🎇 Definition

What Is Velodrome?

Velodrome is an AMM designed as the central trading and liquidity marketplace on Optimism Network. Building on top of the groundwork laid out by Solidly, it is the next evolution of theSolidly Exchange model introduced by Andrew Cronje.

As an AMM adapted from Solidly, Velodrome shares certain features with AMMs like Uniswap, with certain modifications:

• a trading fee of 0.02%
• near-zero slippage on uncorrelated or tightly correlated digital assets
• route trades through stable and volatile asset pairs
• no-upkeep, flashloan-proof, 30-minute time-weighted average price (TWAP) with direct quoting support

What Is VELO Token?

Velodrome uses two tokens to manage its utility and governance:

• $VELO — ERC-20 utility token of the protocol
• $veVELO — ERC-721 governance token in the form of an NFT (non-fungible token)

The protocol’s native token, VELO, has a weekly emission that is distributed to liquidity providers. It can be locked for veVELO, which has voting power over what liquidity pools receive the weekly emissions.

The lock period can be up to 4 years with the following relationship:

• 100 $VELO locked for 4 years will become 100 $veVELO
• 100 $VELO locked for 1 year will become 25 $veVELO

The longer the vesting time, the higher the voting power (voting weight), and the rewards the $veVELO holder receives.

Voters receive the trading fees and bribes collected from the liquidity pools they vote for, as well as an anti-dilutive rebase.

> Recource: [1] & [2]

🛣️ Path

• In this analysis, we are going to have a deep analysis of Optimism’s Velodrome AMM and find out how healthy is this project, in several different aspects
• For the seak for health, we will analyze the Velodrome Gas Fee Generation, Users, Swaps, VELO token, LP Actions, Locks, and Votes
• In the gas fee generation part, we will see its fee generation over time and its share of optimism total generated fee
• On users’ part, we will see the growth of users on Velodrome and will see are newcomers still visit the platform or not
• On the swaps part, we will dive deep into its swaps over time
• In the VELO token part, we will see the price and swaps activities on the VELO token to find out how functional it is
• In the last three-part, named LP actions, locks, and votes, we will analyze these different activities on the Velodrome platform to find out if any sign of health or unhealthy

⚙️Method

• For Gas Fee Generation & Users, The main tables that were used for this analysis were optimism.core.fact_transactions and optimism.core.fact_hourly_token_prices

• For Swaps, we used optimism.velodrome.ez_swaps

• For VELO token, we used optimism.velodrome.ez_swapsand optimism.core.fact_hourly_token_prices

• For LP Actions, we used optimism.velodrome.ez_lp_actions

• For Locks, we used optimism.velodrome.ez_velo_locks

• For Votes, we used ooptimism.velodrome.ez_votes

• For finding velodrome TXs in calculating its generated fees, we looked at all optimism.velodrome.* tables

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1️⃣ Gas Fee Generation

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2️⃣ Users

✅ Conclusion

In this analysis, we went through a deep dive into Optimism’s Velodrome health, and here are our findings:

• From the start of the Velodrome launch, ~14% of Optimism all generated fees came from Velodrome, which was ~730K $USD
• Considering daily fee generation and its share on Optimism all generated fees, Velodrome is in a healthy state in terms of Gas Fee Generation 💚💚
• Looking at the new unique users, we can see an uptrend and very good growth for Velodrome users over time, which reached ~135K users that used different parts of the platforms
• Considering the daily growth of users over time and its uptrend, Velodrome is in a healthy state in terms of Users 💚💚
• The average swap volume is in its regular shape these days
• Considering the swaps count and volume, Velodrome is in a healthy state in terms of Swaps💚, not in its best shape in volume in comparison with Jul-Aug
• Considering the VELO price and swaps count and volume, Velodrome is in a healthy state in terms of VELO Token💚, considering the crypto market situation
• The last days of Jul and the first days of Aug were the best days for the Velodrome LP deposits and withdrawals USD volume
• Considering the LP actions, Velodrome is in a healthy state in terms of LP Actions💚
• Most of the users locked most of the locked tokens for a 4 years period
• Considering the lock pattern and its long duration, Velodrome is in a healthy state in terms of Token Locks💚💚
• On Aug 4, the net of total voted amount dropped significantly, but after that, we can see a steady growth for it over time
• Considering the votes uptrend and total votes amount net growth, Velodrome is in a healthy state in terms of Votes💚💚

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6️⃣ Token Locks

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5️⃣ LP Actions

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3️⃣ Swaps

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4️⃣ VELO Token

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7️⃣ Votes

✨ Highlights

• From mi-Jul to mid-Sep we can see an increase in Velodrome's share of total Optimism generated fee to became around 25%, and after that, it felt around 15% again
• From the start of the Velodrome launch, ~14% of Optimism all generated fees came from Velodrome, which was ~730K $USD
• Looking at daily fee generation, we can see a steady after late-Jul and a spike on Nov 8
• 💚💚 Considering daily fee generation and its share on Optimism all generated fees, Velodrome is in a healthy state in terms of Gas Fee Generation 💚💚

✨ Highlights

• From July, we can see an uptrend in the unique number of daily users on Velodrome
• Looking at the new unique users, we can see an uptrend and very good growth for Velodrome users over time, which reached ~135K users that used different parts of the platforms
• Aug 16 had a high number of new users for Velodrome
• 💚💚 Considering the daily growth of users over time and its uptrend, Velodrome is in a healthy state in terms of Users 💚💚

✨ Highlights

• There is a steady pattern for the amount of votes and unvotes
• On Aug 4, the net of total voted amount dropped significantly, but after that, we can see a steady growth for it over time
• There is a little uptrend for the number of votes, unvotes, voters, and unvoters over time
• 💚💚 Considering the votes uptrend and total votes amount net growth, Velodrome is in a healthy state in terms of Votes💚💚

✨ Highlights

• There is a steady pattern for the number of locks, lockers, and average lock days
• Most of the users locked most of the locked tokens for a 4 years period
• There is stable growth in the total locked VELO
• 💚💚 Considering the lock pattern and its long duration, Velodrome is in a healthy state in terms of Token Locks💚💚

✨ Highlights

• An Uptrend from July To Aug and a downtrend from Aug can be found in the volume of the daily LP deposits and withdrawals
• Looking at the number of deposits, there is an uptrend from Oct
• The last days of Jul and the first days of Aug were the best days for the Velodrome LP deposits and withdrawals USD volume
• A high number of depositors deposited a high number of times on Oct 13 and Aug 30
• 💚 Considering the LP actions, Velodrome is in a healthy state in terms of LP Actions💚, not in its best shape in terms of volume, but in a good situation in terms of the number of users and actions

✨ Highlights

• Looking at VELO price and comparing it with ETH, it follows the overall pattern, but ups and downs percentages are higher
• Looking at VELO swaps, the amount of swaps from and to VELO is almost the same, but in number of swaps from VELO has a ~4% more share
• 💚 Considering the VELO price and swaps count and volume, Velodrome is in a healthy state in terms of VELO Token💚, not in an ideal way, but in a good situation considering the crypto market situation

✨ Highlights

• An Uptrend from July To Aug, a downtrend from Aug to Oct, and another uptrend from Oct to Nov can be found on daily swaps count and volume
• The last days of Jul and the first days of Aug were the best days for the Velodrome swap volume
• The average swap volume is in its regular shape these days
• 💚 Considering the swaps count and volume, Velodrome is in a healthy state in terms of Swaps💚, not in its best shape, but in a good situation in terms of the number of swaps, swaps volume, and the average volume of swaps

👋 Contact

Discord: MoDeFi#8739

Twitter: @Mo_DeFi