What is VBS?

VBS was implemented in January 2023 as part of the Haven 3.0 tokenomics update.

It stands for Vault Backed Shoring. The phrase implies that you need to back your shoring (offshores & onshores) with funds in your vault.

VBS is a value (a multiplier), which determines the amount of Collateral required in a vault in order to be able to offshore (XHV -> xUSD) or onshore (xUSD -> XHV).

Collateral is referred to as the amount of unlocked XHV in the vault.

What is the purpose of VBS?

In combination with a 21 day unlock time, VBS was designed to:

  • Prevent price manipulation of XHV on exchanges in order to increase XHV inside the vault and to profit from at the expense of XHV holders.
  • Prevent excessive and rapid inflation of XHV by slowing the shoring process.
  • Prevent a death spiral.
  • Protect and preserve the value of Haven’s underlying asset, XHV.

VBS is not meant to re-peg xUSD. However, by protecting XHV, the protocol can recover and this in turn will help xUSD regain its peg.

How is VBS calculated?

VBS is a function of the Market Cap Ratio, and some pre-defined exponentiation formulas, the details of which you can read about here.

Market Cap Ratio

The market cap ratio is a measure of the protocol’s state of health.
The formula for calculating the market cap ratio is:

Total Assets Market Cap is the combined value (in Dollars) of all the xAssets (xUSD, xBTC, xAU, etc.).
XHV Market Cap is the current circulating supply of XHV multiplied by the current price of XHV.

The ratio between these two market caps determines the state of the protocol.
When the market cap of XHV is larger than the Total Assets market cap, the ratio is small, and the protocol is considered to be in healthy state.
When the ratio is high, the protocol is considered to be in a bad state.

If you log into Haven’s Web or Desktop vault, you will see this ratio displayed on a coloured chart, as shown below.

At the time of writing (25 Feb 2023), the ratio is 0.888, which is considered to be bad because at this rate, the value of the VBS is large, and this means you would require a lot of Collateral to convert between XHV and xUSD.

A healthy state is considered to have a ratio of 0.1 or less, where the XHV market cap is at least 10 times the size of the Total Assets market cap. This affirms that all xAssets are safely backed by the underlying asset of our protocol, XHV.

Market Cap Ratio Calculation

To calculate the market cap ratio for yourself, you need to first calculate the market caps of XHV and the Total xAssets.

The quickest way to get the market cap for XHV is to head over to

The Total Assets market cap is slightly trickier to calculate, unless you are able to automate it.
First, you need to get the circulating supply of all assets, apart from XHV:

Next, you need get the current price for each of those assets from the oracle:

Since Haven’s assets have a large degree of atomic units (12), the oracle price is shown to the power of 12. To calculate the asset price, use the following formula:

Once you worked out the market cap of each asset and added them together, you will arrive at the Total Assets market cap. Now you can calculate the market cap ratio using the formula shown above in the Market Cap Ratio section.

VBS Calculation

The value of the market cap ratio can be plugged into our predefined formulas to calculate the VBS.
These formulas are slightly more complex and cannot be covered in this section, but if you’re interested, you can find the calculation in our Haven 3.0 proposal.

NOTE: Onshores and Offshores have different formulas for calculating the VBS.
When you log into Haven’s Web or Desktop vault, the Onshore and Offshore VBS values are displayed just underneath the Market Cap ratio chart:

VBS and the Market Cap Ratio

The relationship between VBS and the Market Cap Ratio is exponential.
As the market cap ratio rises steadily, VBS increases exponentially.

There are three main factors that can contribute to a rise in VBS:

  1. A decrease in the price of XHV.
  2. Too much offshoring, lowering the market cap of XHV (if price doesn’t rise).
  3. Too much onshoring, which can lead to an increase in the sell pressure of XHV and hence a drop in its price.

To see how VBS increases with the market cap ratio, let’s look at the table below, showing a range of market cap ratio values.

A few points to note about the VBS table:

  • Offshores and Onshores use different formulas for calculating the VBS.
  • The minimum VBS for Offshores is 1.
  • The minimum VBS for Onshores is just below 10.
  • VBS is more protective towards Onshores in order to prevent inflating XHV too much, too quickly.
  • Above a ratio of 1, the VBS for offshores & onshores is the same.

Right now, VBS is highly protective against inflation and conversions in general, but this will be revised in the near future, and as the protocol recovers, restrictions will be eased.

You can visualise the exponentiation effect of VBS in the chart below.

How is VBS applied?

VBS is used in conversions between XHV and xUSD (Offshores and Onshores), and its value determines the amount of collateral required for the shoring process.

Offshore example

If you want to offshore 100 XHV and the current VBS has been calculated to be 38, as shown in the example above, you will require 100 x 38 = 3,800 XHV as collateral.

After conversion has been confirmed, both the collateral (3800 XHV) and the 100 XHV that has been converted to xUSD, will be locked for 21 days.

Onshore example

If you want to onshore 100 xUSD and the current VBS has been calculated to be 44, and the price of XHV is $0.65, you will require (100 / 0.65) x 44 = 6,769.23 XHV as collateral.

After conversion has been confirmed, both, the collateral (6,769.23 XHV) and the 153.85 XHV that has been converted from xUSD, will be locked for 21 days.

Will VBS be applied to xAssets?

We are not currently planning to add VBS to xUSD <-> xAssets conversions.

This subject has been discussed extensively in our discord server, so if you would like to voice your opinion on this, please join our server and comment in the “havenomics” channel.

Useful links

Below is a list of some useful links in relation to conversions and VBS.

Haven’s circulating supply for all assets

Oracle prices for all assets


Converting assets

Haven Chain Analysis
This site is currently under construction and when it is ready, it will display charts, market caps, conversion statistics, VBS analysis and more.

VBS Simulator
This simulator was developed by a community member and it allows you to see how VBS works, calculating the amount of collateral required depending on certain market conditions and unlocked funds.

Haven 3.0 Proposal

Previous Converting Assets
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