The Capital Trap

The Brutal Math

At current rates (665 sVVV/DIEM, $3.77 VVV, $558 DIEM):

You lose $1,949 (78%) by minting. This isn't a small difference — it's a catastrophic capital destruction event.

But You Still Earn Yield, Right?

Yes, but it's not enough. While your VVV is locked minting DIEM, you continue earning 80% of normal staking yield.

Let's calculate:

• 7.6M sVVV locked minting DIEM
• At 30% APY, that's ~2.3M VVV in annual yield
• But you paid a $1,949 premium per DIEM
• Even with yield, you need to hold for 3+ years to break even vs buying

The Re-Acquisition Risk

This is what Venice doesn't emphasize enough:

⚠️ If you sell minted DIEM and the price rises, you must buy back at a higher price to unlock your VVV.

Example:

• You mint 10 DIEM for $25,070 (locking 6,650 VVV)
• You sell the 10 DIEM for $5,580
• DIEM price rises to $800 (43% increase)
• To unlock your 6,650 VVV, you must now pay $8,000 to buy back 10 DIEM
• Net loss: $2,420 even after accounting for the sale proceeds

So Who SHOULD Mint?

Only three groups:

1. Governance Whales (1,000+ DIEM)

You want to lock VVV for governance rights while still having DIEM for API access. The 80% yield + governance power outweighs the premium.

2. Long-Term Holders (3+ Years)

You plan to stake DIEM for API access indefinitely. Over 3+ years, the yield can offset the premium.

3. Arbitrage Bots

You have algorithms that can exploit tiny price discrepancies between minting and buying.

Everyone Else: Just Buy

If you're holding fewer than 100 DIEM, minting is mathematically irrational.

Even at 300 sVVV/DIEM, you save 51% by buying. The only reason to mint is if DIEM supply is so high that mint rate drops below 150.

Until then: Use the calculator to find fair value, then acquire DIEM through your preferred exchange.