Venus Tokenomics Upgrade v3.0 Proposal

Of course I support 100% of this proposal. On boarding more new users must be a priority now.
It is bear market and a unique opportunity to set us apart from other players.

Permissionless does not refer to without governance. I do believe that 1M will get the liquidators get in the XVS game a bit more engaged.

The liquidator measure makes a lot sense as to make easy money at Venus should be a skin into the game and not just someone wich dont use Venus to keep draining liquidity, this had happened for the last year already… anyone and bots being built to liquidate without worry about Venus.

a- a better solution would be allow only people wich has xx% staked into XVS vault, over a determined period to have acess to liquidations, limiting the liquidation to 100 000$ at once… this would allow more people to liquidate big wallets instead a single person liquidate …

b- VENUS OWN LIQUIDATOR VAULT- where community would deposit a bag of coins, wich would be used to liquidate, instead allow outside players to have such priviledge, draining Venus liquidity.(Can be started with some of the current reserves of VENUS), the only rule to acess this Vault should be has atleast 3000\10 000XVS… be skin in the game…

The Venus Prime isnt a token that will be sold or traded as i had understood, it will reward people wich uses the protocol, with more income into the staked\borrowed asset as i had understood. Soo isnt a new token at all.

XVS VAULT Mehchanics

Venus shouldnt damage the stakers at the vault wich stake and unstake right after, as the market is unstable… its normal people wanna to manage their positions with the XVS… and not loose money because it has a 7 days lockup… in last sentence would make something as Cake made in the past wich is a locking period … if claim before a fee will be deducted…

Soo in the general this sounds great news to Venus, as we will be doing a lot things into medium period. I believe just we need to check all possibles cenarios, wich for me the only issue i believe need to be adjusted is the “liquidation”…(limiting liquidation to whales, can bring back Team Bravo… or any other bad player to be eligible to liquidate at Venus…)

Almost forgoted, BNB Validator…

Venus has currently more then Half of the coins required to assume a position as Validator, in fact we could already asssume those spot with around 350 000 BNB we can assume those … and start a new journey with outside revenue to the protocol… instead focus only at lending market revenue… wich is good only with Binance Events wich require BNB… I believe this is the best moment to start those Validator goal… instead burning the BNB We could use them to start this Validator, ( right now this could allow the protocol to get around 3000 BNB each month\100BNB daily…thats a 20 000$daily, and a 600 000$ potencial income each month…the revenue would help a lot the protocol to moove forward and grow …

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There is a valid case that users may want to withdraw XVS from vault, but will be penalized with no rewards for 7 days. That is not correct. If you believe users are gaming the system, then change the lock mechanism that a user can’t request withdraw after adding vault for 7 days. Give the rewards for 7 days and stop the rewards after 7 days. If it up to the user to withdraw after 7 days or add to vault again. After adding to the vault 7 day lock period starts again.

The adjustments in the loan protocol seem correct to me. To provide some vision I would like to comment on the use cases for the XVS token and how to get more users.

The XVS token is very scarce, it maintains a system of DEFI lending, stablecoin issuance, liquidations, it has huge potential to turn the entire Venus ecosystem into something much bigger if only some things were improved. As the core of the ecosystem, it needs to be protected and focused from there to everything else, whereas currently I feel like they leave it for last, i.e. just a governance token rather than a store of value.

I think XVS is better than BTC… it has a lot more use cases, it’s clean, it has a lot of advantages as digital money and a world store of value. I would like the XVS token to have the central role of the ecosystem at this stage, this will be the best way to attract new investors, show them that it can be one of the best reserves of value in the crypto world.

How to do it? With serious and mature actions that guarantee the trust of the users, a determined and well-communicated schedule that is respected as much as possible, with as few surprises as possible (especially unpleasant ones). Investors want to see that their money is taken seriously and is not going up in smoke. Venus has everything to be one of the best crypto world value reserves, it is time to improve it and carry out the objective, show the public that the reserves can grow and that they will be well invested to give them the confidence of having invested in the best DEFI space. :muscle:

Hi all, I wanted to share some more in depth analysis and details of the specifics around the Prime Token SBT part of the new tokenomics, which even though it only is allocated 20% of the protocol revenue we believe is a critical element and should have outsized beneficial impacts to the protocol and tokenomics of XVS at large.

Updates to the Venus Prime Soul Bound Token

Big Takeaways:

  1. $2.5 million in marginal revenue to the protocol
  2. Stable Coin APY Boosts for borrow & supply of 2 - 7%
  3. Estimating 5 - 10% total TVL growth for Venus Protocol (combined Supply & Borrow)
  4. Estimating 50% increase in XVS staked
  5. Qualified User Growth of 500% (defined as users both staking & providing TVL to markets)

The details for the Prime Tokenomics:

The Venus Prime Token is a segment of the new Venus Tokenomics V4 specifically designed to incentivize XVS staking and protocol usage, and in return for those members that qualify, they will receive a soul bound token, the Prime Token, which enhances their stable coin APYs by paying in cash back rewards 20% of the Venus Protocol Revenue (which was formerly used to buyback and burn XVS). There are two forms of the Prime Token, an ‘OG’ irrevocable token, and a revocable token which can be earned via staking XVS. We outline the details further on how to earn the Prime Token, however the cash back boosts apply to both versions of the Prime Token. One important thing to note - we are treating this as a pilot program whereby only a maximum of 100 Irrevocable Prime tokens and 1,000 revocable Prime Tokens will be issued during this pilot period (est. 6 months post production deployment). If you are a recipient of an Irrevocable Prime Token, you won’t have to qualify for the Revocable - and in fact will only receive the 1 OG token even if you qualify for both. From this pilot program we will be assessing the effectiveness of the tokenomics, analyzing the impact to the amount of XVS staked, protocol TVL, community engagement, and other qualitative and quantitative metrics. If successful, the maximum amount of tokens can be increased (by community consensus) to allow new entrants (both irrevocable and revocable).

The 100 OG’s to be issued Irrevocable Prime Tokens are based on the trailing 12 months of usage of the Venus Protocol plus staking XVS.

To qualify for the Prime Token you will have to stake XVS for a minimum of 90 days, and at least 1,000 XVS tokens. The staking mechanism is not based on optimistic staking, but rather you can claim the Prime Token once you have actually staked your 1k XVS for 90 days, whereupon the app will present you with the opportunity to claim the Prime Token. Just staking XVS, however, does not reward you on the value of your XVS staked, but rather on the amount of Supply and Borrow you provide to the protocol. This we call Qualified Value Locked (QVL). As a user with a prime token, you will get cash back rewards on your QVL, which effectively is a boosted APY. This means that when the boost is above the borrow rate, you will get paid to borrow!

There are 4 tiers for the staking, however, which can be modified by the community on a regular basis by vote. These tiers reflect a cap on your QVL. What this means is that if you are staking 1k XVS (Tier 1), and have supply of $200k and borrow of $100k, you will get cash back on the first $50k of your supply, and 100% of your $100k in borrow - for a QVL of $150k. The $150k of excess supply will get paid the standard APY rate for that market plus the XVS emissions (as per the updated emissions schedule). Based on our modeling exercise, the hope is that users in this situation will borrow additional money to purchase XVS to stake it to reach the next tier. The Prime Token, however, is revocable such that when you request a withdrawal of your staked XVS, if that amount drops your XVS below the bottom tier your Prime Token will be burned and you will have to restart the 90 day clock to claim it again. We believe this will create a stickiness to staking XVS such that it will be sufficiently disincentivizing to withdrawal for all qualified token holders.

After weeks of data modeling we have some exciting estimates to share, please note these are estimates and not to be taken as facts. We are basing these on several scenarios, of which this tiering system we decided was the most beneficial to the overall goals to start with. The intent is to have these tiers malleable based on community voting, to allow for changes as the community sees best fit.

Each tier requires a minimum amount of XVS to be staked (the Threshold) for at least 90 days to qualify. Once qualified, the supply and borrow balances are capped to a maximum level for fairness and balance of our users. Each tier is an incremental of additional QVL that users will be paid on, so at tier 2, users already have $150k of available QVL and now get an additional $750k for a total of $900k cap on QVL. All Tiers are paid the same boost rate, only the QVL cap is different at each level. Of note - these QVL balances only apply to the stable coin, BTC, BNB, BETH, and ETH markets.

Tier Threshold (XVS Stake) Supply TVL Cap Borrow TVL Cap Total QVL
1 1,000.00 $50,000 $100,000 $150,000
2 10,000.00 $250,000 $500,000 $900,000
3 50,000.00 $1,000,000 $2,000,000 $3,900,000
4 100,000.00 $5,000,000 $10,000,000 $18,900,000

User Journey Example:

Suppose you are a user with the following token data points;

XVS Staked Supply Balance Supply QVL Supply APY Borrow Balance Borrow QVL Borrow APY Prime Boost APY
40,000 $1,200,000 $300,000 1.00% $200,000 $200,000 -3.10%* 5.00%

*using averages from the selected markets current APY

Currently you are qualified for Tier 2, and assuming your 40,000 has remained in the Venus Vault for 90 days, you can now claim your Prime Token. At Tier 2, you can qualify $300k of your supply to be paid the boost, and up to $600k in borrow (but you only have $200k in borrow). So you would receive the following cash back boosts and net interest payments:

Supply * rate + supply QVL * boost - (Borrow * (Boost minus rate))

1,200,000 * 0.01 + 300,000 * 0.05 - (200,000 * (0.05 - 0.031)) = $30,800

With the current boost above the borrow rate, you are receiving a net benefit from borrowing (and this does not include the additional XVS emissions rewards). Because of this net positive borrowing, and you are close to the next tier 3 - you may want to borrow enough money to buy 10,000 XVS to stake and qualify for tier 3. Lets assume XVS price is $6, so you borrow $60,000 to buy XVS and stake - and after 90 days now you are bumped up to tier 3. Now your earnings look like this:

XVS Staked Supply Balance Supply QVL Supply APY Borrow Balance Borrow QVL Borrow APY Prime Boost APY
40,000 $1,200,000 $1,200,000 1.00% $260,000 $260,000 -3.10%* 4.50%

*using averages from the selected markets current APY

At tier 3, now 100% of your supply balance is qualified value locked, so you’ll earn the entire prime boost on those balances plus all of your borrow balances. Let’s suppose the prime boost drops by 0.5%, now the economics of your new investments look like this:

Supply * rate + supply QVL * boost - (Borrow * (Boost minus rate))

1,200,000 * 0.01 + 1,200,000 * 0.45 - (260,000 * (0.045 - 0.031)) = $69,640

By borrowing some money and stalking it to get to the next tier, you have over doubled your annual earnings with the Prime Boost!

With this in mind, and based on our datasets we have been utilizing for the models, we anticipate significant growth in users that are both staking and providing supply and borrow to the markets. This should drive value to the protocol, and those that are simply supplying and borrowing may also be enticed to buy XVS to stake it to qualify for one of the tiers - thus leading to further strength in the XVS Vault and tokenomics. By our estimates, supply may increase as much as 5% and borrow as much as 25%, leading to an increase in protocol revenue of ~ $2.5mm annually
(~100mm additional borrow @ 3.1% minus 55mm additional supply @ 1% )

A few graphs for illustrative purposes:


Interesting idea to increase demand for XVS😄

Sorry, let me check.:sweat_smile:
Is the formula for profit and loss correct?
I believe that the supply and borrowing sides are added, not subtracted, as in the following formula.

Supply * rate + supply QVL * boost + (Borrow * (Boost minus rate))

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Ahh well the end numbers are right but yes you are correct since the boost is greater than the rate it is an addition your forumula here being correct haha (but same earnings numbers):
Supply * rate + supply QVL * boost + (Borrow * (Boost minus rate))
or Supply * rate + supply QVL * boost - (Borrow * (Rate - Boost))

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Please have a look at the updated and latest proposal everyone.


Here is what i think stinks.

“Irrevocable ‘OG’ Prime Token - claimable by a selected group of users based on consistent protocol usage during 12 months and XVS Staking (100 users pre-selected for initial distribution)”

You are only giving OG tokens to someone whos been staking for 12 months on venus.

Anyone with any sort of brain pulled their money out of xvs staking because basically it was a shitshow for the last 12 months. Nobody knew what was going on and nobody knew the direction or if venus would even be around. So you are rewarding people based on stupidity. You should be rewarding OG holders who were down since the original airdrop and are still using the program. Those are the real OGs. Not someone who was only here in the last 12 months and threw a few shekles in the vault.

I think its a really bad move to alienate those OGs and use the last 12 month retroactively looking at anyone whos staked. This actually makes me NOT want to stake on venus anymore and really take profits once the coin eventually pumps be in 2 months or 48 months from now.

Remember all those people who were using venus, and then when BTC dropped from 65k to 30k and venus protocol stopped working correctly and everyone got liquidated because they couldn’t logon to venus? Yea you are ignoring those people. What about the people who were holding venus since over 100 and Binance allowed its CEO to rug pull the whole project causing 100m debt? Also ignoring those people. Is that really the target audience you are trying to alienate?

Going back 12 months for someone whos been staking every day that long is just a really bad idea.

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Can’t agree more here

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Seems like more OGs since the beginning are feeling left out

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@Xvshodler , I really appreciate the feedback - this was a baseline idea for the OG token and BY NO MEANS SET IN STONE. It was just something we looked at with the data that was available, but I would love to hear a different proposition for qualifications for getting the OG token. Any and all ideas are welcome, and the fact that it ignited you makes it mean that the Prime Token is something worth fighting over - and so we should make sure we appreciate the True OGs, beyond the strict data. Please let us know what what your ideas are.

Also - the 100 limit is also not set in stone, we can expand or subtract that amount for the initial pilot, though probably makes sense to put an upper limit on 500 tokens to be gifted to OGs at least in the initial pilot program (which of course would be expanded assuming this is a successful tokenomics upgrade).


I know the new team plus you guys were not here since SXP days, but there are probably like 10-20 people max still around. These people got totally worked over with all the nonsense of the protocol. A lot of us including myself were just trying to use the platform and stake xvs to get loans. Back in the day the platform would go offline during volatile times and I know for a fact a lot of true OGs got liquidated for millions during the first BTC dump due to the platform lockup. On top of that, pretty much all the OG’S that had any sort of loan got hit hard when Binance dumped the token on the 100m dollar exploit. Which no matter what your rational was, Binance in a lot of our eyes was totally responsive for that. And to add insult to injury, the protocol stopped working during that time so you couldn’t even exit your loans AGAIN. I personally lost funds because the protocol went offline during a volatile time, and stopped using the protocol for a period of time until I thought that was fixed. Part of that time is the time frame you are stating in your 12 month discovery.

So now you have binance not stepping up and covering the 100m exploit and now making the protocol pay for that, so users who are still active since day one are the ones holding the bag and having to sit and wait for this whole process to play out and we know the token wont recover until this happens. Its a very small and hardcore crowd still here, you can ask the mods in the chat because they were also here and lost money.

Add onto that the VRT token disaster where we got back less than 5% of what we in reality we should have at 12000 to 1. But thats another topic for another day.

Those are the people you need to take care of and bring back to the protocol, not the people in the last 12 months IMO. The real OGs. You could take care of both people as well, but then were is that money going to come from?

Feel free to ask any questions, I dont have an issue answering here.


Should respect the people who are still here since the airdrop


This was published today. So I guess legacy users mean nothing to Venus then. Nothing’s changed.

As a general follow up, because of the complexity of all of the moving parts with the tokenomics V3, we are pushing forward with mechanical pieces first that will require the most development work and timeline. These changes will be proposed early next week along side some other V3 new product integrations and roadmaps. In the meantime, I wanted to get the updated mechanics that are the key changes to be implemented (if approved) and impact the actual protocols of Venus.

The income allocation is split into two pieces - and we expect further changes to be proposed to the DAO and community based on financing of the risk fund, and there will be a secondary discussion on the tokenomics specifically regarding the Burn and /or inflation emissions of XVS. I want to reiterate that the burn / inflation cut off is intentionally left out of this, as it is not a mechanical and technical upgrade to the protocols, and so will be the primary part of the second half of the V3 tokenomics update.

Key changes to Venus Protocols

  1. Revenue Allocation Update
  2. XVS Vault Mechanics
  3. Prime Token Issuance & Integration to Venus Markets

Revenue Allocation Update

Market Revenue Allocation Only. For the Venus Prime Pilot period - its APY boost will only be based on the interest reserves revenue, directly tied to the TVL. This means there will be two income allocation schemes initially, with the goal of condensing them into one after the Pilot period.

Revenue Portion Allocation Segment
40% Risk Fund (including financing)
20% XVS Vault Rewards
20% DAO Operations & Funding
20% Venus Prime Token Program
  1. The Risk Fund, being established to cover the shortfalls of the protocol in the case of ineffective or delayed liquidations, will comprise 40% of the protocol revenues. This 40% may also be used as a means to finance the current shortfall and provide an immediate upfront buffer to the risk fund via a financing (bond) mechanism.
  2. The XVS Vault rewards of 20% remains the same
  3. The DAO Operations budget will be cut from 30% to 20%
  4. The former 20% buyback and burn allocation will be transferred to the 20% allocation to the Venus Prime Token

Because Venus is rolling out new products that have varying impacts, the income to Venus Prime is limited to interest reserves only. As such this income allocation schema applies to liquidations and new product revenues, until technically and from a tokenomics perspective we understand how to properly allocate and incentivize the Prime Token holders for each new product.

Revenue Portion Allocation Segment
48% Risk Fund (including financing)
26% XVS Vault Rewards
26% DAO Operations & Funding

XVS Vault Mechanics Details

  1. The XVS Vault will be upgraded such that when users request a withdrawal, those balances will no longer qualify for earning staking rewards, they will be considered already liquid and withdrawn from the vault.
  2. The XVS Staked in the vault will be used in the case of a shortfall (only going forward after depletion of the Risk Fund) to cover the shortfall, using up to a maximum of 10% of the XVS staked in the vault. This means that staking XVS you are putting 10% of your funds at risk to cover shortfalls in the event that the protocol cannot cover it first with the funds in the Risk Fund or other liquidations remediations methodologies. 10% is the maximum amount any single staker can lose, however, but justifies the rewards earned by staking.
  3. The Vault will integrate the Venus Prime Token - issuing, upgrading and downgrading the token based on the metrics described below in the Venus Prime Token. The Vault becomes the Manager of the Prime Token contract, thus performing the various duties required to manage the tokens.

Venus Prime Token Details

  1. Venus Prime Token is a Soul Bound Token (non-transferrable NFT).

  2. There are two forms of the SBT, the “OG Irrevocable Token” and the “Earned Revocable Token”.

  3. A user can only have either an OG or an Earned token, they cannot hold both.

  4. The OG Token will be issued by the Venus DAO to a select group of up to 100 “OG” users based on certain criteria defined by the DAO over the past 18 months. The OG Tokens will automatically have the highest tier of qualifying balances, regardless of the amount of XVS Stake. These tokens cannot be burned, “revoked”, and cannot be transferred to any other wallets.

  5. Earned Tokens will be a non transferable token that can be rewarded to users based on meeting the below criteria. If they fail to maintain the minimum criteria, then their Token will be burned and revoked, and the process to earn another token will restart.

  6. The minimum to qualify to receive a Venus Prime token is to stake 1,000 XVS tokens in the XVS Vault, and keep the XVS staked (and not withdrawn) for at least 90 days. Once the 90 day time has passed, users will be able to claim the Prime Token, which is then issued by the XVS Vault. When a users requests a withdrawal of tokens that would result in their staking balance being lower than 1,000, then their Prime Token will be burned.

  7. If the user stakes more XVS to qualify for the next tier, once a 30 day staking time has passed they can trigger an upgrade to their token to that tier

  8. If they withdraw some XVS but still above the 1,000 level - this will trigger a downgrade to their token, downgrading it to the level applicable to the amount of XVS Staked.

  9. Prime Tokens themselves do not enable value, but rather the tokens allow users to earn boosted yields on selected markets, based on tiers and a capping system. The users with a Prime Token will automatically receive boosted APYs continuously from the Markets Protocol, based on the Markets Upgrade.

  10. The Markets Upgrade will enhance the protocol such that it will incorporate the balances that are owned by Prime Token Holders - issuing them 20% of the revenue earned by the protocol directly from the Markets, continuously distributing the APY to those Prime Token Holders.

  11. XVS Tiers

  12. Users need to stake a minimum of 1,000 XVS to reach tier 1, and then once they stake additional XVS can upgrade their Prime Token to the applicable level based on the amount of XVS staked, having then staked it for at least 30 days additional.

  13. If you immediately stake XVS at a higher tier, your token issued will automatically take the highest tier possible, the upgrade only impacts if you were issued a lower tier and then stake additional XVS to reach the next level (or beyond).

Tier XVS Staked
1 1,000
2 5,000
3 10,000
4 50,000
5 100,000
  1. Caps on the Qualifying Balances

  2. The Markets Protocols will have caps on the balances that qualify for the boosted APY. This enables more lower tier participants to receive higher boosts, without being fully diluted by the largest holders and depositors of the markets.

  3. All participants are paid the same effective APY, based on their balances up to the cap limits.

  4. The supply cap is half the amount of the borrow cap.

  5. Each market has an individual supply and borrow cap.

  6. The caps here are represented by a dollar amount, but will mechanically be set as a cryptocurrency amount, and reset back to the dollar amount on a regular basis.

New Caps based on Tokens

Token Category Tier Supply Borrow
DAI Stable Coin 1 $8,000 $16,000
TUSD Stable Coin 1 $8,000 $16,000
USDC Stable Coin 1 $8,000 $16,000
BUSD Stable Coin 1 $8,000 $16,000
USDT Stable Coin 1 $8,000 $16,000
BETH Non Stable Coin 1 $15,000 $30,000
ETH Non Stable Coin 1 $15,000 $30,000
BTCB Non Stable Coin 1 $15,000 $30,000
BNB Non Stable Coin 1 $15,000 $30,000
DAI Stable Coin 2 $24,000 $48,000
TUSD Stable Coin 2 $24,000 $48,000
USDC Stable Coin 2 $24,000 $48,000
BUSD Stable Coin 2 $24,000 $48,000
USDT Stable Coin 2 $24,000 $48,000
BETH Non Stable Coin 2 $45,000 $90,000
ETH Non Stable Coin 2 $45,000 $90,000
BTCB Non Stable Coin 2 $45,000 $90,000
BNB Non Stable Coin 2 $45,000 $90,000
DAI Stable Coin 3 $80,000 $160,000
TUSD Stable Coin 3 $80,000 $160,000
USDC Stable Coin 3 $80,000 $160,000
BUSD Stable Coin 3 $80,000 $160,000
USDT Stable Coin 3 $80,000 $160,000
BETH Non Stable Coin 3 $150,000 $300,000
ETH Non Stable Coin 3 $150,000 $300,000
BTCB Non Stable Coin 3 $150,000 $300,000
BNB Non Stable Coin 3 $150,000 $300,000
DAI Stable Coin 4 $160,000 $320,000
TUSD Stable Coin 4 $160,000 $320,000
USDC Stable Coin 4 $160,000 $320,000
BUSD Stable Coin 4 $160,000 $320,000
USDT Stable Coin 4 $160,000 $320,000
BETH Non Stable Coin 4 $300,000 $600,000
ETH Non Stable Coin 4 $300,000 $600,000
BTCB Non Stable Coin 4 $300,000 $600,000
BNB Non Stable Coin 4 $300,000 $600,000
DAI Stable Coin 5 $800,000 $1,600,000
TUSD Stable Coin 5 $800,000 $1,600,000
USDC Stable Coin 5 $800,000 $1,600,000
BUSD Stable Coin 5 $800,000 $1,600,000
USDT Stable Coin 5 $800,000 $1,600,000
BETH Non Stable Coin 5 $1,500,000 $3,000,000
ETH Non Stable Coin 5 $1,500,000 $3,000,000
BTCB Non Stable Coin 5 $1,500,000 $3,000,000
BNB Non Stable Coin 5 $1,500,000 $3,000,000

Please, can you provide us with the “Venus Prime Soul Bound Token” Contract Address?. Thank you.

+1, it’s been a long journey

Great upgrade that will align XVS with the tokenomics expected from modern DeFi protocols in 2022