Venus.io is providing a supply / borrow service that is totally decentralized! This is a huge benefit if you want to generate more passive income, stake more, play more … basically, earn more money with BSC. Let’s jump into it!
Note: If you haven’t been through my introduction guide to PancakeSwap and my advanced tips, I highly suggest you to do so :) Also, a read of the “maximizing your passive income” guide can be worth your time :)
In this guide, we will go through Venus.io application, what it is and why is it risky. We will also do a brief summary of what are stable coins, and what can be the strategies associated with venus.io.
Finally, we will go through a step by step guide on how to use it, and how I use it.
Warning: Only invest what you can afford to loose in Cryptocurrencies. Also, Do Your Own Research!
Venus.io — What is it?
Venus.io is a DApp that let you supply and borrow crypto, putting your precious token as “collateral”.
But, what is a “collateral”? A collateral is the “insurance” behind the borrowed asset. For example, if you take a mortgage, your house will be the collateral; If you take a loan for a car, the car will be the collateral, …
What it means is that your supply (say 100 BNB) will give you access to a certain credit amount (60% of your supply => 60BNB equivalent in USD), and will put it as collateral (=if your credit amount reach 100%, then your 100 BNB can be partially, or totally used to repay the credit). It sounds scary, but with some precaution, it’s very useful, and not (as) dangerous (as it seems)!
First, let’s go to the venus.io application and understand what you have in front of you.
The yellow outlines shows boxes that are not that important. The orange highlights shows you the current situation of your account, with the balances for Supply (=what you put into the venus pool) and Borrow (=what you get from venus pool).
The box outlined in red is what you will check the most. It represents your borrow limit, and you never EVER wants this bar to reach 100% (because, if it does, you will be liquidated of your assets).
The bottom right part of the screen is where you can supply, borrow, mint (=get VAI token) & repay your minted token (=put back the minted token).
So why should I use it if it’s so risky?
As you might have already understood, the “total available credit” is a USD representation of your credit, based on your supply:
- If you supply a volatile token (say, BTC or BNB), this indicator will fluctuate quite a lot (depending on the market, your credit amount can go up or down very quickly).
- If you supply a “stable” token (USDT, BUSD, …), this indicator will not change … at all! And, in this case, it basically represents a decent source of passive income + an access to a borrow market that you can use to invest where you need.
When you provide funds in a pool (“supply”), you will be rewarded with a small revenue on your funds (like 5–10% APY), and you will also generate XVS token.
Wait, what are those stable coins?
Stable coins are stable crypto currencies, designed to provide a “safe” option for crypto holders. They’re aligned with a “real” money or asset (such as USD or gold) and are backed by a company providing a 1:1 ratio between a liquidity stock (say, USD in a bank), and the amount of coins emitted (says, USDC).
The 4 majors stable coin are:
- USDT (tether, Bitfinex), not super transparent in term of audit, but the biggest in market cap
- USDC (Coinbase, backed by Circle, Goldman), not fully decentralized, as it can be frozen if government decide that it’s related to money laundering
- Dai (MakerDAO), fully decentralized, even though it uses USDc as “collateral” which brings it back to the same issue related to government.
- BUSD (Paxos & Binance), approved and regulated by NYSDFS (New York Department of Financial Services) with audit conducted monthly to verify amount of money held in banks.
So you can think of stable coins as your way to “cash out” any big profits or margin you can make in the crypto world: those stable are more or less representing the USD in crypto.
Ok, so … what should I do?
Well, multiple strategies are possible, depending on your appetite for risk, on your immediate needs, on what you want to do … Here are some examples:
- Supply stable coin on the platform (BUSD, USDT, …), considering venus.io as a “saving account” for stable liquidities (for instance, when you “cash out” some of your capital gain). You will earn ~6–8% per year, more than what your traditional bank account can offer.
- Supply coin, put as collateral, borrow other coins and use them elsewhere (in real life for real life opportunities, in other markets (pancakeswap, autofarm), in gambling, …). It’s high risk, high reward. Consider keeping your borrow limit ~60% for safe measures.
- Supply stable coin, put as collateral, mint VAI and stake them in the vault. This is a “safe” solution, as your borrow limit will most likely not change (stable coin are stable), allowing you to mint a decent % (you can go up to 80% without risking much) and putting those minted VAI in the vault is also generating XVS token.
Personally, I chose the 3rd option, using BUSD stable coin to “cash out” my profits, and stake them as VAI in venus’ vault, to have:
- XVS token generated because of the VAI put in the vault, and because of the BUSD supplied
- Good passive income based on the APY% of the BUSD supply pool (~8%)
How to do it?
I’m going to demonstrate my current usage (supply BUSD, mint DAI, put DAI in vault), but as stated above, first, be aware of what you’re doing, and second, other strategies can be used depending on your use case.
Go to venus.io and connect your wallet. Once done, go down and click on the “collateral” selector for BUSD (Yes, we are going to supply BUSD, and also put it as the guarantee for borrowing (minting) VAI token). Valid the MetaMask confirmation popup, and the indicator should be ON.
Now, we are going to supply BUSD. For that, click on the “BUSD” logo at the beginning of the same line. Clic on “Enable” in the popup, validate MetaMask confirmation, and then supply (in this example, 500 BUSD).
As you can see, there are multiple useful information in this window:
- Supply APY => the base interest you get from supplying token in Venus
- Distribution APY => the amount of XVS generated for being a supplier
- Borrow Limit => the amount you’re allowed to borrow (60% of your supply)
After clicking on “Supply”, the dashboard will change, revealing all the needed information:
We can see in the orange box our available credit (300$) with the “Borrow limit” at 0, and on the left, the “Supply Balance” at 500.05$, the Net APY at 15.11% (Supply APY + distribution APY).
On the left menu, we have
- “Vote”, where we can harvest our generated XVS,
- “XVS” which is just the summary of information related to the token
- “Market” which is the summary of the market information
- “Vault” where we can stake VAI token to generate more XVS token
Now, let’s Mint some VAI and stake them in Venus’s vault. I will be minting up to 80% of my borrowing limit because BUSD is a stable coin, which means that it’s unlikely to fluctuate and have (bad) impact on my available credit.
Go in the “Mint / Repay VAI” tab and put the amount of VAI you want to mint (this will generate some VAI token and send them in your wallet) then click on “Mint VAI” button to generate them (as usual, confirm the MetaMask transaction).
Note: you can click on “safe max”, which will put 40% of your available credit.
You should see your Borrow limit percentage change, and your VAI in your MetaMask wallet.
Note: If you don’t see your VAI in your wallet, don’t worry, just click on the green “+” above the orange box to add it to your wallet.
Now, click on Vault, click on “enable” and stake your minted VAI tokens. They will start generating XVS token that you can claim on the same page.
Go back in your dashboard, you should see some good surprises :)
First, you should see that your borrow limit is going down on its own! Yes, thanks to the Supply APY, you’re earning BUSD, which makes your initial investment grow (it was 500$, now it’s 500.12$).
Then, your total “Net APY” is now ~53%, because, as you’re staking VAI in the vault, you’re earning XVS, that participates in your Net earning!
If you add to those good points that you’ve provided a stable coin (less likely to fluctuate), you can feel quite confident about this situation!
What’s next & further information
- Come back every day on venus.io to verify that everything is going well, and claim your XVS reward every now and then (don’t forget the tx fees!)
- I used BUSD as the “cash out” stable coin then putting it on Venus.io to have a better “saving account” that my bank can provide :)
- When staking, yield farming, supplying money, check the project, check Twitter, check the Telegram, check the docs, check the white papers, check the community, … Check everything at your disposal to make an enlightened decision.
- The place where I put my money in BSC is where I believe the token will grow, and the project make sense (PancakeSwap = CAKE, Venus.io = XVS, token pair on Pancake = SWGb-BNB).
I hope this guide helped you to better understand what is Venus.io and what you can do with it. If you have any question, feel free to drop me a message.
Clap if you liked it, subs if you loved it!
My BNB Address (if you want to deposit some coins XD): 0x0451864cdd0cb179893EB91057dA7746B5b1973B
My Binance referral link: https://www.binance.com/en/register?ref=RUERPAKG
PancakeSwap: https://pancakeswap.finance/
SWGb project: https://swirgepay.com/
Venus.io: https://venus.io/
