Valueverse
  • Screener
  • Research
Valueverse

Token cash-flow data, value mechanics, and API access for research workflows.

Platform

  • Screener
  • Research
  • Sign in
  • Account

Developers

  • API docs
  • API keys

Resources

  • FAQ
  • Methodology
  • Updates

Legal

  • Terms of Use
  • Privacy Policy
© 2026 Valueverse. All rights reserved.Built for token fundamentals, mechanics, and tester APIs.
Sign in
Back to Velodrome Finance
Overview
Mechanism map
Vote-escrow (Velodrome version)
Yield-Incentivized Governance
Yield-Bearing Staking
Velodrome Finance

Velodrome Finance

  • VELO, an ERC-20 token, powers Velodrome Finance on Optimism, enabling low-fee swaps and liquidity provision, with value unlocked by converting to veVELO via locking.
  • Locking VELO into its vote-escrowed (governance) version; veVELO (an ERC-721 NFT), grants voting rights over emission distribution, requiring active participation or delegation to capture governance influence and associated rewards (e.g. bribes).
  • veVELO holders receive dual yield stream benefits, rebases for passive ownership proportional to locked supply, and trading fees plus incentives for active voting, maximizing value through full engagement.

Mechanism map

  • Vote-escrow (Velodrome version)
  • Ungrouped value drivers

Token functions

Vote-escrow (Velodrome version)

Velodrome created this value-capturing mechanism as a version of original Curve vote-escrow. The differences with Curve's veCRV are: (1) dilution protection, offsetting inflation to all veVELO lockers (via rebase) (2) protocol fees are obtainable only for active governance participants (3) all LP fees are distributed to veVELO stakers, accordingly to particular pools they voted for emissions; in turn, LPs receive new VELO token emissions

VELO has a single Value-Capturing Mechanism composed of two OoVs (Future Cashflow and Governance) conditioned on Risk Exposure-activated Conditional Action and one OoV (Future Cashflow) conditioned only on Risk Exposure (veVELO lock-up).

The value-capturing mechanism operates through a dual-track value capture system:

  • First, users lock VELO to veVELO (the lock-up condition)
  • Then, the VELO->veVELO lock-up unlocks two distinct value streams

The first stream requires active participation through voting or delegation to capture both governance benefits over emission distribution and associated rewards from fees and incentives. The second stream automatically generates value through rebases based solely on the locked position, creating a baseline reward for lock-up commitment.

This architecture creates a balanced system that rewards both passive commitment and active protocol participation, while ensuring that maximum value capture requires full engagement with protocol governance.

Yield-Incentivized Governance

The primary function of the VELO token is yield-incentivized governance:

  • The governance rights are only activated after the VELO -> veVELO lock-up.
  • Locked veAERO position enables participation in governance decisions regarding emission distribution and other matters.
  • Active participation in governance is rewarded with protocol fees

This means that token holders can obtain protocol fees under two conditions: (1) locking VELO in veVELO and (2) participating in voting using the veAERO position.

Please note, that veVELO holders receive all trading fees generated by LPs. In turn, LPs receive newly minted VELO tokens according to governance decisions.

Value drivers

Value capture investment profile

Superchain deployment addresses are available here. Optimism deployment addresses, in particular, are available here.

1. THE VOTE-ESCROWED GOVERNANCE (VELODROME IMPLEMENTATION)

The VELO token's value capture implementation follows a structured flow where users interact with multiple protocol components.

  1. The process begins when a user locks their VELO tokens to receive veVELO through the voting escrow contract (in addition to position management and delegation functions), with the ability to redeem these tokens upon lock expiry. Users can then participate in protocol governance by voting through the Voter contract, which interfaces with both gauge and reward systems. These gauges are created by interaction with the corresponding function of the Voter, and the VotingRewardsFactory creates the reward pools for the gauge (one for fees, the other for bribes).
  2. These pools receive fees from gauges and additional incentives from gauge owners. Once the epoch concludes, rewards become claimable via Voter functions ; where the Minter contract notifies reward amounts and mints new VELO tokens as needed, while the RewardsDistributor handles the distribution of rebase rewards to veVELO holders. This creates a comprehensive system that handles both active participation rewards (voting/gauge rewards) and passive benefits (rebases).
  3. As can be observed, mints go to rebases (and LPs of pools based on the voting results), and all fees are distributed to veVELO holders based on their vote allocations. It means that for which pools veVELO position voted, from those pools fees are received.

Transferability Restriction

represents the necessity to lock VELO in vote-escrow contract in order to activate its utility

Represents VELO lock-up for a period of up to 4 years, with a natively enabled permalock feature (in the sense of the ability to automatically extend the lock indefinitely). Voting power is linearly proportional to remaining lock time.

Note, that locking transforms ERC20 VELO tokens into an ERC721 NFT representing a user's locked position.

[7] = ƒ(lock_period, amount_locked, price_at_locking)

  • lock_period — is the length of the lock-up period set up by the user
  • amount_locked — is the amount of tokens locked up by the user
  • price_at_locking — is the price of the locked token position when locking them. It defines the locked value (the upper bound of forfeited value) together with the locked amount

Conditional Action

Represents participation in protocol governance (voting) to acquire governance value (bribes) and receive additional incentive (protocol fees)

Represents participation in protocol governance (voting) to acquire governance value (bribes) and receive additional incentive (protocol fees)

[8] = binary

Governance

represents governance value that originates from influencing VELO emission distribution and emission policy

Represents governance value originating from influencing protocol-wise decisions, first of all VELO emission.

[3] = ƒ([7], [8], user_vote_allocations, emission_distribution)

  • user_vote_allocations — is the allocation of voting power by the user, representing his overall allocation voting strategy
  • emission_distribution — is the resultant distribution of epochal emissions, representing the actual voting outcome

Yield-Bearing Staking

This token function represents the yield originating from the protocol's anti-dilution mechanism (rebase emissions). It ensures that long-term holders maintain their proportional ownership of the protocol.

This yield becomes available immediately after the veVELO token lock-up, with no additional actions required.

  • The mechanism automatically distributes rebase emissions to veVELO holders based on their proportion of the total veVELO supply.
  • The yield generation is calculated by the relationship between the locked veVELO supply and the total VELO supply.

Value drivers

Transferability Restriction

represents the necessity to lock VELO in vote-escrow contract in order to activate its utility

Represents VELO lock-up for a period of up to 4 years, with a natively enabled permalock feature (in the sense of the ability to automatically extend the lock indefinitely). Voting power is linearly proportional to remaining lock time.

Note, that locking transforms ERC20 VELO tokens into an ERC721 NFT representing a user's locked position.

[7] = ƒ(lock_period, amount_locked, price_at_locking)

  • lock_period — is the length of the lock-up period set up by the user
  • amount_locked — is the amount of tokens locked up by the user
  • price_at_locking — is the price of the locked token position when locking them. It defines the locked value (the upper bound of forfeited value) together with the locked amount

Cashflow

represents the yield and protects veVELO from inflationary dilution. It arrives from rebase mechanics and is received proportionally to the amount of veVELO.

Reflects the rebase yield distributed to veVELO holders for inflationary dilution protection. Typically, when an inflationary token is vote-locked, the relative weight of a user's position decays due to inflation. However, VELO uses an integral offset of this risk in the form of emissions (rebases) directed to all veVELO holders.

[22] = ƒ([7], veVELO_supply, VELO_supply, emission_total)

0.5⋅emission_total⋅(veVELO_supplyVELO_supply)30.5 \cdot \text{emission\_total} \cdot \left( \frac{\text{veVELO\_supply}}{\text{VELO\_supply}} \right)^30.5⋅emission_total⋅(VELO_supplyveVELO_supply​)3
  • emission_total — is the total token emission volume
  • veVELO_supply — is the supply of veVELO; that is, the totality of the voting power that determines the size of the locked portion of VELO
  • VELO_supply — is the total supply of VELO. Acts as a normalising coefficient