Venus Protocol Owned Liquidity

Preliminary considerations:

Venus is a lending protocol which revenues are generated by users (customers/borrowers) who borrow cryptocurrencies supplied to the protocol by other users (suppliers). Suppliers are incentivized by interested paid by borrowers and other rewards granted by venus and venus partners.


Suppliers play a double fundamental role for the protocol. Firstly, supplying cryptoassets, they generate liquidity on the protocol that can be used from borrowers for their financial strategies (spread on APYs, short positions, etc…). Secondly, once this liquidity has been used from borrowers, supplying a greater quantity of token, they keep APYs low and more attractive for borrowers, further incentivizing borrowing and lending process.

I think Venus protocol should bring its focus on the supply, implementing a protocol owned liquidity process, where a percentage of the incomes generated from the lending (e.g. 1%) are reintroduced into the supply of that market. In this way Venus can secure a constantly increasing amount on the supply-side of the protocol, that will never been withdrawn. It will constantly increase both from the fee described and the supply APY on that markets.

No trading fees are required to swap coins at the end of every quarter, fees generated from a market will be supplied into the same market (mostly the market is used, greater will be the “protocol owned liquidity” on that market)

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