DeFi

What is VVS Finance, the largest project on Crypto.com’s Cronos chain?

Symbiosis

Most individuals know Crypto.com as an trade and pockets app competing with the likes of Kraken and Coinbase with a sequence of high-profile promoting campaigns. These embody commercials that includes Matt Damon, a Superbowl halftime spot with Lebron James, and naming rights to the previous Staples Heart.

Nonetheless, the Singapore-based firm has been doing far more because it launched Cronos, an EVM-compatible blockchain whose DeFi ecosystem has grown steadily to $2.3 billion in TVL because it went reside in November.

TVL
TVL

VVS protocol is the most important venture on the Cronos chain, taking over 59% of its complete TVL as of Feb. 15. It’s already the seventh largest DEX by TVL, presently behind Trader Joe and simply forward of Osmosis.

DEX TVL
DEX TVL

What’s VVS Finance?

VVS Finance is a DEX that gives the standard DeFi capabilities: swaps, liquidity swimming pools, and staking.

It stands for Very, Very Easy Finance, making its UVP clear—the platform goals to simplify DeFi. It does this via gamification and an easy-to-use interface.

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It additionally checks lots of the boxes Footprint recommends you have a look at when assessing the well being of a crypto venture:

  • Substantial preliminary market cap: VVS Finance’s market cap jumped from $20 million to $170 million within the first couple of months since its launch and has largely mirrored the overall market development since then.
  • Cheap buying and selling quantity: VVS Finance’s buying and selling quantity has largely remained between 5% and 20% of its market cap.
  • Worth motion: The worth motion of the protocol’s token VVS is about as risky as you’ll count on from a brand new DEX venture and a brand new chain, however with no suspicious pumps.

So why has the primary AMM on Cronos and a possible contender to be the following SushiSwap or PancakeSwap attracted a lot controversy just lately?

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VVS Finance’s Tokenomics Are Questionable

VVS’s complete circulating provide is 2.2 trillion, and its complete provide is over 36 trillion, which can enhance to 100 trillion over ten years via its emissions schedule.

For comparability, listed below are the main DEX tokens’ circulating provide figures (rounded to 1,000,000).

  • SushiSwap: 127 million SUSHI
  • Uniswap: 632 million UNI
  • Pancakeswap: 268 million CAKE
  • Balancer: 7 million BAL

As the one main DEX token that’s so inflationary (notice that CAKE has no exhausting cap however has deflationary mechanisms to maintain the provision below management), VVS Finance’s tokenomics mannequin is an outlier.

Right here’s some affordable criticism from one self-proclaimed holder, dsx02, on Reddit:

“I held each VVS and TONIC however bought each upon trying on the Tokenomics, they’re actually dangerous 100 Trillion provide of VVS and 500 Trillion of TONIC, to place that in perspective it’s 1000x extra VVS than there may be DOGE and DOGE is already a wildly inflated coin whose worth suffers tremendously for it… they usually plan to emit HALF (50 trillion) in 2022 alone, so yeah i [sic] actually don’t see the way it’s gonna rise in worth in any respect until you simply don’t consider in inflation in any respect.”

However does VVS’s extremely excessive token provide matter to its long-term potential?

Whereas 100 trillion is big, different tokens have considerably increased, and even limitless, provides, together with Ethereum.

Beforehand talked about CAKE has an infinite complete provide.

So, the overall provide will not be the important thing metric of a venture’s high quality, benefits, or disadvantages. What’s necessary is how they are going to be distributed—in keeping with which enterprise mannequin. If there may be an excessive amount of provide circulating however not sufficient utilization (e.g., via staking or burning), it’s going to have an effect on its token worth and intrinsic worth.

If VVS Finance can preserve its high spot within the Cronos ecosystem, and Cronos can proceed to extend its exercise, the venture—being intrinsically tied to the potential of Crypto.com—might be an excellent funding.

What’s Footprint Analytics?

Footprint Analytics is an all-in-one evaluation platform to visualise blockchain information and uncover insights. It cleans and integrates on-chain information so customers of any expertise stage can rapidly begin researching tokens, tasks and protocols. With over a thousand dashboard templates plus a drag-and-drop interface, anybody can construct their very own custom-made charts in minutes. Uncover blockchain information and make investments smarter with Footprint.

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