Venture Capital Auction (VCA) Finally Arrives
Some time ago, Axion announced a number of plans for early 2021, one of which was the arrival of Venture Capital Auction, also known as VCA.
The company said that venture auctions are among its highest priorities in terms of research and development. While it took a bit of time, the launch of VCA has finally arrived, and it will happen in only three days, on March 12th.
The Impact of VCAs
When the announcement about the VCA originally came out, no one knew a lot of details about these auctions. Of course, Axion had its regular auctions, where it sold tokens collected from penalized users, who entered staking only to come out of it too soon or too late. As a result, the project took some of their coins as a penalty for not honoring the deal, sold them in exchange for ETH, which it then used for development and token buybacks.
One thing that was known is that the arrival of VCA will bring two auctions per week, with 1 billion AXN in the auction pool.
Now, as mentioned, Ethereum collected through VCAs will be used differently — not for development or token buybacks, but for investments into Wrapped Bitcoin (wBTC) and one other altcoin that the community was meant to select. These coins will then be used for redistribution to active stakers, which is one of the methods that Axion aimed to encourage long-term staking.
Stakers did not even need to wait for their stake to mature — it was enough to enter staking for a longer period in order to qualify. The announcement inspired many to actually do it, and the number of 15-year stakes skyrocketed soon after that.
What are VCAs?
Venture Capital Auctions, or VCAs, are unique auctions that are going to be implemented on the Axion network in three days. Like regular auctions, the project will sell token collected through penalties in exchange for ETH. 85% of the collected ETH will be used for buying wBTC and another altcoin, while 10% will be sent back to the users who placed bids in the form of wBTC+Altcoin. Lastly, 5% will go to the Axion team.
One thing to note here is that the tokens that stakers will receive will be available for withdrawal instantly. In other words, the project will not initiate a lock-up period where you have to wait a while, or anything like that. It is a reward for stakers, which arrives even before the actual rewards for engaging in staking.
The Best Method to Earn VCA Rewards
In order to get the most out of VCAs, users should maximize their shares count, and this is done by entering staking for as long as users can afford. The longest available period is 5555 days, or slightly over 15 years, which would be ideal, but also not possible for a lot of people.
Axion understands this, but it still encourages all those who can lock up their coins for such a long period to do it, and benefit from both types of rewards. At the time the project published its announcement about VCA, there were around 3,500 stakes with 56 billion AXN out of 264 billion (the project’s total supply) being locked up for the next 15 years.