What Is Venus?
Venus is a decentralised money market where users can deposit cryptocurrencies to provide liquidity, earn interest on them, and use them as collateral to borrow other cryptocurrencies or mint Venus’ synthetic stablecoin, VAI. This removes intermediaries like banks that could deny a loan or raise interest rates and enables users to meet a range of financial needs all in one place.
While most similar protocols are built on Ethereum and so can be slow and expensive, Venus is scalable as it is built on the Binance Smart Chain (BSC) for secure, fast, and low-cost transactions. Venus also provides lending markets for major coins on other chains, such as Bitcoin, Litecoin, and XRP.
The Venus Token (XVS) is a governance token that controls the system by enabling holders to decide stablecoin parameters such as the max supply, interest rate, and ratio of collateral required. XVS is also used to distribute rewards to Venus users.
Ways to Invest in Venus
Depending on your skills and investment goals, you might decide to purchase Venus for the short term or the long term. It is possible to generate returns from both approaches, so which you opt for will be a matter of preference.
Buy and hold Venus
The buy and hold strategy is the easiest to follow as it involves exactly what you would expect. Hardly any time or effort is required to buy XVS and simply hold onto it so anyone can use this strategy, regardless of skill.
Those who buy and hold XVS believe that its value will appreciate in the long term, leading to a profit when they eventually sell it. XVS can also be staked in Venus’ vault to earn interest.
Best Venus wallets
If you want to ensure that you are the only person who can possibly access your tokens, you should store them in a private wallet. This is popular among long-term investors who want that extra bit of security.
Hardware wallets such as Trezor, BitBox, and Ledger provide the best possible security, though they can be a bit expensive and technical to understand. Software wallets, on the other hand, are free, user-friendly, and can be downloaded onto your computer or mobile.
As the price of XVS is so volatile, traders can also benefit by buying and selling their tokens more frequently to generate profits more often. This will take up more of your time and it is useful to develop skills that will help you find the best times to buy and sell.
Private wallets may be less convenient for traders as they would have to regularly transfer their tokens onto an exchange. Many traders, therefore, opt instead to store their tokens in the free web wallet provided by their exchange.
Should I Buy Venus Now?
Only you can decide how to invest your own money, but it helps to read up on a potential investment first. The maximum supply of XVS is capped, which could make it a good long-term store of value as it won’t be devalued by inflation.
The fact that XVS can be staked to earn interest could drive demand for the token, while its function as a governance token could further incentivise Venus users to buy and hold XVS to get a say in how the protocol is run. It, therefore, seems likely that the value of XVS will correlate with the success of the Venus protocol.
The speed and low cost of BSC already give Venus an edge over Ethereum-based competitors, while its access to assets on other chains and fair distribution of XVS provides a unique value proposition that could see the project continue to thrive in the future.