“Very, Very Simple DeFi trading for all!”
The platform prides itself as a one-stop venue for users to swap tokens and earn high yields with ease. It is a decentralized exchange (DEX) that uses automated market-making (AMM) built natively on the Cronos chain. However, there’s more to VVS Finance, as the platform strives to become your default gateway to the decentralized finance movement.
In this guide:
- What is VVS Finance?
- How does VVS Finance work?
- What makes VVS Finance unique?
- $VVS tokenomics
- Is VVS Finance a good investment?
- Frequently asked questions
What is VVS Finance?
As an AMM DEX, VVS Finance facilitates trading without requiring any middlemen or order books. It deploys a smart contract that leverages liquidity/assets provided by Liquidity Providers. As of July 2022, its daily trading volume hovers around $7 million.
The platform focuses on enabling users to easily swap tokens and earn yields “while having fun.” And yes, VVS Finance does indeed emphasize on the “fun” part to make DeFi easily accessible to even those users with little or no prior exposure to blockchain and cryptocurrencies. Through gamification and an easy-to-use interface, it aims to offer a novel user experience that appeals to users of all expertise and experience levels.
In addition to liquidity pools and staking opportunities, the platform also enables users to discover new projects with its initial gem offering (IGO) program (details below).
Built on the Cronos Chain
You may identify Crypto.com as an exchange and a wallet app that has been spending generously on marketing with high-profile advertising campaigns starring the likes of Matt Damon and LeBron James, among others.
However, unbeknownst to many, it is also the company behind Cronos, an EVM-compatible blockchain known for its low fees and high speed. Shortly after its launch in Nov. 2021, Cronos became a smashing hit in the DeFi space, with $4 billion in total value locked (TVL) by April 2022. Nearly 60% of the TVL at the time came via VVS Finance.
Even now, when the ongoing bear market has seen the TVL in Cronos dropping massively to just around $1.25 billion, VVS Finance continues to contribute more than 50% to that figure.
The team behind VVS Finance
Not much is known about the VVS Finance team except that they
- Like to call themselves the “Craftsman.”
- Come from a “deep product design background.”
- Want to bring the best DeFi protocols to the masses.
The anonymity aspect aside, VVS Finance has managed to forge several high-value alliances with important strategic partners, including the Crypto.org and Crypto.com ecosystems. It was also a part of the Particle B Incubation program which focuses on up-and-coming DeFi projects.
How does VVS Finance work?
VVS Finance focuses mainly on proven and audited protocols. It also offers a pretty rewarding inventive program powered by the VVS Finance token ($VVS), the project’s native asset.
The DEX features liquidity pools, with each pool consisting of a pair of tokens. Liquidity Providers deposit tokens into the pool, while traders swap between the tokens.
The protocol is based on a constant product formula. To elaborate, the product of the quantities of both tokens in a pool remains the same after a swap is executed. And the price slippage from the swap may vary depending on the overall quantity and ratio of the tokens in the pool.
The following infographic from the project’s litepaper paints a pretty clear picture of the underlying mechanism powering the DEX.
The underlying mechanisms are configured such that different stakeholders can benefit in multiple ways. For example:
- Liquidity Providers: Two-thirds of the swap fees collected from a pool are distributed among the liquidity providers. On top of that, those staking eligible LP tokens in the “Crystal Farm” category will receive additional rewards in $VVS.
- $VVS stakers: You could also stake $VVS in “Glitter Mine” to earn $VVS or partner tokens as rewards.
- Trading incentives: Traders also stand a chance to earn sizable rewards by simply swapping tokens.
- Referral rewards: VVS Finance has its own referral program that incentivizes users to invite new users to trade on the platform.
What makes VVS Finance unique?
In short, features like Bling Swap and Glitter Mining help the platform offer a unique flavor to users. Some of its key features include:
This feature allows users to instantly swap tokens for a tiny fee (as opposed to what most of us are used to with centralized exchanges with traditional order books). Users pay a trading fee of 0.3%, which then goes to liquidity providers and the platform.
Any user on the VVS platform can opt to become a Liquidity Provider (LP). In return, they earn 2/3rd of the swap fees in that pool (in proportion to the volume of tokens they provided).
With Crystal Farming, LP token holders can earn even more in rewards by simply staking their tokens. The rewards are usually a lot higher than what we normally see in traditional centralized yield accounts. Currently, this feature supports the following pools:
- CRO – BTC
- CRO – ETH
It is worth noting here that the high rewards from crystal mining will remain available only for a limited period. The VVS team has explained that it will be distributing a fixed portion of newly minted $VVS among early adopters and pioneers during the early stages of the project. With time, however, as the VVS ecosystem matures, the rewards will gradually decrease and be available to a wider user base.
This is a rather simple feature and allows users to simply stake and earn rewards. There are three ways to go about Glitter Mining:
- Auto VVS, which automatically compounds the $VVS you stake, so you earn even more $VVS.
- Manual VVS, where you will require manually harvesting your rewards and compounding them back into the mine.
- Partnered Mines, where you need to stake the xVVS governance token and earn tokens of VVS Finance’s partners within the mine opening period. Note that you will have to manually harvest your rewards.
Initial Gem Offerings (IGOs)
VVS Finance users get early access to exclusive sales of new tokens from promising projects launching on the Cronos ecosystem. Meanwhile, project owners also get a chance to partner with the VVS platform and launch their project in the leading DEX on Cronos.
Cronos Chain (CRC20) token serves as the platform’s utility, governance, and reward token. Additionally, it can also be used to pay transaction fees on applications built on the Cronos Chain.
The token follows the emission model, per which the VVS Finance team will mint 50 trillion tokens in the first year and halve each year thereafter. This way, a total of (50 ÷ 2 =) 25 trillion tokens will enter circulation in the second year, (25 ÷ 2 =) 12.5 trillion tokens in the third year, and so on.
The distribution of the token is as follows:
- Farms and Liquidity Mining: 30%
- Team: 23%
- Community reserve for future initiatives: 15%
- Maintenance and network security: 13.5%
- Ecosystem development: 13.5%
- Traders and Referrers: 2.5%
- Market Makers: 2.5%
How to buy VVS Finance token
According to CoinMarketCap, you can buy the VVS Finance token from one of the following three exchanges — Crypto.com, VVS Finance, and Bitget (as of July 2022).
However, as the VVS platform matures with time, you can expect more exchanges to follow suit and list $VVS.
So, depending on when you’re reading this, the best way to buy VVS Finance token would be to follow these steps:
- Visit CoinMaretCap.com and search for VVS Finance. You may get two results, one for the exchange and one for the token. Select the token and then tap on the category labeled “Market” (just around the price chart). Here, you will find the updated list of exchanges that lets you buy $VVS. Alongside, you will also see the currencies you can buy with.
- Once the detailed list is at your disposal, choose a reliable platform and a currency pair of your preference. For example, if you want to buy $VVS with USD, choose the pair VVS/USD. At the risk of stating the obvious, it is always safer to buy from an established exchange with a relatively high trading volume and security.
- Go to the platform of your choosing, log in (or sign up), and follow the buying steps applicable to that particular platform.
Is VVS Finance a good investment?
Can high circulating supply be a concern?
For starters, VVS Finance’s tokenomics does raise some questions. It already has a circulating supply of more than 21 trillion VVS tokens; over the next ten years, the total supply of 100 trillion will be reached.
In comparison, other leading DEX tokens have a far limited circulating supply. For example, SushiSwap has a circulating supply of just over 127 million. Similarly, the corresponding figure for the PancakeSwap token is just over 268 million.
So, by and large, $VVS seems to be the only major DEX token that is (relatively) inflationary to such a degree. Although, it does have a maximum total supply of 100 trillion (which the likes of CAKE don’t have despite having certain deflationary mechanisms).
That said, the total supply of a coin/token is not necessarily a reliable indicator of the quality of the underlying project. For perspective, even ETH has an infinite total supply.
Overall, the market cap of $VVS has so far shown a healthy growth rate. In the first couple of months, it rose from $20 million to $170 million, and then all the way to $350+ million in late March/early April.
Even today, at the (possibly) peak of the ongoing bear market, the VVS token price and market cap have been relatively stable. The daily trading volume is also decent.
All factors considered, it is probably safe to say that if VVS Finance can retain its dominant position in the Cronos ecosystem, and if Cronos continues to grow in adoption and activity, $VVS can be marked as a potentially good investment in the medium to long run.
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Frequently asked questions
What does VVS finance do?
VVS Finance is decentralized exchange (DEX) that uses automated market-making (AMM) built natively on the Cronos chain. The platform focuses on enabling users to easily swap tokens and earn yields “while having fun.”
Is VVS finance a good investment?
If VVS Finance can retain its dominant position in the Cronos ecosystem, and if Cronos continues to grow in adoption and activity, $VVS can be marked as a potentially good investment in the medium to long run.
How many VVS Finance tokens are there?
As of July 2022, the circulating supply of VVS Finance token exceeds 21 trillion. That’s roughly 21% of the max supply, which is capped at 100 trillion.
Who is the owner of VVS finance?
VVS Finance is led by an anonymous team.