Velodrome Finance price
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About Velodrome Finance
Disclosures
Velodrome Finance risk
This material is for informational purposes only and is not exhaustive of all risks associated with trading Velodrome Finance. All crypto assets are risky, there are general risks in investing in Velodrome Finance. These include volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk & cyber security risk. This is not intended to provide (i) investment advice or an investment recommendation; (ii) an offer or solicitation to buy, sell, or hold crypto assets; or (iii) financial, accounting, legal or tax advice. Profits may be subject to capital gains tax. You should carefully consider whether trading or holding crypto assets is suitable for you in light of your financial situation. Please review the Risk Summary for additional information.
Investment Risk
The performance of most crypto assets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in crypto assets.
Lack of Protections
Crypto assets are largely unregulated and neither the Financial Services Compensation Scheme (FSCS) nor the Financial Ombudsman Service (FOS) will protect you in the event something goes wrong with your crypto asset investments.
Liquidity Risk
There is no guarantee that investments in crypto assets can be easily sold at any given time.
Complexity
Investments in crypto assets can be complex, making it difficult to understand the risks associated with the investment. You should do your own research before investing. If something sounds too good to be true, it probably is.
Concentration Risk
Don't put all your eggs in one basket. Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on anyone to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
Five questions to ask yourself
- Am I comfortable with the level of risk? Can I afford to lose my money?
- Do I understand the investment and could I get my money out easily?
- Are my investments regulated?
- Am I protected if the investment provider or my adviser goes out of business?
- Should I get financial advice?
DeFi tokens
Decentralised Finance ("DeFi") tokens are crypto assets built on decentralised blockchain technology for financial applications or protocols. Risks linked to DeFi tokens include:
Enterprise Risk
Interactions between multiple DeFi protocols create a situation where a vulnerability or breakdown in one protocol can trigger a cascading effect, affecting other interconnected platforms.
Technology Risk
DeFi protocols frequently depend on external data sources or oracles, and any tampering or inaccuracies in these data streams can result in a lack of trust and reliability in the protocols.
Regulatory Risk
Governments and regulatory bodies around the world can introduce new regulations or ban certain aspects of the cryptocurrency market, affecting its legality and viability, which could affect token liquidity and/or value.
Legal Risk
Certain tokens may be used for operating a decentralised exchange platform which may contain additional risks:
- The platform may allow users to participate who have not been vetted or verified and therefore expose the possibility that users are interacting with sanctioned entities.
- The platform may be accessible in jurisdictions where some or all the exchange activity should be regulated. If a local regulator deemed the platform activity to be in breach of local regulation, they may request cessation or termination of the service which could affect token liquidity and/or value.
Market Risk
Given their novelty, the evolving technology involved and lack traditional asset structure, valuing crypto assets can be very difficult or impossible. This means valuations are determined by demand that is at risk of manipulation in various ways.
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Velodrome Finance FAQ
Velodrome is an AMM and a liquidity protocol native to the Optimism network. Despite being a new protocol, Velodrome is already competing with established platforms like Uniswap in terms of network volume.
While Velodrome is a liquidity provider per se, it comes with a wide range of benefits, including offering low slippage on trading, low crypto swapping fees, and deep liquidity for numerous crypto pairs.
Easily buy Velodrome tokens on the OKX cryptocurrency platform. OKX’s spot trading terminal offers the VELODROME/USDT trading pair.
Dive deeper into Velodrome Finance
Velodrome is an automated market maker (AMM) built atop the Optimism ecosystem. It is recognized for its presence in decentralized finance (DeFi) and is actively traded on both centralized exchanges (CEXs) and decentralized exchanges (DEXs). Velodrome aims to address liquidity concerns in the DeFi space and distinguishes itself with a transparent approach and user-friendly interface.
What is Velodrome
Velodrome, also known as Velodrome Finance, is a liquidity incentivization project designed specifically for protocols operating on the Optimism Layer 2 chain. Its primary objective is to provide users with benefits such as low slippage, reduced swapping fees, and deep liquidity across projects. In essence, Velodrome functions as a DEX within the Optimism ecosystem, offering users a seamless trading experience.
The Velodrome team
The team that created Velodrome Finance is the same one behind veDAO, an initiative centered around Information Tokens and designed to interact with Andre Cronje's Fantom-based Solidly ecosystem. The purpose of veDAO was to extend the reach of Solidly's features to individuals who did not have access to DeFi resources. veDAO then introduced Velodrome, modeling Solidly on Optimism.
How does Velodrome work
Velodrome’s working model involves rewarding governance participants and liquidity providers (LPs) with VELO, the native utility token. Liquidity providers are eligible to receive VELO emissions, similar to vesting incentives, which can be held and converted to veVELO, the governance tokens of Velodrome. This process forms a loop where VELO tokens are used to acquire veVELO tokens, granting voting rights and eventually leading to the collection of “bribes” and trading fees. The inflow of VELO and veVELO tokens ensures a sustained flow of incentives within the ecosystem.
Velodrome expands on Solidly's codebase by tying rewards with thoughtful emissions. This approach promotes openness and transparency within the ecosystem, providing participants with a better understanding of how rewards are allocated and encouraging active engagement in the platform.
Velodrome’s native token: VELO
Velodrome operates with two tokens: the ERC-20 VELO and the ERC-721 token known as veVELO, which functions similarly to non-fungible tokens (NFTs). VELO is specifically designed to reward liquidity providers (LPs), while veVELO serves as the governance token within the ecosystem.
To acquire veVELO and gain voting rights, users can vest their VELO tokens. The longer the locking period for vesting, the greater the corresponding voting power granted to the holder.
VELO tokenomics
VELO, the native token of Velodrome, has an initial supply of 400 million tokens. There is a weekly emission rate of 3.75 percent, equivalent to 15 million tokens per epoch. This is balanced with a 1 percent decline in tokens, much like a token burning mechanism. This built-in burn mechanism helps to mitigate inflation and maintain a controlled token supply, allowing for sustainable growth. Additionally, VeVELO holders receive a rebase value of tokens proportional to the LP emissions.
Velodrome's operational model combines elements from three token economics models, known as Ve(3,3). It incorporates features inspired by Curve, such as low fees, Solidly with its voting-to-trading relationship, and Votium, which includes an in-built "bribe" design. By incorporating these traits, Velodrome creates a unique ecosystem that combines the strengths of different token economic models.
How to stake VELO
To participate in the staking process, users need to have ETH locked on Optimism or in their connected wallet. By bridging ETH to Uniswap V3, users can join specific pools such as VELO-USDC, VELO-OP, and others to provide liquidity and earn passive income.
VELO use cases
Here are some standard use cases of VELO, the native token of Velodrome:
- Rewarding LPs
- A means to vest or vote-escrow and earn governance-focused veVELO tokens
VELO distribution
The VELO distribution model is structured as follows:
- 60 percent of the tokens are allocated to the community.
- 24 percent of the tokens are distributed to DAOs and associated protocols in the form of veNFTs.
- 10 percent of the tokens are allocated to the team as VELO.
- 5 percent of the tokens are designated for the Optimism team in the form of veNFTs.
- 1 percent of the tokens are allocated to the Genesis pool as VELO.
Reasons to watch Velodrome
Velodrome (VELO) is an emerging player in the DeFi space, with a focus on improving upon the Cronje-backed Solidly project. With a total value locked (TVL) of nearly $230 million, Velodrome demonstrates promising potential for growth.
Disclaimer
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