The Venus Protocol, a decentralized borrowing, lending, and incomes platform, has formally launched its VIP-129 governance proposal that focuses on migrating the TUSD contract on the BNB Chain.
Venus Protocol migrating TUSD contracts on BNB Chain
The migration behind VIP-129 includes minimizing the present TUSD market and introducing help for the brand new native TUSD contract on Venus.
The goals that the proposal is about to realize embrace deploying a brand new market with a brand new BEP-20-based TUSD contract as the brand new native token. It could start deprecating or minimizing the present market that makes use of the outdated BEP-20 TUSD contract, or TUSD_OLD.
Lastly, efficiently voting and implementing the VIP-129 protocol would enact modifications in Venus’s protocol. All borrowing, supplying, and using of the present TUSD could be briefly suspended for the present TUSD market, and the market could be renamed as TUSDOLD.
Moreover, the distribution of XVS in TUSDOLD could be set to zero, whereas the distribution could be migrated to the brand new TUSD market, and be set at 12.5 XVS per day. XVS is the governance token of the Venus Protocol.
The Legacy vTUSD market will probably be upgraded and renamed Venus TUSDOLD. The reserve consider TUSD outdated could be set to a most (100%), and the collateral issue could be halved (55%).
Safety and value implications
With the brand new market and native TUSD contract, the Gauntlet Community partnered with the Venus protocol by onboarding onto the BNB chain to handle market threat, enhance capital effectivity, and simulate protocol suggestions for Venus.
In keeping with that, the Gaulet Community recommended establishing particular settings till the brand new market has satisfactory liquidity. These embrace a collateral issue of 0%, a reserve issue of 25%, a borrowing cap of 600,000 TUSD, and a provide cap of 1,000,000 TUSD.
To make sure satisfactory safety, integrating the outdated vTUSD and new vTUSD markets could be examined in a simulated setting to confirm performance.
Furthermore, to keep away from the implications of a liquidity scarcity, an preliminary liquidity of 10,000 TUSD will probably be supplied as bootstrap liquidity for the market. This measure would additionally assist to safeguard towards potential assaults on empty swimming pools, which have been noticed in different lending protocols.
Forward of this scheduled migration, TUSD debtors are suggested to repay their TUSDOLD loans to keep away from liquidation.
In the meantime, the Venus Protocol additionally stated Binance, in collaboration with the Tusdio workforce, will quickly launch a TUSD to TUSD_OLD Swap throughout the minimization interval of the TUSD_OLD market on Venus.