1. Valuation Analysis
By comparing the market value to the total locked value (TVL), the ratio of $XVS (0.062) is significantly lower than other major lending protocols such as Compound (0.18) and Aave (0.19), indicating that its current price is undervalued.
2. Investment Value
Given its undervalued status, active protocol development, and leading position on the BSC chain, $XVS has investment value, but attention should be paid to the volatility of the crypto market.
3. Detailed Analysis Report
$XVS is the governance token of the Venus protocol, operating on the Binance Smart Chain (BSC). The Venus protocol is a decentralized finance (DeFi) lending platform that allows users to lend, borrow, and earn interest on crypto assets. The following is a detailed analysis of whether the current price of $XVS is undervalued or overvalued and its investment value.
(1) Background Information
The Venus protocol was launched in 2020, based on the frameworks of Compound and MakerDAO, aiming to provide an efficient and low-cost lending market. It supports various crypto assets as collateral and allows users to mint the synthetic stablecoin VAI. The $XVS token is used for governance, allowing holders to participate in voting and potentially earn rewards through staking.
(2) Current Price and Market Data
According to the latest data, the current price of $XVS is approximately $7.21.
Market value (based on circulating supply of 16,576,053 XVS) is approximately $119.46 million (calculation: 16,576,053 × 7.21 ≈ $119,463,342).
The 24-hour trading volume is $6.13 million, showing an increase in recent market activity.
Metric values Current Price $7.21 Circulating Supply 16,576,053 XVS Market Value $119.46 million 24-hour Trading Volume $6.13 million
(3) Valuation Analysis: Market Value to TVL Ratio
To assess whether $XVS is undervalued or overvalued, we compare the ratio of market value to total locked value (TVL). TVL reflects the total value of assets locked in the protocol, indicating its scale of use. According to the latest data, Venus's current TVL is approximately $1.927 billion.
Calculating the ratio of market value to TVL:
Ratio = Market Value / TVL = $119.46 million / $1.927 billion ≈ 0.062
Comparison with similar protocols:
Compound: Market value approximately $500 million, TVL approximately $2.779 billion, ratio approximately 0.18.
Aave: Market value approximately $3.84 billion, TVL approximately $20.5 billion, ratio approximately 0.19.
Protocol Market Value (in millions) TVL (in millions) Market Value / TVL Ratio Venus 119.46 1927 0.062 Compound 527.79 0.18 Aave 38.42 2050 0.19
The ratio of Venus (0.062) is significantly lower than that of Compound and Aave, indicating that its market value is relatively lower compared to its TVL and may be undervalued.
(4) Historical Prices and Trends
$XVS's historical price shows it reached an all-time high of $147.02 in May 2021, and the current price of $7.21 is only about 4.9% of its peak (calculation: 7.21 / 147.02 ≈ 0.049), indicating a significant decline. However, its recent 7-day price increased by about 4.97%, suggesting potential signs of recovery.
(5) Protocol Performance and Development
The historical TVL of the Venus protocol on BSC shows it once reached $3.54 billion (in February 2021), but is currently at $1.927 billion, indicating a certain decline. However, it remains the leading lending protocol on BSC, accounting for approximately 84% of the lending TVL.
Recent developments include:
Venus V2 Upgrade (April 2021): Introduction of VAI minting fees and higher liquidation penalties.
Venus Prime Program: Encouraging long-term staking for additional earnings.
These upgrades demonstrate that the protocol is still actively developing.
(6) Competition and Risks
There are other lending protocols on BSC such as Cream Finance, Lendefi, and EasyFi, but Venus maintains its lead. However, BSC is controlled by Binance, which may face centralization risks and regulatory issues.
(7) Rewards and Governance of $XVS
$XVS holders can participate in governance and earn rewards through staking. For example:
35% of daily $XVS rewards are allocated to borrowers;
35% to suppliers;
30% to VAI minters.
The Venus Prime program further incentivizes long-term staking, enhancing the utility of $XVS.
(8) Investment Value Assessment
Given that $XVS is undervalued (market value / TVL ratio 0.062 is lower than comparable protocols), its investment value is high. The active development of the protocol and its leading position on BSC support its growth potential. However, attention should be paid to the volatility of the crypto market and the centralization risks of BSC.
4. Conclusion
In summary, based on the analysis above, $XVS's current price of approximately $7.21 is undervalued and has investment value, particularly suitable for investors seeking growth potential.
