Velodrome, a decentralized alternate deployed on the Optimism blockchain, is giving Uniswap a run for its cash.
Velodrome’s buying and selling pairs held 4 of the highest ten slots by way of 24-hour quantity on Optimism as of July 26, in line with DEX Screener.
These 4 pairs accounted for $16.88M in quantity prior to now day. That’s good for 39.1% of the $43.21M of quantity generated by these high 10 buying and selling pairs on Optimism, which is a Layer 2 community designed to enhance the transaction velocity and effectivity of Ethereum.
Prime 10 Buying and selling Pairs
Optimism hit $54M in whole 24-hour quantity on July 26. Uniswap leads and accounts for the opposite 60.9% of quantity of the highest 10 buying and selling pairs on the Layer 2.
Nonetheless, Velodrome is displaying stunning power for a undertaking boostrapped with a $150,000 grant, in line with Gabagool.ETH, a member of Info Token, a enterprise studio which incubated a undertaking which might then pivot to turn out to be Velodrome.
So Velodrome’s historical past is a bit complicated, however current outcomes have not too long ago been easy — the DEX is on an upswing. Velodrome’s quantity hit $15M for 3 straight days for the primary time ever from July 18 by way of 20, in line with a Dune Analytics query.
Complete worth locked on the decentralized alternate (DEX) has additionally skyrocketed, spiking to an all-time excessive of $76.2M on July 20 and remaining above $70M since then, in line with one other Dune query.
The VELO token has been on a scorching streak of its personal — it’s up 27.7% to $0.05 prior to now 24-hours and up an eye-popping 544.4% prior to now 30 days, in line with CoinGecko. That’s virtually good for the all-time excessive of $0.06 reached two days after the token went dwell on June 1.
Velodrome originated as a fork of Solidly, the bug-ridden, however modern DEX designed by Yearn Finance founder Andre Cronje.
Velodrome’s key characteristic is that it incentives buying and selling charges, quite than merely offering liquidity. The protocol does this by first rewarding liquidity suppliers with VELO tokens.
These tokens can then be locked, permitting them for use to vote on which swimming pools to direct additional VELO emissions too. Voters will obtain 100% of the charges, and any so-called bribes, of the swimming pools they vote for.
Velodrome’s staff believes that this technique will incentivize essentially the most worthwhile buying and selling pairs to have essentially the most liquidity. “Charges and bribes as incentives will naturally pull voting in the direction of essentially the most helpful pairs for the ecosystem,” says the undertaking’s Medium post outlining its mechanisms and token distribution.
Velodrome has supported the elevated worth of belongings on Optimism as properly. The Layer 2 (L2) is the one answer of its form which has seen its worth locked prior to now seven days among the many high 5 L2s, in line with L2BEAT.
If Velodrome’s success continues, DEX designers and builders will likely take notes as its volume-incentivizing design might affect future iterations of buying and selling protocols.
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