Velodrome (VELO)

Velodrome is a DEX and liquidity marketplace on the Optimism layer two (L2).

Basics

• Based in:
• Started in / Announced on:
• Testnet release:
• Mainnet release: 1-6-2022

Audits & Exploits

• Bug bounty program can be found [insert here].
• Scored 81% on DeFi Safety (4-5-2023):

"Velodrome shines in categories like smart contracts, team, security, admin controls, and oracles. Really good transparency on these aspects However, there's room for improvement in documentation and testing. They do not show any software documentation. They mention the code is a fork of Solidly and describe some changes with minimal detail.  Also they have a good test suite, but it is smaller than our standard of 120%.  Still the code is well audited with a good bug bounty.  Overall a strong protocol."

Bugs/Exploits

• From X (8-12-2023):

"Today the @OpenZeppelin team disclosed details about the @thirdweb vulnerabilities to our team. We've identified a few functions in the Relay contracts that could be griefed. As such, we are deactivating Relay until the necessary adjustments can be made. To be absolutely clear, none of these issues put any user funds or veNFTs at risk. None of the core platform is impacted by the vulnerabilities identified. You can withdraw your Relay positions at your leisure. We'll share an update when the new version of Relay is live."

• From Blockthreat:

"On August 4, 2022 A malicious insider stole $350K from Velodrome Finance."

Token

Utility

• From Bankless (3-8-2022):

At the heart of Velodrome is the protocol’s ERC20 utility token, VELO, and its ERC721 governance token, veVELO ⁠— a.k.a. a veNFT.

Technology

• Whitepaper or docs can be found [insert here].
• Code can be viewed [insert here].

Implementations

• Built on: Optimism

How it works

• From Bankless (3-8-2022):

"The project has been described as a combo between leading stable liquidity protocol Curve, Andre Cronje’s infamous Soldily, and Votium (a protocol for earning bribes on Curve/Convex).

1. Curve because Velodrome is similarly designed to offer low fee, low slippage trades and similarly uses a CRV-like vote-escrowed gauge system for facilitating its token emissions.
2. Solidly because Velodrome has adopted Solidly’s innovative use of gauge voting to incentivize trading fees (as opposed to how Curve’s CRV emissions incentivize passive liquidity) and Solidly’s “vote-escrowed NFT,” or veNFT, model.
3. Votium because Velodrome has an in-built bribe system where people or projects can deposit tokens to incentivize gauge votes for their liquidity pools of choice."

Staking

• From Bankless (3-8-2022):

"VELO, like CRV, is emitted on a rolling basis and is used to reward Velodrome’s liquidity providers. Holders can vote-escrow, i.e. lock up, their VELO to receive veVELO and participate in the project’s governance, which entails voting for which liquidity pools should receive VELO rewards.

Like CRV, you’re able to lock your VELO for up to four years, and the longer you lock for, the more voting power you receive.

1. Velodrome liquidity providers earn VELO emissions
2. veVELO holders vote on which liquidity pools receive these VELO rewards, and pools earn in proportion to the voting power they accrue per epoch, i.e. each week
3. veVELO holders then earn from the trading fees generated by the pools they voted for in proportion to their voting power
4. Finally, veVELO holders also earn from the bribes paid out to the pools they voted for, as well as from veVELO rebases which are non-dilutive, meaning veVELO holders receive veVELO from them rather than VELO"

Roadmap

• Can be found [Insert link here].

Usage

• From Bankless (3-8-2022):

"Launched on June 1st, 2022, Velodrome has gone on to amass a +$123M TVL in less than two months and become one of Optimism’s most popular dapps in that span."

Team, Funding and Partners

Team

• Full team can be found [here].

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