Venus Protocol is a trusted decentralized finance lending and borrowing protocol that's deployed on the BNB Chain. Initially launched in 2020, it combines the stablecoin minting facility of Maker and the algorithmic money markets developed by Compound, providing a simplified user experience and core capabilities in a single application.
Interacting with Venus V4 is straightforward. Supply your chosen asset and the amount to start earning interest. Additionally, once you supply assets, you can also borrow against them. Any interest earned from supplying assets can help offset the interest you accrue when borrowing.
Your supplied funds are stored in a smart contract on the BNB Chain. The contract's code is public, open-source, and has been formally verified and audited by external auditors. You can withdraw your funds on demand or receive Venus Tokens (vTokens) representing your stake. vTokens are as freely tradable as any other cryptographic asset on BNB Chain.
Transactions on the Venus V4 protocol require BNB Chain fees, which depend on network congestion and the complexity of the transaction.
No platform can be considered entirely risk-free. Risks associated with Venus V4 include smart contract risk and liquidation risk. However, every possible step has been taken to minimize these risks, including making the protocol code public and conducting thorough audits.
Venus Protocol focuses on improving three main areas:
- Risk Management: Prioritizing the risk management , Venus introduces new features like Isolated Pools and more sophisticated risk parameters.
- Decentralization: The governance model has been enhanced by introducing fast-track VIPs, role-based access control, and a fine-grained pause mechanism.
- User Experience: The latest version offers an enhanced user interface, a more effective reward system, and isolated lending. Future releases for V4 will feature stable rate borrowing and the Venus Prime Soulbound Token, all aimed at providing a smooth user experience.
The Resilient Price Oracle introduced in Venus V4 fetches prices from multiple sources and validates them, providing a more reliable price indicator and protecting against price manipulations. It supports the integration of new price oracles and allows enabling and disabling price oracles per token.
Isolated Pools are a new feature in Venus V4, designed to overcome the limitations of a single core pool. Each Isolated Pool is an independent collection of assets with custom risk management configurations. This setup allows users to better manage their risk and earn yield, while also preventing failures in one market from impacting others.
In Venus V4, a risk fund is maintained for each pool. A percentage of the protocol's revenue is deposited into this fund, aiming to counterbalance bad debt and prevent potential market insolvencies.
Venus V4 features a new governance model that introduces fast-track Venus Improvement Proposals (VIPs), role-based access control, and a fine-grained pause mechanism. This new model allows for more agile and accurate decision-making, ensuring the protocol remains competitive and secure.