Venus Finance is a decentralized finance application running on the BINANCE Smart Chain, offering users an algorithmic-based money market system to utilize cryptocurrencies. Importantly, Venus uses a BEP20 standard token for its stablecoin VAI and BEP20 is essentially the same as Ethereum’s ERC20 standard.
The difference between Venus and other money market protocols is the ability to use the collateral supplied to the market not only to borrow other assets but also to mint stablecoins. These are synthetic stablecoins with over-collateralized positions that protect the protocol, and they named these coins VAI. Basically, every VAI has a one-dollar value.
Users can mint VAIby using the vTokens created from the underlying collateral supplied to the protocol. Interestingly, users can also borrow up to 50% of the remaining collateral value they have on the protocol from their vTokens to mint VAI.
How to use Venus
At this point, it is essential to understand that a blockchain wallet is required to interact with Binance Smart Chain and Venus. Furthermore, any users familiar with the user design of Uniswap or Compound will instantly feel at home on Venus.
- Make sure you have either Binance Smart Chain wallet or Metamask installed.
- When using Metamask, configure Metamask using the steps described in the video below.
- When configured, double-check that you’re interacting with Binance Smart Chain before connecting the wallet to the application.
One of the key features of Venus allows users to take already held stablecoins such as Tether or USDC and lock those up to earn an interest rate. For example, locking up Tether would give 15.7% APY at the current rate. Furthermore, once tokens are locked up in Venus access to liquidity becomes available in much the same way as the Ethereum dapp Compound.
This has become a popular decentralized finance mechanic. In the same way as other DeFi dapps, Venus rewards users for locking up funds in the platform and also provides favorable lending opportunities for stakeholders further incentivizing usage and loyalty.
For a more detailed walkthrough using Venus and its core features for the first time check out the video below.