What is Velodrome Finance (VELO)?

Deep Dive

1. Liquidity Infrastructure

Velodrome acts as the primary liquidity layer for the Optimism Superchain—a network of Ethereum Layer 2 chains like OP Mainnet, Celo, and Mode. It allows protocols to bootstrap liquidity efficiently through its AMM design, which merges Curve’s stablecoin efficiency, Uniswap’s flexibility, and Convex’s incentive mechanisms. Liquidity providers earn fees and emissions, while protocols attract votes from veVELO holders to direct rewards to their pools (Velodrome Finance).

2. Governance & Tokenomics

VELO employs the ve(3,3) model pioneered by Andre Cronje’s Solidly. Users lock VELO tokens to receive veVELO NFTs, granting voting power over emissions and a share of protocol fees. Over 55% of VELO’s supply is locked (average 3.6 years), reducing circulating supply and aligning long-term participation (VelodromeFi). The token also supports USDV, a stablecoin collateralized by VELO and real-world assets like BlackRock’s BUIDL.

3. Cross-Chain Swaps

In July 2025, Velodrome launched SuperSwaps, enabling native cross-chain swaps across Superchain networks without bridges or wrapped tokens. Built with Hyperlane, this feature aggregates liquidity from Velodrome’s deployments on chains like Unichain and Celo, streamlining multi-chain DeFi interactions (The Block).

Conclusion

Velodrome is a governance-centric DEX optimizing liquidity provision and cross-chain interoperability within the Optimism ecosystem. Its ve(3,3) model and SuperSwaps highlight its role in balancing capital efficiency with decentralized control. As the Superchain expands, can Velodrome sustain its dominance against rivals like Aerodrome on Base?