Binance unveils a new ‘decentralized’ stablecoin system, Venus

Stablecoins • September 28, 2020, 8:55AM EDT

Crypto exchange Binance has unveiled a new “decentralized” stablecoin system called Venus.

The system is built on the Binance Smart Chain and will mint the decentralized stablecoin called VAI, backed by a basket of various BEP-20 tokens (BEP-20 is Binance's token standard). The Venus protocol can be seen as a mixture of MakerDAO and Compound, said Binance CEO Changpeng “CZ” Zhao.

"VAI is minted by the same collateral that is supplied to the protocol. Users can borrow up to 50% of the remaining collateral value they have on the protocol from their vTokens to mint VAI," said Binance. "The collateral provided to Venus will be represented by vTokens (such as vBTC) which will enable users to redeem the underlying collateral as well as to borrow against it."

Using the Venus protocol, users will also be able to stake their Binance coin (BNB), Binance stablecoin (BUSD), and Swipe (SXP) tokens into separate pools to farm Venus (XVS) tokens, beginning Tuesday. Binance will then list XVS into the Innovation Zone on October 6 and open trading for XVS/BTC, XVS/BNB, XVS/BUSD, and XVS/USDT pairs.

The protocol is developed by Swipe Wallet, which Binance acquired earlier this year for an undisclosed amount. Binance said the protocol removes “current pain-points” of Ethereum, such as network congestion and high transaction fees, as it is built on the Binance Smart Chain.

Binance first revealed a project called Venus last August. At the time, Binance said Venus would be a "regional version of Libra."

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.