As most of you know, JL recently published a Medium article with an exciting 2021 roadmap for the Venus Protocol and $XVS.
One of the more intriguing items on that roadmap was the introduction of Venus Reward Token (VRT), as described below:
The Venus Reward Token (VRT) will be proposed to be the liquidity incentive token for Venus Protocol. This will enable XVS to become more scarce and valuable by reducing the emission rate of XVS and creating more governance based rewards programs. Currently there are over 20M more XVS to be mined and distributed thus tripling the current supply which creates a much higher inflation resistance. This mechanism will create a rewards token while creating longer inflation programs for XVS.
The proposal will have VRT at a supply of 30 billion and over 8 billion will be airdropped at a rate of 1,000 to 1 to current XVS holders at a certain snapshot date to be announced if passed.
Furthermore, JL touched on the subject of VRT in Telegram during a mini-AMA, saying:
XVS would be SoV and Governance where VRT would be rewards like Neo Gas. We wouldn’t cut XVS farming, it would be reduced and extended while giving VRT as a bonus with listings. We need to look into how GAS and VGAS kept its value.
Obviously the team has an overall idea on how they would like to implement this, but it’s also evident that not all the details have yet been finalized. Given that this would be quite a serious shift vs. the current model where XVS is being used as the main incentive for people to use the Venus Protocol, I thought it would be worth creating this thread so we can gather ideas on how to best implement VRT.
I may be missing some parts of the puzzle or perhaps not fully understanding the benefits of the proposed VRT token…but if it means reducing and extending the distribution of farmed XVS rewards, isnt it a sum zero game then?
If holders of XVS earn lower yield, they will sell their XVS anyway to earn higher yield somewhere else.
IMO, it seem more comprehensible to use the 1 bps fee as dividend for XVS holders
In short, skip the VRT token idea, create a XVS vault, similar to the VAI vault, and allow XVS holders to earn high yield from farming AND dividends from the protocol fees.
I belive this will give incentive for those who earn XVS which ever way, to stake in the XVS vault, thus not selling their tokens.
Obviously, imo, the price of XVS would skyrocket and create a ripple effect on the entire Venus Protocol.