What is Venus Protocol?
Venus Protocol bills itself as a Decentralized Marketplace for Lenders and Borrowers. You can earn rewards by staking your crypto and collateralize your assets by minting their proprietary synthetic stable coin, VAI. Their application runs on the Binance Smart Chain enabling fast transaction times and low fees.
Venus Protocol Price Prediction 2021
In spite of the ongoing general collapse of the crypto market, there might be reasons for optimism about the Venus Protocol token (XVS) price. We’ll ignore the current market volatility and take a look at the fundamentals – the use case, tokenomics, team members, public profile, and community sentiment.
If you’re thinking of buying the crypto dip, technical analysis can only help so much. We’re in uncharted waters and analyzing past events is speculative, at best. So, is the Venus Protocol a hit or a miss?
Venus Protocol price prediction 2025
Based on the data and arguments laid out above, a price of XVS token in 2025 could be in the $200-$500 range. A long term reasonable estimate: ~$317.41
Venus Protocol price prediction 2030
There are a couple of laws of human progress that prevent us from thinking that Venus will be what its holders expect and hope it to be. Those are first mover advantage and consolidation and subsequent monopoly.
A first-mover advantage can be simply defined as a firm’s ability to be better off than its competitors as a result of being first to market in a new product category.
Monopoly is a situation in which a single company or group owns all or nearly all of the market for a given type of product or service.
Both of the phenomena we mention above speak in favor of other yield farming competitors like YFI, AAVE, Compound etc and we don’t think that will change in the mid- and long-term future.
We are still not sure if Venus Protocol and similar project do have a long-term future and XVS token could be worth ZERO in 2030 as the project might not exist by then. Chances are 50-50 in our eyes for that to happen.
Is Venus Protocol worth investing in?
XVS is a good investment for the short-term when the market is in the BULL run. Usually these types of newer projects do extraordinary well when the overall crypto market is in the green and they outperform other better known projects by a lot. However, make sure to exit them in time as they tend to do get a beating during ranging and bear market cycles.
Why will Venus Protocol succeed?
Because it does propose a valuable service, it already built a name for itself in its niche and suffered no security breaches or other types of compromises (economic, reputational etc). The token itself does provide utility and makes sense which is not the case with many other similar projects.
Why will XVS fail?
Venus might fail because of the fierce competition, dynamic technological field and rocket-speed developments in its niche. Another common reason this type of project fails is team issues – either the team splits or outright abandons the project.
Will Venus reach $100?
That is within the real of possibility, even in the short term period. It could very well reach $100 within a year.
Can Venus reach $1000?
Venus will almost certainly NOT reach $1000 in the foreseeable future, unless we see a face-melting bull run that will see bitcoin at $100k and ETH at $20k.
Fundamentals
Use Case
At first glance, the use case is like a good old-fashioned retail bank. People lend their money to the platform so other people can borrow it. The lender earns a portion of the interest and transaction fees that the borrower pays. The complex tokenomics and minting are to make it perform on a decentralized blockchain and communicate with the rest of Web 3.0.
Again, that was the first glance, but I immediately wondered – What happens if the value of your collateral falls below the value of your loan?
Let’s take a look. When you stake on Venus Protocol, you are allowed to mint their proprietary stable coin, VAI. You may mint up to half the dollar value of your staked assets, but what can you do with your newly minted stable coins? Buy a boat or make some home improvements? Sorry, but VAI is a synthetic stable coin and you can’t spend it on goods or services in the real world.
All you can do with VAI is swap it for another token or ‘Vault’ it (lock it up) to earn interest. So, you choose their recommended safe limit of 40% collateralization, just to be cautious. Then the price of your collateralized asset plummets by 70%, and you now owe more VAI than your collateral is worth in US$.
Once your collateral falls below your loan amount, you face liquidation. You’ll be wiped out. That 70% drop just happened to most altcoins over the last week, including XVS.
This contravenes the first rule of portfolio management. NEVER take out a secured loan against one asset to speculate on another. You can end up losing both. It also breaks my second rule – NEVER use derivatives or leverage to trade crypto.
Venus Protocol looks risky to me. The upside is a yearly percentage, modest in size compared to the potential gains of just holding the token. The downside is the risk of losing everything. Regardless, this article is about the future price of their token, not their platform.
Tokenomics
- Token name XVS
- Current Price $30.16 (+20.10% 24 Hrs)
- Current Market Cap $301,926,218
- Current supply 10,019,817 XVS
- Total supply 30,000,000 XVS
- Rank #125
- Sentiment (24 Hrs) 48%
Demand is created by investors staking their crypto assets and earning their rewards in XVS tokens. As more people borrow and lend, fees will be generated and paid to the community.
Platform governance is controlled entirely by the XVS investor community. XVS tokens buy voting rights, and there was no pre-mined allocation for the founders or technical team. This is good to see as it makes for much less centralized governance.
Team
The Venus Protocol is backed by the Swipe (SXP) project team, consisting of CEO Joselito Lizarondo, COO John Khenneth, and CTO Eric Adolfo. These are all senior guys with years of crypto project experience. Swipe itself is ranked #171 by market cap and also runs on the Binance Smart Chain. I’m not sure which one is their side project, but XVS is currently outranking Swipe in the cryptomarkets.
Public Engagement
The Twitter account has a respectable 106 thousand followers, and Venus Protocol tweets announcements several times per week. It sticks to the important news and announcements and doesn’t hype the XVS token at all. I noticed everything is coordinated and branded professionally.
The Venus blog is active and informative. The CEO, Joselito Lizarondo contributes as a writer, and there are announcements about upgrades, partnerships, and general news. Again, it’s professional and organized.
The industry standard is open-source software, and you can inspect Venus Protocol’s GitHub here. The content means little to most people, but it’s an essential part of any worthy DeFi crypto project.
Community
While researching this article, I have encountered an alarming amount of amateurish YouTube crypto-hyping channels. Venus Protocol seems to be everyone’s latest ticket to the moon. I have to assume that this low-quality shilling is not paid for by Venus Protocol. It’s difficult to tell, but almost none of the videos I watched mentioned the risks – just the upside. This made me nervous.
Reading the latest posts on Reddit, there are stories of people losing their staked coins without notice. One poster was panicking about losing his XVS and still owing VAI. It seems there has been a bloodbath involving people staking and borrowing. This was very revealing and would further put me off getting involved.
Exchanges & Wallet Support
The major exchanges that trade XVS include Binance for non-US residents, HitBTC, or most of the DeFi swap sites, like Pancakeswap, Binance Dex, and Cointiger.
Any wallets compatible with the Binance Smart Chain should handle XVS and any other associated BEP20 tokens. The Binance wallet works well, but I also currently have all my DeFi wallets imported into my Metamask wallet. I have yet to reach an ultimate solution for a DeFi wallet – research is ongoing.
How to Buy XVS
As with any other altcoin, you can either buy it with crypto on an exchange, or you can swap it from a DeFi wallet on PancakeSwap. I could find no way to buy XVS directly with fiat. If I were to acquire some XVS right now, I would use USDT, BNB, or BTC to buy it on the Binance exchange. I could then move it to my Binance DeFi wallet to stake it on the Venus protocol platform.
Market Price Prediction
● Wallet investor
The Wallet Investor algorithm has XVS descending slowly over the next few weeks, mainly due to the current downward trend. The longer-term forecast is for a return to the all-time high by the end of 2021, and a further doubling over the next few years. They are bearish for now but have things turning around in July. From there, the sky is their limit.
● Digital Coin Price
VXS sentiment is high at Digital Coin Price with today’s price being just half of the expected end of year figure. They are less bullish in the longer term, but still have XVS climbing more than 300% over the next 5 years.
Venus Protocol Price Prediction Summary
If I was writing a price prediction article for Venus Protocol (VSX) two weeks ago, it would describe a token at its all-time high. I may have talked about its precipitous journey from $4, when it debuted on Binance in early October 2020. Of how it was reassuringly stable for around 4 months until early February when it soared 2,400% to $102 in three weeks.
I would yarn about the >60% retracement back to $35, and the ensuing moon-shot to its all-time high, close to $150. I’d be secretly regretting not buying any, but I’d be waiting for the price to fall back substantially, before getting in. Well, we’re in luck! The crypto-gods have been kind and blessed us all with a timely 85% drop.
So will I buy some?
The Case For –
XVS was hit much harder than most altcoins, but it tends to recover more aggressively. From a speculative point of view, yes it seems risky, but a potentially very rewarding medium-term trade.
The Case Against –
From an investment point of view, I wouldn’t put my money into a company that’s likely to destroy its customers whenever the crypto market crashes. At this stage of the game, I prefer infrastructure projects to apps.
The Verdict –
I’ll pass on using the Venus Protocol platform, but I might pick up a few XVS and watch it recover. Indeed, I am tempted to swap some of my less badly affect altcoins into XVS to reap the benefits of its projected recovery. After this, I will swap them back.
If I were to stake assets on Venus Protocol, I would tend towards investing stable coins. I would then be more confident about minting VAI as my stake is very unlikely to plummet in value as I earn interest. But why would I hold stable coins when I am trying to invest in a crypto bull market?
Be careful if you do invest or borrow against your crypto on the platform. Venus was supposed to be the Roman goddess of love, not the patron saint of bad ideas.
Read also our other predictions worth looking into this year:
- Uniswap Price Prediction 2021-2025
- Avalanche AVAX price prediction
- Aave Forecast 2021-2025
- Future Forecast For Tron (TRX) Price
- Polkadot (DOT) Price Prediction
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com
