Venus Protocol pares gains after buyback event doubled XVS token price – what to expect?

venus protocol, Venus Protocol pares gains after buyback event doubled XVS token price – what to expect?

Key Takeaways:

  • The XVS token jumped 100% on April 9 and pared its gains on April 10.
  • What fuelled the rally?
  • Venus Protocol boasts bullish Q1 results, but TVL stalls.

YEREVAN (CoinChapter.com) -Venus Protocol token XVS lost 30% in the previous 24 hours, dropping to $6.5 ahead of the New York session on April 10. Notably, the decline came after XVS doubled in price the previous day, peaking at $9.6, the token’s highest value in a year.

Venus Protocol (XVS) daily price action. Source: TradingView.com
Venus Protocol (XVS) daily price action. Source: TradingView.com

What pushed Venus Protocol?

According to the Venus Protocol’s official Twitter page, the team prepared to execute the Venus Improvement Proposal (VIP-105), including “Quarterly Buyback and Funds Allocation” at 8 pm GMT on April 10.

venus protocol XVS

Venus specified that the Q1 2023 total income from reserves was nearly $1,7 million. The Binance buyback would include 20% of the revenue, or approximately $340000, while 80% “will be sent to the protocol treasury.”

“The Q1 2023 total income from liquidations was: $507,951.00. 26% will be sent to Binance for the buyback: $132,067.26 (in USDT). Total amount to be sent to Binance for Q1 2023 Buyback: $466,508.52.”

specified Venus.

VIP-105 successfully passed the voting stage on April 8, which could have propelled the price.

venus protocol XVS
VIP-105 quarterly buyback and funds allocation. Source: app.venus.io

Also read: Bitcoin Hits $29K But Can It Survive A Crisis: A Look Through BTC History Amid Economic Fallouts.

Venus Protocol metrics bullish

Furthermore, the Venus Protocol revenues increased for the third consecutive quarter, according to a Messari report. The number of daily active users (DAU) also increased year-to-date, recovering to December 2022 levels.

In total, $5.5 billion in loans were originated and repaid in Q1, demonstrating the continued activity on Venus markets. BNB played a significant role, accounting for 74% of the value borrowed. 

detailed the report.

While the average staking annual percentage rate (APR) fell from 18% in 2022 to 10% in April 2023, the daily XVS staked rose from 5 million to 6 million tokens.

venus protocol XVS
Average staking ARP compared to the daily staked balance. Source: Messari.io

According to the report, The drop in APR is due to both a 44% decrease in daily distributions and the staked balance increasing by 352,000 XVS over the quarter. Notably, only 206,000 XVS were released into circulation in Q1.

The mentioned net inflow indicates that users are preparing for an imminent launch of the Venus V4 upgrade, which will “address three key areas: risk management, decentralization, and user experience.” Also, the upgrade aims to supercharge returns on XVS by allowing stakers to receive an additional 20% of the protocol revenue.

Meanwhile, despite the bullish move on the XVS chart, the Venus Protocol’s total value locked (TVL) did not see an improvement in the previous sessions. Instead, the TVL flatlined at approximately $850 million month-to-date, suggesting the price surge was speculative.

venus protocol XVS
Venus Protocol total value locked. Source: DeFillama.com

Also read: US Bank Outflows Hit $1T Ahead of Fed’s Rate Hike Decision.

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