As one of its initiatives in 2021 vision, Venus Protocol, a decentralized algo-based money market and stablecoin network, confirmed today that it would embed Cardano (ADA). Last November, the mainnet of the Venus Protocol went live with deployment solely on the Smart Chain of Binance.
With respect to blockchain of Binance, the covenant creates a decentralized finance (DeFi) money market network and already has more than 18,000 users with almost $2 billion in Total Value Locked (TVL).
To generate interest depending on the demand for a particular asset, users of the covenant may borrow crypto or lend their holdings. Accounts stored on the blockchain offer capital (BNB or BEP20 tokens) via the vToken Contracts to gain vTokens or borrow tokens from the covenant.
The foremost decentralized stablecoin VAI, hosted on Binance Smart Chain, is provided by Venus Protocol. Without centralized operation, the stablecoin is backed by a collection of stablecoins and crypto tokens on the Binance Smart Chain. In this way, VAI is defined by similar collateral given to the covenant. Venus vToken Contracts monitor those balances and fix lending rates algorithmically.
Following the roll out of Mainnet last November, covenant users were capable of providing and borrowing Swipe (SXP), Binance Coin (BNB), USDT (USDT), USDC (USDC), BUSD (BUSD), and Venus (XVS) to gain rewards related to liquidity mining. Filecoin (FIL) and DAI, among many others, have been embedded ever since. As per the blueprint for 2021, subsequent to this series, Cardano (ADA) will be included:
Cardano (ADA) has grown exponentially to be among the world’s largest 4 cryptocurrencies in terms of market value. Transaction volumes have also increased sharply as nearly all major cryptocurrency exchanges have listed Cardano’s native token ADA. This asset would also be recommended for inclusion in the money market.
The Swipe group also stated that Venus DEX, a decentralized order book-centered exchange facilitating high-frequency trades and provide market-maker perks for traders, will be built next year. Furthermore, after the core group sees “farming networks harness Venus for high frequency transactions and loan issuances, which generates hundreds of thousands of dollars in everyday transactions,” the covenant would impose an “origination fee.”
For creating and delivering a loan (depositing/withdrawing) using the covenant, a minor charge of 1 bps (basis point), equaling 0.01%, will be included under Venus Origination costs. At that rate, the covenant funds which can be used for all governance requirements, including buying back and burns, rewards, etc.) can carry roughly more than $100,000 in normal charges without affecting the regular creditor and lender offering the high yield interest rates.
