- Velo Protocol enables fast, low-cost global payments through digital credits backed 1:1 by VELO and collateralized fiat, built on Stellar and BNB Chain.
- VELO is more than a token—it’s core infrastructure, used for collateral, governance, transaction fees, and access to Velo’s financial tools and DEX platforms.
- The 2025 roadmap positions Velo for global scale, with RWA infrastructure, enterprise cloud tools, and expansion beyond Southeast Asia into Europe and North America.
Velo Protocol bridges Web2 and Web3 finance with digital credits, cross-chain DEXs, and AI payments. VELO powers governance, collateral, and ecosystem utilities.
WHAT IS VELO PROTOCOL?
Velo Protocol is a hybrid blockchain solution designed to bridge the gap between traditional finance and the Web3 ecosystem. At its core, it creates a decentralized credit exchange network that empowers businesses to issue digital credits and transfer assets globally—without the friction of geographical or infrastructural limitations.
➤ Official website: https://www.velo.org/
The native token, VELO, fuels the Velo Protocol ecosystem. It serves multiple purposes, including transaction fees, staking, governance, and most importantly, acting as collateral for issuing digital credits that are often pegged to fiat currencies. This mechanism brings greater efficiency, transparency, and liquidity to cross-border financial operations.
Built on the Stellar Consensus Protocol, Velo Protocol ensures fast and secure transactions. This makes it ideal for real-world financial use cases, particularly in issuing collateralized, fiat-linked digital credits that can seamlessly move across borders.
📌 CeDeFi: Bridging Centralized and Decentralized Finance
One of Velo Protocol’s most notable innovations is its push toward CeDeFi—a hybrid model that combines the transparency and efficiency of decentralized finance (DeFi) with the stability and compliance of centralized systems (CeFi). By using digital credits as collateral, VELO enables greater liquidity while maintaining regulatory compatibility.
To support this CeDeFi vision, Velo Labs launched VeloFinance, a decentralized exchange (DEX) built for flexibility and scalability. VeloFinance combines traditional AMM (Automated Market Maker) mechanics with Kyber Network’s DMM (Dynamic Market Maker) technology, delivering a more adaptive and capital-efficient trading experience.
>>> More to read: What is PUMP? Pump.fun Token Explained
HOW DOES VELO WORK?
Velo Protocol powers cross-border payments through a unique digital credit issuance system, fully backed by its native token, VELO. Unlike traditional remittance networks like SWIFT—which can take several days and incur high fees—Velo Protocol leverages blockchain infrastructure to offer near-instant, low-cost, peer-to-peer value transfers.
Velo Protocol: Bridged Traditional Finance and Web3 for the Real World
Pat, COO of VELO Protocol, was featured on the Paul Barron Show with @paulbarron !
Explore Velo’s impact on the world of decentralized finance.
📺 Watch the full interview here: https://t.co/yjeOXlVIdh
— Velo Official (@veloprotocol) July 7, 2025
Let’s break down the core mechanics behind Velo Protocol:
1. Digital Credit Issuance Mechanism
At the heart of Velo Protocol is its digital credit issuance system. Verified business entities, referred to as Trusted Partners, deposit VELO tokens into the platform. In return, they receive an equivalent amount of digital credits.
These deposited VELO tokens are locked in smart contracts and linked to collateralized fiat currency deposits. This setup allows Trusted Partners to issue digital credits backed 1:1 by locked VELO, enabling secure and efficient cross-border settlements with guaranteed liquidity.
2. Digital Reserve System (DRS)
To maintain the integrity of its digital credit system, Velo Protocol has developed the Digital Reserve System (DRS). This system actively manages token supply and uses automated rebalancing based on the real-time market price of VELO.
The DRS ensures that digital credits remain fully collateralized and maintain a stable 1:1 value peg with their corresponding fiat currencies. This dynamic reserve model is critical for preserving trust and ensuring consistent liquidity throughout the network.
3. Built on Stellar for Speed and Efficiency
Velo Protocol is built on the Stellar blockchain—chosen for its high throughput, low transaction costs, and proven reliability in micropayment use cases. Stellar can handle up to 1,000 transactions per second (TPS), making it one of the fastest blockchains tailored for real-world financial applications.
Unlike Ripple, which primarily focuses on enhancing existing banking infrastructure, Stellar is designed to serve the unbanked. This aligns with Velo Protocol’s mission of creating accessible financial tools for underserved markets, while benefiting from Stellar’s strong liquidity and network security.
>>> More to read: What is Stellar (XLM) | How Does It Work?
VELO PROTOCOL CORE COMPONENTS & INNOVATIONS
Velo Protocol continues to evolve through technical innovation, building a multi-layered ecosystem to support seamless digital finance. Here are its key components:
✅ Cosmic Hybrid Perpetual DEX
This decentralized exchange supports perpetual contract trading across Nova Chain, BNB Smart Chain (BSC), and Solana. With gas-free transactions and high-speed execution, it significantly reduces user costs while enhancing trading efficiency.
✅ Velofinance (Built on BSC)
Velofinance is the native DeFi platform within the Velo Protocol ecosystem. It offers wallet-based access to liquidity mining, staking, and token swaps. Users can interact directly through their crypto wallets, improving both usability and security.
✅ PAYFAI: AI-Powered Payment Layer
PAYFAI is an AI-driven infrastructure layer designed to optimize cross-border payments and FX transactions. By bridging Web2 and Web3 systems, it provides smarter, faster, and more cost-effective solutions—especially for e-commerce and digital service providers.
>>> More to read: What is PayFi? The Core of Crypto Payments
WHAT IS VELO & WHAT IS IT USED FOR?
VELO is the core utility token of the Velo Protocol ecosystem. Originally launched on the Stellar network, it has since expanded to the BNB Chain, improving its liquidity and cross-chain accessibility.
At its core, VELO serves as collateral for issuing digital credits within Velo Protocol, forming the backbone of value transfers across the platform.
📌 Main Use Cases of VELO
Holding VELO is more than just a speculative investment—it’s essential for ecosystem participation:
- Collateral for Digital Credit: Trusted Partners must acquire or borrow VELO to mint digital credits.
- Governance: Token holders can vote on proposals to shape the protocol’s future direction.
- Platform Utility: VELO is used to pay for fees across the Velo Protocol, including service and referral fees.
📌 VELO Tokenomics
VELO had an initial total supply of 30 billion tokens. However, 6 billion tokens were burned in 2022, reducing the max supply to 24 billion. No additional token burn plans have been publicly announced since.
Updated Token Allocation:
- Velo Development Reserve: 20.83%
- Strategic Partners: 22.85%
- Community Development: 14.51%
- Reserves: 12.50%
- Founders: 12.50%
- Early Backers & Advisors: 9.88%
- Private Sale: 6.10%
- Exchange Listings: 0.83%
SUMMARY
Velo Protocol is creating a hybrid financial ecosystem that connects traditional and decentralized finance through digital credits, cross-chain infrastructure, and AI-powered payment layers. Its native token, VELO, plays a central role—used for collateral, governance, and transaction fees across platforms like Velofinance, Cosmic Hybrid DEX, and PAYFAI. With deployments on Stellar and BNB Chain, it delivers fast, cost-efficient, and secure global value transfers.
Looking forward, Velo Protocol aims to expand beyond Southeast Asia with a 2025 roadmap focused on RWA tokenization, enterprise-grade cloud solutions, and international partnerships. With growing traction in Thailand, Singapore, and Laos, and plans to enter Europe and North America, Velo Protocol is poised to become a global leader in bridging Web3 with real-world finance—positioning VELO as a high-potential asset in the digital economy.
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