Venus BNB/vBNB is a type of vToken, a primary medium to interact with the Venus Protocol. According to the platform’s whitepaper, Venus Protocol seeks to be a completely decentralized finance-based lending and credit crypto market using money market protocols. The money market entails the buying and selling of huge quantities of very short-term debt products such as overnight reserves or commercial paper.
The protocol also utilizes the innovative Binance Smart Chain (BSC) network for fast and low-cost transactions. The platform seeks to create a secure lending environment for the network lenders and borrowers. The lenders are paid a compounded yield rate annually (APY) per block. The borrowers, on the other hand, pay interest on the borrowed cryptocurrency. The yield rates on the borrowed cryptocurrencies are determined through the demand of a specific market.
Venus Protocol has the ability to borrow assets with the collateral supplied by lenders existing money market protocols. The platform also allows minting synthetic stablecoins backed by various cryptocurrencies enabling users to experience a vast network of wrapped tokens and liquidity. The wrapped token is a token fixed to a specific cryptocurrency that still has the ability to operate on a different blockchain.
Venus Protocol supports various assets that are integrated through a vToken contract. The platform’s vToken contract currently supports two types of tokens: i) vBEP20 and ii) vBNB. Where the vBEP20 token wraps a BEP-20 (token standard on BSC) token, the vBNB token wraps an underlying BNB token. If users want to mint, redeem, borrow, repay a borrow, liquidate a borrow, or transfer vTokens, they need to go through the vToken contract. The users can also mint vTokens (vBEP20 and vBNB) in order to earn yield through the vToken exchange rate and, also, to gain the right to use vTokens as collateral.
vBNB is a protocol-generated pegged asset when collateral is supplied. vBNB tokens can be generated and deployed via the platform’s governance processes. Venus Protocol has a governance token called XVS. XVS token is designed to be a fair launch cryptocurrency and can only be earned by providing liquidity to the platform or Binance LaunchPool project.
