Venus Protocol causes a stir with a proposal to spend 1.7 million USD to reimburse Venus Labs – the core development team, even as the XVS token price continues to plummet. The big question is: Who truly benefits from the project's development results?



Noteworthy reimbursement proposal: 1.7 million USD for Venus Labs.


#VenusProtocol – a lending and synthetic stablecoin platform on BNB Chain – has just made a noteworthy proposal: to reimburse 1.7 million USD to Venus Labs to cover development costs in the second half of 2024.


Although the proposal is currently receiving 100% support on Snapshot, the community still has doubts about the actual impact of this expenditure on the project’s value and especially on the XVS token.


According to the plan, the payment will be allocated as follows:



  • 5% equals $BTC



  • 31% equals $BNB



  • 11% equals $ETH



  • The remaining 53% is in USDT.




#VenusLabs asserts that this money is not only a reward for the hard work over the past year but also a "strategic investment for the future of DeFi." In 2024, this team implemented:



  • 92 improved VIP proposals,



  • expanding to Arbitrum, Base, Optimism, ZKsync networks,



  • developing the 2-Kink interest rate model,



  • upgrading the oracle system,



  • strengthening the risk management framework,



  • preparing thoroughly for the hard fork of BNB Chain.




However, while the team receives almost absolute support, the price of XVS is still plummeting.



XVS price hits bottom – Investors ask: Who is benefiting?


XVS – the governance token of Venus Protocol – is trading at around 4.36 USD, down more than 97% from its historical peak of nearly 146 USD in May 2021.


With a circulating supply of only about 16.6 million tokens and an FDV (Fully Diluted Valuation) of 129.7 million USD, many are starting to doubt: Why is there such vigorous development while the token price remains stagnant?


A user named Obacoin has openly stated on the Venus forum:



"Venus Labs has received many funding sources but has not made clear commitments to increase value for XVS. The performance of XVS is significantly worse than AAVE or similar projects. Without entrepreneurial thinking and realistic growth orientation, all revenue will not benefit the holders."



This person also proposed establishing specific KPIs for development funds, especially criteria related to token growth efficiency – a demand deemed entirely reasonable in the context of the increasingly competitive DeFi market.



Difficulties abound: Hack incidents, bad debts, and restructuring pressures.


Not only facing pressure from the community, Venus Protocol is also suffering consequences from a security incident. In February 2025, the project lost 717,000 USD in an oracle attack on the ZKsync network, leaving a significant bad debt on the books.


However, the development team is not standing still. In the first half of 2025, Venus plans to implement a series of important updates:



  • Limiting oracle to mitigate risks,



  • Launching Risk Stewards – an automated risk management mechanism,



  • Integrating ERC-4626 standard for vTokens,



  • Continuing to expand the multichain,



  • And especially to announce the comprehensive upgrade of Venus V5.



Additionally, the community is also considering reducing XVS emissions – a potential move to alleviate selling pressure and support long-term price growth for this token.



Conclusion: Innovate or fall into old traps?


Although the proposal to reimburse 1.7 million USD to Venus Labs is receiving widespread support, questions about the actual effectiveness for XVS holders remain unanswered. While the development team receives rewards, retail investors are still suffering heavy losses as the token price continually hits new lows.


Venus is at a crucial crossroads: either restructure and optimize capital efficiency to rebuild investor confidence, or continue to be doubted as 'burning money' without creating sustainable value.


In the context of an increasingly competitive and stringent DeFi market, transparency, aligning interests with the community, and practical entrepreneurial thinking will be crucial for Venus Protocol's next journey.



Risk warning: Investing in the cryptocurrency market entails significant risks and high volatility. The content of this article is for informational purposes only and is not investment advice. Please consider carefully and do your own research before making financial decisions.