Vector Finance (VTX) TVL hits record high as corner wars switch to Avalanche

The struggle to attract stablecoin liquidity has been a trending topic across the cryptocurrency landscape over the past year, particularly as decentralized finance users have recognized the hefty APY that can be earned from dollar-pegged assets.

While Curve Finance remains the undisputed leader in interest-bearing stablecoin liquidity pools, several new entrants have started to climb the ranks, including Vector Finance (VTX), a protocol that allows Avalanche network users to earn higher returns on their stablecoin to achieve positions.

Data from CoinGecko shows that the price of VTX recently underwent a trend reversal as its price surged 52% from a low of $0.39 on May 1 to an intraday high of $0.60 on May 4.

VTX/USD 2 hour chart. Source: CoinGecko

Here’s a look at the factors that helped reverse VTX price and point to increasing usage of the Vector Finance protocol.

The locked total hits a new high

One sign that suggests increased inflows into Vector Finance is the increase in the protocol’s total locked value (TVL), which hit a new all-time high of $405.15 million on May 4, according to data from Defi Llama. This is notable as it came at a time of widespread weakness in the cryptocurrency market.

Total value locked on Vector Finance. Source: Defi Llama

The increase in TVL is due to the platform incorporating new Trader Joe pools that offer a maximum return of 69.6% on deposits from JOE/USDC liquidity providers.

Vector also offers single staking capabilities on VTX, Platypus Finance, and JOE with returns of 12.8%, 144.9%, and 117%, respectively.

Single staking returns at Vector Finance. Source: Vector Finance

Related: Avalanche (AVAX) loses over 30% in April, but its DeFi footprint leaves room for upside

Vector Finance also supported Frax shares, MIM and UST with returns ranging from 7.3% to 15.1%.

Stablecoin returns on Vector Finance. Source: Vector Finance

USD Coin (USDC) and Tether (USDT) yields range from 5.1% to 8.0%, while packaged DAI (DAI.e) deposits can yield 3.1%.

Vector is also focused on voting rights accumulation within the Platypus and Trader Joe ecosystems by offering returns of 137.3% for xPTP PTP deposits and 129.4% for zJOE JOE deposits.

Vector LP pool returns. Source: Vector Finance

Users who choose to provide liquidity in these pools can earn an additional 136.9% APY on top of the return generated by wagering the individual PTP and JOE tokens on Vector Finance.

Another benefit that attracts liquidity could be the bonus yield of up to 70% for VTX holders who chose to lock their tokens for 16 weeks.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should do your own research when making a decision.