Proposed Risk Enhancements on Venus Protocol

This post was originally published on Venus Protocol


On 19th May, Venus Protocol encountered a liquidation of over $200 million triggered by a price spike. The price spike rooted from large market orders and expectations on the VRT which allowed traders to supply and borrow higher collateral to buy more XVS. The price volatility activated a ripple effect which resulted in massive liquidations in the XVS market. (For more information, read our report here)

Risk Enhancements

Moving forward, Venus will improvise via the following risk enhancement strategies:

  • Adjusting collateral factors for the assets
  • Introducing supply caps for assets
  • Deploying Venus Grant Program to utilize XVS for system shortfalls

Venus worked in unison with industry leading experts for risk assessment on the Venus Protocol.

In the following weeks, we’ll strengthen our risk controls with the following plans:


VIP-26 Reserve and Collateral Ratio Adjustment

The VIP-26 will allow updates on collateral factors and Reserve Factor based on a thorough risk assessment based on market volume, depth level, market making level and volatility level in every market.

New Collateral Factor Adjustment:

BTC: 80% to 75%

ETH: 80% to 75%

BNB: 80% to 75%

XVS: 80% to 55%

SXP: 80% to 55%

FIL: 60% to 55%

New Reserve Factor Adjustment:

XVS: 20% to 30%

SXP: 20% to 30%

FIL: 20% to 25%

Venus Grant Program (In next 3–4 weeks)

Venus is working on releasing a grant program with a pool of XVS funds that can be used within the ecosystem for any unexpected system downfalls. The detailed plan will:

  1. Finish the development of the Grant program in a week.
  2. Finish the Security Audit in 2–3 weeks
  3. Deploy and vote a new VIP within 5 days to enable the Grant Program and get the needed amount of funding to cover the shortfall. The details will be described in the coming VIP.

In Conclusion

Venus would continue to put across a series of strategies to prevent mass liquidations from panning out again, and to drive its towering growth from the tremendous progress it has achieved in the past months, Venus will further embark upon a series of initiatives this 2021.

Steered by the ingenuity of its diverse community members and the rest of the team, Venus shall continue to have the grit to get past tough times and push through the challenges as being the leading DeFi money market in the entire crypto space.

Stay up-to-date with the latest news from Venus:

Twitter: VenusProtocol




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