out. If we want to reward XVS and Prime holders, we need to increase the revenue of Venus. This can only be beneficial to those holding Prime as more revenue gets funnelled towards Prime incentives.
The goal with making changes to Prime is to optimise it. This is definitely more of a stop-gap measure (that can be reviewed at the end of the month) and we want to work more closely with the community for a deeper rework of the program. Already seen lots of great ideas that we’d like to look into together with data to make the most informed decision that we can.
That’s definitely the broader goal here. We want to work with the community to improve Prime and optimise it for the protocol and users (which IMO works in tandem anyway). For now though, with limited resources for October and wanting to avoid spreading them too thinly, this is our proposal. If it doesn’t achieve the desired outcome, we can always change it for November. Right now, we’re re-evaluating a lot. Staying flexible and open to changes is essential to bring Venus back to glory.
Hi Remy, really great insights here. I’ve taken note of your comments on the broader Prime restructuring and something we wanna do is to optimise Prime. Agreed on the complexity as well, there are a lot of mechanisms around Prime and how rewards are calculated that require a lot of math. While it made sense for the time, it might need re-evaluation now.
When you say “redirect this 20% income portion to all XVS stakers” do you mean simply boosting XVS staking APY?
For now, with the resources we have left to allocate for October, we’ve decided to pump it into what we believe will bring the best ROI for the protocol (which will then increase revenue for November’s Prime allocation). These issues arose from previous inefficiencies, which we hope to fix with the retroactive allocation model as well as monthly reviews of the Prime rewards rates.
Right now XVS has a staking APY of 13%. Just to clarify, your suggestion is to take the current 20% allocation to Prime and put that into boosting the XVS staking APY?
Personally, I think Prime is a powerful tool we can use to incentivise key markets and benefit the protocol. When the protocol succeeds, so does its community, especially with a setup like Prime. Revenue feeds directly back to the Prime users who would have helped with the increased revenue. However, right now, that is not the case. There are some inefficiencies with Prime we want to address, so that we can achieve that optimal use of the Prime program.
With the monthly reviews, we can look at whether or not we achieved the goals we set out to achieve with the changes proposed and adapt to the results quickly. There are things to optimise on multiple levels that we cannot resolve entirely at once.
Yes,put prime rewards into boosting the XVS staking APY!
This can directly increase the price of XVS , and then we can use some XVS emissions to incentivize the USDT/USDC pool to get more TVL, rather than relying solely on the supply of USDT/USDC from those 500 Prime users.
Hey Remy, I just wanted to follow up on point 3 and share our Prime rewards calculator. It might be a helpful tool for you and others who want to calculate Prime rewards
With the adjusted IRM curves, and continuing incentivising USDT/USDC supply, borrow rates should be managed as well. We are working with $50k for October, so it would serve all our best interests to pump it into very selective markets.
We will remain flexible, and bringing back rewards to Prime borrowers is not out of the question if revenues increase or if the effect of this removal is poor. But for now, the situation with Prime rewards is urgent. We need to adjust it so the reward pool stops being empty, and we need to allocate smartly to benefit the protocol the best.
For example if you have total $100k in assets that receive a prime boost
20% BTC
20% ETH
X% USDT, Y USDC , Z% XVS
What is the optimal amount of XVS to have to maximize daily revenue? Considering that you can change amount of usdt, usdc and xvs
Adding too much stables on too low amount XVS does not utilize prime benefits fully, and vice versa.
Or at least a spreadsheet template where it is easy to play with the formula. If you supply a lot of boosted assets it is very time consuming to calculate each one separately via the calculator you have provided.
If there would be an excel formula you could solve this problem via linear solver. But it is hard to reproduce the formula from the docs, at least for me.
When you say “redirect this 20% income portion to all XVS stakers” do you mean simply boosting XVS staking APY
Ideally, remove the double APY component with Cobb-Douglas complexity and simply distribute 20% of revenue to prime stakers - similar to how Thena’s NFTs work. If that’s too complicated, just distribute it to all stakers to simplify and make tokenomics more attractive, while still providing additional benefits to prime holders so they’re compensated for their loyalty and don’t feel left behind. This part requires a lot of thought and brainstorming, and I can’t provide a perfect solution right now. Maybe some budget from treasury or another form of income redistribution.
Yeah, there’s definitely a lot to consider. We’re actively looking at how to improve Prime and your comments are very helpful - really appreciate it. The optimal Prime allocation tool is also definitely something we can look into, though if we’re exploring changing the way Prime works, we might do that only after things are more final.
We’re also looking into developing a budget for the treasury to grow the protocol. If I could distill it quickly, the philosophy now is primarily that growing the protocol’s revenue is key. Since revenue directly feeds XVS staking and Prime rewards, users will see the most sustained benefit when Venus Protocol improves its feature set, listings, and creates sustainable increased revenue.
This current proposal is a stop-gap measure to (a) prevent Prime rewards from running out (b) make the rewards distribution flexible so we can react quickly to users and (c) allocate the remaining resources allocated to Prime rewards in the most effective way (since there was over-spending in Sept).
