Venus Exchange is a decentralized platform. It allows arranging settlements between partners through smart contracts. To make deals, you should use Venus coins (XVS) as the governance token for Venus Protocol. One can buy them from Binance or Pancakeswap and trade on both decentralized and centralized cryptocurrency exchanges.
Binance Smart Chain (BSC) powers this synthetic stable-coin money market. The latter focuses on tokenization, working for those who prefer to convert physical assets into digital ones. It allows lending and borrowing assets against collateral presented via Venus tokens. The Venus Exchange makes it possible to generate VAI stablecoins almost instantly. For this purpose, users should provide no less than 200% collateral for the Venus smart contract. All transactions are made within the Decentralized Finance (DeFi) ecosystem.
Business Activities on Venus Money Market
The lending-borrowing activities are pretty simple. Actually, they have much in common with other similar protocols like, for example, https://letsexchange.io/:
- Both lenders and borrowers should create the Metamask or Binance Chain Wallet.
- Registration on Binance Smart Chain is the next step. Go to venus.io hit launch the app.
- Specify the collateral you’d like to provide. For example, loaning stablecoins is the safest collateral because their price is not fluctuating too much. So, it means that you’ll never get liquidated.
- A lender deposits assets on the Venus platform to get tokens in return, according to the current interest rates.
- A borrower takes assets from a lender and pays interest rates for them to leverage the borrowed money against them and make purchases or participate in similar projects.
Bear in mind that the deal is possible if only the value of collateral on loan (digital assets) is more than the loan value. This approach makes loans’ ratings higher and reduces credit risk for a lender. Besides, you should check the list of available assets. Sixteen cryptocurrencies, including USDC, ETH, FIL, XRP, and BCH, are valid at the time of writing.
Should You Use Venus Crypto Exchange?
Both lenders, borrowers and those minting stablecoins can benefit from the Venus Crypto Exchange. Protected by Binance Smart Chain, the network is integrated with Ethereum Virtual Machine. It means that the money market will be workable even in the case of problems on the Binance Chain.
Binance Smart Chain uses a special consensus algorithm called proof-of-stake authority (POSA) to secure the blockchain. In addition, automatic liquidation measures also work to eliminate lenders’ collateral with a lent value lower than 75%.
So, the Venus Exchange is a healthy and secure marketplace that allows managing and scaling all activities on the platform without much effort. All users can safely aggregate lending, earn interest, and dive into mining. However, the main thing is that no one will hack you and take your funds away here, as it may be possible on a centralized exchange.