Prominent crypto exchange Binance has announced the launch of a decentralized stablecoin system known as Venus. According to Binance, it is a “regional version of Libra.”
Decentralized Stablecoin System
Venus is working to create a platform on Binance Smart Chain, and the platform will be based on decentralized finance (DeFi). It will perform two options: lending of digital assets and creation of BEP-20-based stablecoins. Binance CEO Changpeng Zhao says Venus is basically a mixture of Compound and MakerDAO. The system will mint the decentralized stablecoin named VAI on the Binance Smart Chain. Binance stated:
“VAI is minted by the same collateral that is supplied to the protocol. Users can borrow up to 50% of the remaining collateral value they have on the protocol from their vTokens to mint VAI.”
“The collateral provided to Venus will be represented by vTokens (such as vBTC) which will enable users to redeem the underlying collateral as well as to borrow against it,” the exchange added.
Binance users can claim Venus (XVS) tokens as a result of staking coins such as Binance stablecoin (BUSD), Binance Coin (BNB), and Swipe (SXP). As per the announcement, XVS will be list for trading on October 6 in different pairs including XVS/BUSD, XVS/BTC, XVS/USDT, and XVS/BNB.
Features of the Project
There are three main characteristics or functions of the project. First, it will provide a platform “where users can borrow assets whose value is 75% or lower than that of the assets supplied.” Second, a user can “Earn interest by supplying supported collateral assets to the protocol.” Third, it offers a unique “ability to mint VAI, the protocol’s default synthetic stablecoin pegged to the value of 1 USD.”
Out of the total XVS supply, 79% will be dedicated to three pools: Lending Pool (35%), Borrowing Pool (35%), and Stablecoin Pool (30%).
According to Binance,” Venus is governed by its native token XVS, which allows holders to participate in voting on various platform initiatives such as adding new collateral, changing parameters, initiating product improvements, and more.”