$VELO In-Depth Analysis: Optimism's 'Bribery Empire', A Double-Edged Sword of High Returns and High Risks
Token Mechanism
VELO: Basic circulating token used for paying transaction fees (0.02-0.05%) and liquidity mining rewards.
veVELO: Locking VELO to obtain (1 VELO locked for 4 years = 1 veVELO), includes governance rights and eligibility for bribery (project parties direct bribery in exchange for incentive weight).
Sources of Income
Liquidity Mining:
Provide mainstream LPs such as OP/USDC, earn 0.02% single transaction fee + VELO release (annualized return of 40-80%).
Bribery Earnings:
Holding veVELO automatically receives project party bribes (such as USDC, OP tokens), currently annualized at about 53%.
Governance Arbitrage:
Whales manipulate voting weights, directing incentives to their own LP pools → reaping triple profits.
Five Major Fatal Flaws
⚠️ Unsustainable Bribery:
Bribery annualized has plummeted from a peak of 200% to 53% (project party’s budget exhausted → earnings continuously shrink).
⚠️ Inflation Spiral:
VELO has no total supply limit → annual issuance of 360 million tokens (daily output ≈ 1 million VELO), long-term price pressure on the token.
⚠️ Ecological Dependence Syndrome:
If the Optimism chain is surpassed by Arbitrum/Base (current TVL share only 15%) → liquidity migration → VELO collapse.
⚠️ Impermanent Loss Doubled:
Providing volatile pairs like VELO/ETH to LP → token price drops + inflation dilution → principal could be halved.
⚠️ Whale Manipulation:
The top 10 addresses control 61% → price fluctuations/voting are monopolized by oligarchs.
Conclusion: VELO is a 'Bribery Game' of liquidity mining — project parties spend money to buy traffic, retail investors earn bribery dividends. However, under the three major risks of inflation, oligopoly, and ecological dependence, the essence of earnings is merely a toll for liquidity merchants, and when it crashes, only a mess remains.
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