The Cronos blockchain has been gaining adoption and TVL in the flourishing Cosmos ecosystem.
Today we take a deep dive into VVS- the top DEX on Cronos and provide an update on an exciting new feature- VVS Staking utility V2.
OVERVIEW
VVS Finance is the first Automated Market Maker (AMM) Decentralized Exchange natively built on top of the Cronos blockchain, and was launched in November 2021. The mantra of the project is “Very Very Simple” DeFi for all.
VVS is designed to be the simplest DeFi platform for users to swap tokens and supply liquidity to earn yields. It's currently the top DEX on Cronos with 98% of trading volume (DefiLlama). 7 day Volume is up 205% which is below the highs of 2021 but trending up nonetheless.
In the Cosmos ecosystem, the Cronos chain takes out top spot with an impressive 52.5% dominance of TVL. After the Luna death spiral in May 2022, it appears that the Cronos chain (Blue) has soaked up a lot of the TVL from Terra classic (Green).
The Cosmos ecosystem is thriving and there has been a huge amount of hype around the recent ATOM 2.0 upgrade announcement. VVS chose to build on tendermint to take advantage of fast finality, EVM compatability, IBC enabled interoperability, security and low transaction fees.
The VVS liquidity pools follow the constant product formula as outlined in the diagram below. Check out their lite paper for more info https://docs.vvs.finance
There are 8 main functions of the protocol
Swap
Liquidity provision
Crystal Farm (stake LP)
Glitter mine (Single stake VVS)
xVVS vault
Initial Gem offering (early access to Cronos tokens)
Analytics
Miner Mole NFTs
(Coming soon- VVS Gotchi)
TOKENOMICS
VVS is the governance token of the protocol and adopts an emission model, where 50 trillion VVS will be produced the first year, halving every year thereafter.
Maximum supply of $VVS is 100 trillion tokens with approximately 50% already released ($50 trillion). Distribution to stakeholders as per below diagram.
ROADMAP
2021 was a bumper year for VVS with their official launch in November and then hitting the huge milestone of $1B TVL in December 2021. They also announced partnerships with Beefy finance, Crypto.com (Miner mole NFT collection) and Tectonic Finance.
While 2022 has been a pretty brutal bear market, the team have continued to ship updates including
Flash LP
xVVS vaults
Boosted farming
NFT staking
Partner NFT staking
Check out this medium article for more info https://medium.com/vvs-finance/vvs-yearly-emission-halving-and-2022-year-review-245864d46214
The xVVS yield bearing governance token has been introduced to help reduce selling pressure and maximise earnings of the protocol. When you stake VVS, you receive xVVS which entitles you to a share of the platform trading fees and also earn some yield.
Currently swap fees on the dex are set at 0.3% and are distributed as follows
⅔ of swap fees (0.2% of swap volume) will be distributed to LPs
⅓ of swap fees (0.1% of swap volume) will be kept as treasury
Gradually the platform will also transform into community voted governance based on the share of xVVS ownership.
However, by far the biggest upgrade of the year has been the release of VVS Staking Utility V2. To boost your farm there are two steps involved
Locking up your xVVS into Vaults- BOOSTED FARMING
Staking your Miner mole NFTS- NFT STAKING (Optional for higher APR)
In order to get boosted yields for your LP farms, you must first deposit xVVS into a vault and then select a lockup period.
The longer period and higher amount you stake, the stronger boost multiplier you get. If you own a VVS miner mole, you can also stake this to a farm and receive a higher boost multiplier from it. Here is a quick example...
Alice - does not lock xVVS or have any Moles
Bob - locks xVVS, but does not have any Moles
Charlie - locks xVVS, and own several Moles
There is also a handy calculator https://vvs.finance/boost-calculator
SUMMARY
Despite the current market headwinds, the Cronos ecosystem is poised to continue growth, adoption and TVL. One of the biggest beneficiaries of this growth will be its top DEX which is VVS finance. The FTX saga has made it apparent that the future is decentralised.
The VVS team have been working hard during the bear and the recent release of VVS Staking Utility V2 is a gamechanger. It will help to reduce sell pressure and incentive long term staking and stability of their LPs.
This thread was prepared as part of a partnership and collaboration between @VVS_finance and @CRE8RDAO
@CRE8RDAOis the world's first (and only?) Web3 content marketing agency DAO.