Binance Smart Chain (BSC) quickly gained in importance in 2021 as high transaction costs and congestion in the Ethereum (ETH) network prompted smaller investors to look for cheaper alternatives.
One of the best ways to get a return on the BSC is Venus (XVS), an algorithmic money market and synthetic stablecoin protocol that provides a credit and credit solution for the decentralized financial ecosystem (DeFi).
XVS / USDT daily chart. Source: TradingView
Data from Cointelegraph Markets and TradingView show that the price of Venus was catapulted 3,000% in the first two months of the year, from a low of $ 3.20 on January 1 to an all-time high of $ 103 on February 19, before it corrected to $ 35 on March 25th. At the time of writing, the XVS price is trading at $ 98.
Traders aim for a stable return with less risk
When comparing different protocols in blockchain networks, Maker (MKR) and its DAI stablecoin is the main competitor for Venus in the Ethereum network. In addition to depositing collateral for a return, users can also borrow against their collateral by minting the VAI stablecoin, a BEP-20 synthetic token tied to the value of one US dollar.
Users who prefer to keep a significant portion of their portfolio in a stablecoin can purchase VAI and deposit it in the Venus vault for a 19.91% return at the time of writing.
Those who want to get more involved in the community can purchase the XVS token, which represents the governance token for the Venus Protocol and enables token holders to vote on changes to the ecosystem, e.g. B. adding new types of collateral or organizing product improvements.
The list of tokens supported by the protocol continues to grow, with many of the top tokens already available for users to generate income. Currently supported coins are Ethereum, Binance Coin (BNB), Litecoin (LTC), Chainlink (LINK), Polkadot (DOT), XRP and Cardano (ADA).
The returns offered by the protocol average between 4% and 10%, with the income paid out in the same form as the collateral placed. While the amount earned on Venus is lower than many income growing options, users don’t have to worry about inconsistent losses or the value of the log token dropping and erasing their winnings.
Data from Defistation shows that Venus is currently the top-rated DeFi platform on the BSC by total value, with $ 7.8 billion in collateral currently on the log.
Total locked on Venus. Source: Defistation
Compared to DeFi platforms across all blockchain networks, Venus ranks eighth behind Ethereum’s main competitor, Curve, which currently has a TVL value of $ 6.47 billion.
The influx of institutional and retail investors into the cryptocurrency ecosystem has increased in 2021, and this trend is likely to continue for the foreseeable future.
Despite this week’s Berlin upgrade to the Ethereum network, the fees are still high and this leaves the door open for competing chains and protocols looking to expand their user base.
Venus is well positioned to see further growth as people increasingly flee the old financial system for higher returns and effortless capital mobility.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading step is associated with risks. You should do your own research when making a decision.