Staking VAI: Harvest Finance vs. Venus Protocol

Staking VAI: Harvest Finance vs. Venus Protocol

By Kuroshio | The Good Things in Life | 24 Apr 2021


With the recent explosion of Defi platforms, all offering multiple options for staking strategies with a huge range of rewards, it may be extremely difficult to sift through them all and choose the one that suits your needs. In particular, all Etherium based platforms have become near to inaccessible to all but a select few whales who are capable of covering the exorbitant fees.

Enter Binance Smart Chain. More and more investors are turning to BSC based platforms as an alternative, and although the price of BNB is liable to keep growing exponentially as it has recently, the average fees remain lower than on ETH (for now). Venus Protocol is one such option, a network built on the BSC offering staking opportunities with fairly attractive returns. But wait, common sense may tell you that staking Venus (XVS) tokens or indeed VAI stablecoins on the platform specifically built around those tokens is the best option, but is it really? With Harvest Finance recently incorporating BSC into their staking pools, and with it multiple BSC based networks, let's compare the two options and see if Harvest offers a better alternative to Venus Protocol.

Why just the two platforms?

Because these are two easy to use, fully decentralized options, both work seamlessly with your Metamask wallet, require no KYC, and allow you to withdraw your funds at any time. In my opinion, any platform that doesn't meet the above basic requirements isn't worth my consideration.

Why VAI?

VAI is described as the first decentralized stable coin, which aims to maintain a peg to the USD by being backed by a decentralized basket of crypto assets. Being a stablecoin, it is relatively resilient to massive market shifts (although not entirely, but if you can accept the minor volatility of a coin like AMPL for instance, VAI is certainly no worse). Staking VAI on Venus provides a reward in XVS, and on Harvest in FARM, both of which in turn can be staked for further rewards providing a steady profit loop. What's more, because the value of VAI can be relatively well predicted, it makes managing your assets that much easier. All that being said, for those of you who don't much care about the fundamentals, if you look at my screenshot of the Harvest Finance page below, you'll see that VAI also happens to offer one of the highest APYs on the platform!

How high the APY?

Venus Protocol offers a variable APY, which fluctuates with the total amount of funds staked. In short, 1250 XVS are 'emitted' every day, and your share of the total VAI pool (currently about 155 million), earns you a proportionate share of those emissions. What this equates to is a current APY of about 19% (this also depends on the price of XVS).

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Harvest Finance on the other hand currently promises a slightly better 20%, this is also variable of course, and the payout is in bFARM tokens. Hence, the price of bFARM will directly affect your APY. Note that these tokens will need to be withdrawn manually, converted to FARM, and then restaked, all of the aforementioned steps requiring...

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FEES!!! What about the FEES?!?!?

The deposit fees on Venus protocol for 50 VAI are currently about $0.50, payable in BNB, paying this amount automatically enables you to withdraw any XVS rewards you have earned up until that point.

On Harvest Finance, the process is slightly more complicated, requiring 4 steps; approving VAI spend limit, depositing VAI, approving bfVAI spend limit, and finally staking bfVAI, with the fees totaling about 0.0015 BNB, or $0.80 total for the same 50 VAI. 

In Conclusion

Both platforms offer reasonable staking opportunities, if fees and an extra few steps don't bother you too much, then perhaps you might gravitate to the higher APY of Harvest Finance, if however you would rather keep things a little more simple and streamlined, and prefer to remain within the Venus ecosystem, I would recommend Venus Protocol.

I hope this post was informative for those looking to earn passive income with their VAI or XVS. As always, thank you for reading, and remember to enjoy the good things in life!

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