Velodrome launch on Optimism and airdrop details

Velodrome is an AMM designed as the trading and liquidity marketplace on Optimism network, launching on May 31st 2022.

Their mission is to be the liquidity base layer of Optimism, allowing users to trade digital assets in a secure way, with very low fees and low slippage.

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

• 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

It incorporates elements of Curve, Solidly and Votium with ve(3,3) tokenomoics.

Solidly inspired Velodrome

Velodrome was inspired by Solidly, which was designed as a next-gen AMM optimized to facilitate the swapping of both correlated and uncorrelated assets. Similar to Curve, those who lock their tokens are able to vote to steer emissions to desired pools and receive a cut of protocol fee revenue.

However, unlike Curve, where CRV stakers could stake CRV and direct future CRV emissions to non-productive pools which didn't produce fees, Solidly was initially made to focus on incentivizing trading fees rather than passive liquidity.

Vote lockers on Solidly would receive 100% of fees for only the pools they voted for, and this behaviour incentivizes the highest fee-earning pools.

Solidly's launch failed due to many reasons, including bugs, a bad emissions structure that was overly front-loaded and poorly distributed, and more.

Velodrome brings Solidly to Optimism

Velodrome takes some of the best parts of Solidly and brings them to Optimism, while addressing some of the key issues with Solidly.

For instance, it will distribute its native token $VELO to protocols and users aligned with its mission. It has improved bribes and incentives that's similar to Votium, where all fees, bribes and rebases go to $veVELO voters.

Velodrome  launch

Velodrome will go live on May 31st 2022 and users would be able to:

• Swap between tokens
• Deposit LPs
• Lock $VELO for $veVELO
• Deposit bribes
• Vote for pools
• Claim airdrops

Users need to bridge ETH to Optimism and set up Metamask for Optimism.

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 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.

VELO distribution and airdrop

$VELO will be distributed at launch with an airdrop for users and protocols that they believe are likeliest to contribute to their mission.

60% of $VELO tokens will be distributed to the people who have played the biggest role in incubating Velodrome:

• $WEVE holders (27%, 108M $VELO)
• $OP network users (18%, 72M $VELO)
• 3755 $VELO/wallet — Addresses qualified as Repeat Optimism Users
• Cross-chain DeFi users (15%, 60M $VELO):
• 3500 $VELO/wallet — Curve Protocol wallets with a 1450+ days (maximum) $veCRV lock time
• 3000 $VELO/wallet — Convex Protocol lockers of $vlCVX since new lock contract deployment
• 3000 $VELO/wallet — Treasure DAO Genesis Mine $MAGIC stakers for 1- and 3-month periods
• 2000 $VELO/wallet — Platypus Protocol stakers with $vePTP and $PTP balance
• 500 $VELO/wallet — Redacted Cartel participants in genesis Dutch auction who didn't sell their $BTRFLY
• 500 $VELO/wallet — Eminence Finance wallets affected with EMN, eAAVE, eLINK, eYFI, eSNX or eCRV balance

To see if you qualify for the airdrop, check https://velodrome.finance on launch day.

18% of $VELO will be distributed to 10-15 protocols most likely to contribute to Velodrome and Optimism's long-term success while 6% $VELO will be distributed to partner protocols after the launch. 10% of $VELO goes to the team and 5% goes to the Optimism team.

The rest of the 1% will be added to liquidity providers of foundational token pairs to provide better liquidity and user experience from launch day. Genesis pool emissions will be first directed to the $VELO-$USDC pool and will start a few days before the first epoch votes are cast.