Velodrome Finance is a decentralized exchange developed on the Optimism platform . They took both the development idea and the codebase from Solidly, a popular AMM on Fantom with the ve(3,3) model in early 2022. However, Velodrome thinks they have overcome the weaknesses of Solidly and make better use of the ve(3,3) model.
Before developing Velodrome Finance, the team built veDAO, a project that entered the ve(3,3) wars race on Fantom and won first place.
Velodrome Finance's goal is to become a decentralized platform for various financial products, including lending and borrowing, staking of cryptocurrencies… However, Velodrome is currently focusing on developing two products. are AMM and Liquidity Marketplace on Optimism.
According to Velodrome, their AMM product has low slippage, low transaction fees, and deep liquidity, benefiting from the ve(3,3) mechanism in the protocol.
Velodrome AMM supports nearly 90 different currency pairs, providing many options for users when searching for AMM on Optimism.
Velodrome is following Solidly's model, with multiple Pool tokens, each representing the liquidity of a particular project token. Therefore, projects will try to encourage veVELO holders to vote for their Pool, which will increase Pool rewards and attract more liquidity providers.
If there are many liquidity providers, the Pool will have more liquidity, minimizing slippage for traders when trading. This creates a positive loop for both the project, the trader, the veVELO holder, and the Velodrome.
Velodrome Finance focuses on income from transaction fees on its platform, currently the fee is 0.02%, but can be adjusted up to 0.05% depending on the specific situation.
Velodrome Finance combines two DeFi models from Curve Finance (veCRV) and Olympus DAO to create a new ve(3,3) mechanism. The Vote-Escrow Token model helps incentivize long-term holders, while the Staking/Rebasing/Bonding model or the game theory (3,3) helps create attractiveness for users and improves the sustainability of the project. judgment.
Each Pool on Velodrome will have a different veVELO reward rate, and this rate will be decided by voting of veVELO holders. Since transaction fees are 100% reallocated to the veVELOs that have selected that pool, holders will compete against each other to choose the most profitable Pool for themselves and accumulate more veVELOs. This creates a push to motivate users to provide liquidity, which helps increase liquidity and minimize slippage for traders when trading.
Velodrome's new innovation is the integration of a "bribe" mechanism (Bribes) to promote support for pools. Velodrome's team created this mechanism to support projects or individuals that want to attract users' attention. They use their own coins to reward veVELO holders who support their Pool, increasing the rewards and helping that Pool attract more veVELO holders. This also means appreciating that Pool in the eyes of the veVELO holder community.
VELO tokens are distributed according to the following ratio:
VELO tokens are used as rewards for liquidity providers when they participate in a Pool in Velodrome. Meanwhile, the veVELO token is used to manage and vote on the proportion of rewards paid to the liquidity pools on the platform. In addition, veVELO holders are also entitled to transaction fees, redemption fees and even rewards due to increased VELO tokens due to inflation.
60% of the VELO will be distributed to the community, most of which will be unlocked. 24% of VELO will be locked as veVELO and distributed to partners. The remaining 10% of the VELO is distributed to the development team according to the following schedule:
Velodrome has targeted an airdrop program to distribute VELO to various users and protocols to increase decentralization and competition for projects using VELO to increase the liquidity of their Pool.
In which, 60% of the amount of VELO distributed to the community will include the following groups:
The remaining 24% of VELO is distributed to other projects including:
Velodrome Finance will go through the following important development stages:
In 2023, the project is expected to update some new features such as:
Velodrome was founded by an excellent development team with a background from veDAO, a non-profit organization active in the field of Dapp development and blockchain technology. These team members have accumulated valuable experience and knowledge in developing and implementing diverse DeFi projects on various blockchain platforms.
Velodrome does not hold a token sale and does not involve any funds.
The Velodrome project on Optimism has received significant support from the Optimism development team, making it one of the leading decentralized exchanges on Layer 2. In addition, other projects have also contributed to the Optimism. Velodrome. The figure below summarizes the list of project partners.
The Velodrome project is a very notable decentralized exchange on top of Optimism, which has enjoyed much success in providing a better trading experience and lower costs for its users. With its unique architecture and features, along with the support from the Optimism development team and participating projects on this platform, Velodrome has quickly attracted the attention and trust of the community and is considered is one of the most potential projects on Optimism today.
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