With XRP recently surging over 300%, closely approaching BTC, the PayFi sector led by XRP has once again attracted widespread attention from investors. Ripple, as a pioneer in the combination of traditional finance and blockchain technology, has once been a preferred partner for global financial crypto institutions. However, in the emerging PayFI (Payment Finance) track, another blockchain-based cross-border settlement technology project – Velo – is quietly rising as an undeniable force with its unique perspective and innovative business model.

I. The Rise of the PayFI Track

As financial technology continues to advance, the limitations of traditional payment methods are becoming increasingly apparent. Traditional payment systems often have high transaction costs and complex processes, while blockchain technology, with its decentralized, efficient, and low-cost characteristics, is gradually becoming the new favorite in the payment field. However, mere crypto payments are not enough to completely disrupt the traditional financial system. It is in this context that the PayFI track has emerged, bringing new possibilities to the payment industry.

PayFI, as an innovative application that integrates Web3 payments, DeFi, and RWA (tokenization of real-world assets), combines the innovative concepts of traditional financial infrastructure and liquidity in Web2 with on-chain solutions in Web3. It not only inherits the efficiency and convenience of crypto payments but also provides users with richer and more flexible payment and financing solutions by introducing DeFi lending mechanisms and RWA asset tokenization.

II. Overview of the Velo Project

Velo is a blockchain-based financial protocol designed to connect traditional finance with Web3 applications. Since its establishment in 2018, it has gradually transformed from a digital credit issuance platform to a comprehensive financial service platform covering RWA, cross-border payments, DeFi, and more. Velo's operations are based on the blockchain infrastructure of Stellar and Nova, utilizing the Stellar blockchain for fast, low-cost transactions, and supporting smart contracts through the Nova blockchain to enable cross-border value transfer and multi-chain operations.

Velo's core technology includes the Warp bridge system, which utilizes Stellar's Hash Time-Locked Contracts (HTLC) technology to enable cross-chain asset transfers between Stellar and BSC, as well as any future smart contract-compatible blockchains (such as Nova, TRON, Solana, TON, etc.), enhancing its cross-chain interaction capabilities. Additionally, Velo has launched the Orbit platform, integrating a decentralized loyalty program that rewards users for both Web2 and Web3, providing a rich financial service experience.

Currently, the Web3 financial ecosystem Velo Labs secured a $10 million investment from DWF Labs last November and received a second strategic investment from UOB Venture Management (UOBVM), a private equity and venture capital subsidiary of UOB, in September this year, with the specific amount not yet disclosed.

Reportedly, the market capitalization of UOB is approximately 54 billion Singapore dollars (as of September 2024), with total assets under management exceeding 500 billion Singapore dollars. Velo Labs will provide Web3-based financial solutions and settlement networks to facilitate value transfer.

III. Velo's Advantages in the PayFI Field

Technical Infrastructure

Multi-Chain Support

Velo adopts a multi-chain strategy, operating on Stellar and Nova blockchains, with plans to support more blockchains. This multi-chain support not only reduces transaction costs and improves transaction speed but also ensures a seamless user experience. Users can freely transfer assets between different blockchains, enjoying more flexible and convenient financial services.

Cross-Chain Technology

Velo's Warp bridge system enables the transfer of assets between different blockchains. This technology breaks down barriers between blockchains, allowing users to transact and make payments seamlessly across various blockchains. This not only enhances Velo's interoperability but also broadens its application scenarios, providing users with more choices and convenience.

High-Performance Blockchain

Nova, developed independently by Velo, is an EVM-compatible blockchain designed for high-performance trading. It eliminates the high gas fee issues found in traditional blockchains, providing a more efficient and economical trading environment. This allows Velo to maintain low latency and high throughput when processing a large number of transactions, meeting users' demands for efficient financial services.

Product Ecosystem

Orbit Super App

Orbit is a consumer super app launched by Velo, integrating various functions such as payments, loyalty programs (Omni Point), and trading. Through innovative products like Omni Point, Velo demonstrates its potential and prospects in real-world applications. The Omni Point program, as part of the Orbit super app, provides users with new ways to earn and redeem rewards, enhancing user stickiness and loyalty.

Furthermore, the Orbit platform integrates various functions such as payments and trading, providing users with a comprehensive financial service platform. These real-world applications not only enhance user experience but also provide strong support for Velo's market expansion in the PayFI field.

Product Coverage On-Chain and Off-Chain

Velo also offers a range of financial products, including stablecoins, lending, trading, etc., covering multiple areas both on-chain and off-chain, including the Universe hybrid DEX, Warp cross-chain platform, the EVM-compatible Nova blockchain, Quantum remittance network, PLG tokenized gold, and Orbit consumer payment super app, including:

  • Universe: A hybrid trading platform combining decentralized trading wallets with centralized matching engines, using two tokens, USDV and USDG.

  • Universe Wallet: A decentralized trading wallet that supports multi-chain asset management and secure trading.

  • Nova: A high-speed, low-gas fee EVM-compatible blockchain, using NOVA tokens as gas fees.

  • Velo Finance: Provides DeFi solutions, including yield farming, staking, and decentralized lending.

  • RWA & PLG: Tokenization of real-world assets such as U.S. Treasury bonds, receivables, and gold, with the PLG project focusing on the tokenization of physical gold.

  • Orbit: A consumer super app that seamlessly connects Web2 and Web3, supporting payments and points earning and redemption.

  • Quantum: A blockchain remittance platform connecting traditional financial institutions with trusted partners to provide fast, low-cost remittance services.

  • These products not only meet users' diverse financial needs but also enrich Velo's ecosystem. Users can easily manage asset allocation, lending, and trading operations on the Velo platform, enjoying more convenient and efficient financial services. By continuously launching innovative financial products and services, Velo can consistently attract and retain users, further consolidating its leading position in the PayFI field.


Tokenization of Real-World Assets

Velo is committed to tokenizing RWA, including real estate, artworks, gold, etc. Through tokenization, these traditional assets can be divided into smaller units for trading and holding, reducing investment thresholds and improving asset liquidity. This provides investors with more diverse asset allocation options and promotes the integration of traditional finance with blockchain technology.

Core of Velo Ecosystem - VELO Token

As the native token of the Velo ecosystem, VELO plays a crucial role in the operation of the Velo platform. Initially issued on Stellar, the VELO token is compatible with Stellar's native wallet and also exists on the BNB Smart Chain as a BEP-20 token in a wrapped version, making it convenient for users to obtain through CEX and DEX.

The VELO token also plays multiple key roles within the Velo ecosystem:

  • Digital Credit Collateral: VELO can serve as collateral for digital credits like the USDV stablecoin, providing users with stable value storage and transaction mediums.

  • Staking Rewards: Users can earn rewards by staking VELO tokens, increasing liquidity yield on their assets.

  • Transaction Fees: VELO tokens cover all platform transaction fees, reducing users' transaction costs.

  • Orbit Discounts: In the Orbit app, VELO tokens can be used to reduce fees and earn rebates, enhancing user experience and loyalty.

According to VELO tokenomics, its initial supply cap was 30 billion tokens, but after 6 billion tokens were destroyed within six months of 2022, the supply cap was reduced to 24 billion tokens. As of September 20, 2024, the circulating token supply is approximately 7.39 billion tokens, lower than the estimated 10.78 billion tokens, mainly due to delays in token exchange and distribution with Stellar. The circulating token supply is expected to reach approximately 11.04 billion tokens by 2025/2026.

In addition, Velo provides users with various ways to earn rewards. Users can lock VELO tokens in staking pools for a fixed period. It is worth noting that previous staking activities have involved centralized exchanges such as KuCoin and OKX. Users can also provide liquidity for liquidity pools (LPs) on Velo Finance. Liquidity mining rewards are distributed in VELO tokens.

IV. Velo's Competitiveness

Compared to Ripple and others

Although Ripple is also a leader in cross-border payments, Velo has demonstrated stronger technical strength and innovation capabilities in multi-chain support, cross-chain technology, and product ecosystem. Ripple primarily relies on its proprietary blockchain network for cross-border payments, while Velo achieves more flexible and efficient transaction processing through multi-chain support and cross-chain technology. Additionally, Velo offers a richer and more diverse array of financial products and real-world asset tokenization services, giving it an advantage in meeting user needs.

In terms of market positioning, Velo not only focuses on the cross-border payment sector but also expands into more financial service areas through its rich product ecosystem and partner network. This diversified market positioning gives Velo more flexibility and adaptability in competition. In contrast, Ripple's market positioning is relatively singular, mainly concentrated in the cross-border payment sector. As the financial payment industry continues to evolve and transform, Velo's diversified market positioning will help it better respond to market changes and challenges.

Addressing the Challenges of Traditional Payment Systems

Traditional payment systems often face high transaction costs and complex process issues. Velo reduces transaction costs and simplifies the transaction process through blockchain technology, providing users with more economical and convenient payment services. This cost advantage makes Velo more competitive in attracting users.

Moreover, in terms of user experience, traditional payment systems often have shortcomings, such as slow payment speeds and cumbersome processes. Velo provides users with a smoother and more convenient payment experience through its advanced blockchain technology and rich product ecosystem. Users can easily complete payment operations in the Orbit app and enjoy discounts and rewards, and this good user experience will help Velo stand out in competition.

V. Velo's Partnerships: The Cornerstone of Building Global Financial Bridges

Velo's rapid rise is attributed to its carefully built extensive partnerships. In fact, Velo partnered with global payment giant Visa as early as 2020 to develop payment solutions with Lightnet and Visa in Asia, and the $VELO token will serve as collateral for digital asset financial solutions. The pioneering collaboration with Visa provides Velo with strong market influence and technical support, helping it quickly push blockchain payment solutions to the global market. Meanwhile, the partnership with the Lao National Treasury Bank positions Velo as a leader in the digitalization of gold trading, enhancing transparency, security, and liquidity in transactions.

Currently, BlackRock has announced its support for Velo, providing it with a strong endorsement and global recognition and trust, allowing it to attract and manage large-scale funds and establish partnerships with top global asset management institutions. The support from UOB has enabled Velo to deepen its understanding of local market demands in the Southeast Asian market, providing tailored financial products and services to users.

The integration with Solana provides Velo with strong technical support and scalability, making its innovations in blockchain finance more promising. Additionally, the collaboration with Thailand's largest corporate group, CP Group, has achieved extensive commercial deployment in the payment market in Southeast Asia, providing strong support for Velo's rapid expansion in the Southeast Asian market and bringing rich business networks and collaboration opportunities.

These diversified partnerships not only provide Velo with crucial technological, resource, and market access advantages but also lay a solid foundation for its deep dive into the global financial field. In the future, as collaborations continue to deepen and expand, Velo is expected to play a more significant role in the global financial market, offering users more convenient, efficient, and secure financial service experiences.

Conclusion

As one of the pioneers in the PayFI field, Velo has demonstrated strong advantages and competitiveness since its launch in 2018. Its advanced technical infrastructure, rich product ecosystem, strong partner network, as well as compliance and security advantages position Velo for broad development prospects in cross-border payments and financial services.

With the ongoing transformation and development of global payment and financial markets, Velo is expected to become an important force in leading industry changes and providing users with more convenient, efficient, and secure financial service experiences. Currently, XRP has surpassed Solana and Tether (USDT) to become the third-largest cryptocurrency by market capitalization, and Velo will continue to grow amidst this wave of PayFI.

#payfi $XRP #VELO