US Congressman Says He Bought Velodrome Token—What Is That?

In a move sparking curiosity well beyond political circles, U.S. Congressman Mike Collins (R-Georgia) disclosed a recent purchase of $15,000 worth of a cryptocurrency called Velodrome.

The investment thrust Velodrome—a relatively unknown cryptocurrency with a market capitalization of around $150 million—into the spotlight. The project's VELO token is currently trading up about 15% over 24 hours at 0.1169, according to CoinGecko.

Unlike established players like Bitcoin or Ethereum, Velodrome caters to a specific niche within the cryptocurrency world: decentralized finance (DeFi) on layer-2 networks.

What is Velodrome?

Velodrome Finance launched in June 2022, evolving from the Solidly project. Its goal was to support liquidity for DeFi protocols on Layer 2 solutions. The platform uses a “vote escrow” mechanism, blending concepts from Curve Finance and Olympus DAO, designed to encourage long-term holding through staking, rebasing, and bonding.

The goal was to avoid some of the problems common in DeFi, using rewards to balance protocol emissions with fees and avoiding the “farm and dump” scenario. 

Velodrome offers a variety of liquidity pools, with reward rates determined by user voting. This setup aims to drive users towards the most profitable pools, enhancing liquidity and reducing slippage for traders. 

The platform includes both “stable pools” for low-volatility coins and “variable pools” for high-volatility assets, providing a diverse trading environment. Additionally, Velodrome offers bribes to attract support for specific pools.

Velodrome Finance reports that it has undergone security audits and conducts DeFi community engagement through initiatives like veDAO.

The VELO token

The VELO token is central to Velodrome's ecosystem. The initial distribution included 400 million tokens, allocated among community members, partner protocols, the Velodrome team, and the Optimism team.

VELO holders receive transaction fees, bribes, and rebase rewards. 

VELO converts to veVELO when locked, allowing users to vote on pools and influence protocol decisions. 

The Velodrome roadmap

Future plans set out by Velodrome Finance include features like automatic interest accrual, a Uniswap V3-based liquidity feature, metapool integration, and trading, lending, and borrowing of “veNFTs.”

Edited by Ryan Ozawa.