A Guide to Value DeFi (VALUE) – A Plead for Fairness in DeFi
Decentralized finance hit the crypto space as a wrecking ball in 2020. Its rippling effects still wander through the industry today. Some obscure DeFi protocols that failed to make any waves in the beginning are only now coming into the light. One of them is Value DeFi; a project stuck on bringing fairness and true value to this niche of the crypto industry.
Value DeFi is not the first project looking to make decentralized finance easy enough for anyone to make yield farming a suitable source of passive income. However, the protocol has impressed many with the sheer number of innovative features released in its short history so far. At the moment, it stands out as a suite of DeFi services that few investors can ignore.
In this guide to Value DeFi, we dive deep into the project’s working mechanisms, dissect its features, and determine what lies ahead on its exciting roadmap.
What is Value DeFi?
Value DeFi is a platform that plans to provide crypto holders with easy accessibility to the increasing variety of decentralized finance services that it hosts.
As its official website puts it, the protocol aims to “bring fairness, true value, and innovation to Decentralized Finance.”
Value DeFi functions on four fundamental principles that double as goals:
- Making yield farming more accessible for everyone.
- Rewarding stakeholders with responsive, optimized, and advantageous vault strategies and aggregation services.
- Protecting the community funds with the insurance treasury feature
- Providing on-chain voting for governance to the next generation of Value DeFi participants.
Since its release in August 2020, Value DeFi has grown rapidly to offer a wide range of services, including:
- Value Liquid – an automated market-maker built on Ethereum enabling users to create trading pools.
- Farms-as-Service – a solution for other projects to reset their liquidity mining programs.
- Value Vaults – yield-optimizers that allow liquidity providers to maximize their returns.
These are just some of the features designed after the Value DeFi principles. Others are yet to come, as the protocol roadmap reveals. More on that later.
In recent months, the project also struck an important partnership with Chainlink and released vTokens, like vUSD, vBTC, and vDOT, which will enable VALUE holders to engage in cross-chain transactions with their fiat US Dollars, Bitcoins, or Polkadot tokens.
At the time of this writing, Value DeFi had roughly $910 million in total locked value (TLV).
What is the Value DeFi token (VALUE)?
VALUE is the native token of the protocol. It is an ERC-20 token that Value DeFi participants can use for staking, swapping, and farming. It is also a fundamental part of the governance mechanism on the platform, and it should provide holders with increasingly higher powers of decision over the protocol’s future.
At the time of this writing, VALUE was trading for $4.33, and it had a 24-hour trading volume of $10,932,723. While the circulating supply was not available, the maximum supply of VALUE tokens was 6,626,401.
How Value DeFi Works
Value DeFi works as a platform for yield farming and staking crypto assets. The protocol benefits from stamps of approval from big industry auditing names, such as The Arcadia Group and PeckShield, to provide users with maximum security standards.
Value DeFi is not among the Top-10 decentralized finance protocols. In fact, it’s not even in the first Top-50. The project appeared on the DeFi scene in the second half of 2020, when most of the protocols had already cemented their reputations and positions.
Value DeFi is now playing catch-up with more prestigious protocols in the same niche, such as Ren, Harvest Finance, and Yearn Finance. Still, it’s making fast progress with flagship products, such as:
Value Liquid is not the first Value feature to hit the market, but it ended up integrating many early protocol services. It operates as a decentralized exchange (DEX). Users can become liquidity providers (LP) by pouring their crypto assets into it and earn profit from other users’ swaps without moving a finger.
For example, LP’s add VALUE and Ethereum tokens in a VALUE/ETH pool. Other participants on Value Liquid
A Value/DAI pool is available on Liquid; for example, LPs can add Value and DAI from their wallets. Other users who want to swap their assets in this pool have to pay a small fee, which goes to the LPs as a reward.
Providing liquidity to a decentralized exchange pool is not always successful, however. Sometimes, if the tokens lose value, LPs may see the fee paid from their reserves, also known as impermanent loss.
Farms-as-a-Service (FaaS) enables users to provide liquidity and create customized pools quickly and easily. Participants can develop their own tokens and distribute them thanks to easy access and low requirements for creating staking pools.
With FaaS, users do not need the approval of a third-party or middleman to deposit assets and earn rewards in a secure and gas-efficient environment. The pools users create are known as vFarms and enable them to reach audiences through a wide offer of tokens, including ETH, DAI, and USDC.
vSwap is an automated market maker that allows users to swap their assets through easy routing to other exchanges.
This feature is a self-acting market maker for stablecoins that is a ramification of vSwap. Users can choose to back it or not through a Seigniorage form.
On Value DeFi, a vSafe is a high-tech yield aggregator that uses multiple strategies to find the best farms and deposits and provide investors with potentially profitable targets.
This feature is ideal for beginners, who can use the auto-pilot option to increase their underlying asset proportion and value in the long term.
At the beginning of 2021, Value DeFi launched vTokens, a feature that would enable users to peg their tokens to other crypto assets and USD in a decentralized manner and regardless of the origin of the pegged assets.
According to the vTokens whitepaper, users can move vUSD, vBTC, and vDOT across chains. This way, the protocol becomes a bridging platform for exchanges between BTC or DOT and other ERC-20 tokens without relying on a centralized exchange.
At the moment, the vTokens available for Value DeFi participants are vUSD, vBTC, vDOT, and vETH. The vToken technology should be interchangeable enough to support the release of other vTokens in the future.
Also known as seigniorage tokens, these tokens will also be available for the new feature on the Value DeFi roadmap, Value Lending, which should hit the market later this year.
What is the Seigniorage mechanism in Value DeFi?
The Seigniorage mechanism is a highly complex algorithm that calculates the rate of expansion and contraction of a token using the simplest laws of economics.
For example, when a vToken has a higher value than its peg, the protocol expands and mints more of it. As the supply for that specific token increases, the resulting inflation reduces the price and accelerates selling pressure.
When a vToken is worth less than its peg, the protocol contracts, and users can only buy that specific vToken for corresponding coupons. As a result, its price increases, which induces deflation and enhances demand.
Through this feature, participants to the Value DeFi protocol can pledge VALUE tokens to participate in the decision-making process that guides the project on its roadmap.
When they pledge their tokens, users can get up to 14% from the vSafe gains and up to 35% from swaps made on the vSwap.
The best part of the governance process is that users can still use the idle pledged tokens for farming other pools and protocols.
The Bottom Line – A Guide to Value DeFi
Value DeFi may not be the most popular platform for yield farming and token swapping at the moment. Still, it impresses through the rapid launch of consecutive features and services that started less than six months ago and which doesn’t seem to stop any time soon.
The protocol uses innovative technologies to stay true to its creed and bring fairness, true value to decentralized finance. Users do not only get the boost to build new projects and engage in aggressive farming, but they also receive the benefits of operating on a highly secure, thoroughly audited platform.
Value DeFi has a bright future in the decentralized finance space with this kind of progress and stability.