State of Velo Q4 2024

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Key Insights

  • Velo experienced growth across several key metrics in Q4, including total fees (+24.59%), average daily active addresses (+6,957.65%), average daily transactions (+72.82%), total trustlines (+15.73%), funded trustlines on Stellar (+16.12%), USD-denominated TVL (+54.27%), and VELO-denominated TVL (+2.96%).
  • A new Litepaper outlining Velo’s approach to Real-World Assets (RWA) and PayFi was released.
  • Velo partnered with Travala to allow VELO payments for travel services and with OTSO Group to introduce social trading and copy-trading features to Velo Universe.
  • Omni Points Beta launched with TON integration, alongside new functionalities on the Universe Hybrid DEX (e.g., VELO/USDV perpetual trading, Solana wallet integration integration, stablecoin support, and TronChain integration).

Primer

Velo (VELO) is an infrastructure platform bridging traditional finance with Web3 applications. Founded in 2018, its early efforts focused on developing the Digital Reserve System (DRS) and a digital credit issuance mechanism to enable secure and efficient cross-border settlements. By the end of 2023, Velo shifted its focus toward becoming a decentralized Web3 payment network (e.g., Velo Finance), while also introducing their Identity Framework as an additional feature. In late 2024, the project expanded its focus to include the tokenization of RWAs and introduced Orbit, a consumer super app that facilitates payments between Web2 and Web3.

Stellar, known for its low-cost and efficient transactions, is the foundation for Velo’s initial infrastructure. Nova, Velo’s EVM-compatible blockchain, allows smart contracts and supports DeFi operations, mainly on Universe, Velo’s hybrid exchange platform. BNB ChainB Chain supports Velo Finance and facilitates wallet connections, serving as the primary on-and-off ramp for users within the ecosystem. The Warp bridge allows asset transfers between these various blockchains.

Additionally, the Omni Point loyalty program facilitates earning and redeeming points across Web2 and Web3 activities through Orbit. To meet regulatory requirements while preserving privacy, Velo’s Identity Framework combines KYC/KYB protocols with an anonymous blockchain layer, relying on licensed partners to manage KYC/KYB processes when needed.

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Key Metrics

Financial Analysis

Market Cap and Price

Relative to BTC and ETH benchmarks, which saw their market caps grow ~48.00% and ~28.30% QoQ, respectively, Velo recorded a ~47.28% QoQ increase in its circulating market cap, reaching ~$182.95 million by the end of Q4 2024. Despite this growth, Velo’s market cap ranking dropped from 328 at the end of Q3 to 373 by the end of Q4, reflecting shifts in the competitive positioning of the broader market.

Since the beginning of 2024, Velo’s market cap has grown ~463.40%, with its price experiencing an identical ~463.40% increase year-to-date.

Fees

Fees are generated and summed across BSC. For additional context, despite Stellar being Velo’s original blockchain, most operations have shifted to other blockchains. For example, Velo Finance, which focuses on Velo’s DeFi environment, operates on BNB Chain. Universe, Velo’s hybrid exchange platform, uses both Nova and BSC, with users connecting via BSC but performing internal operations on Nova until funds are withdrawn. Quantum, Velo’s remittance network, has not yet been implemented, but will use Stellar. Nova transaction fees were initially estimated using Universe trading fee data; however, this approach was excluded from QoQ calculations due to inconsistencies and potential skew. As outlined in Velo’s documentation, the Nova blockchain uses NOVA as its gas fee, which holds no monetary value and, therefore, does not influence the overall QoQ fee trends. A more comprehensive overview can be read here.

Following a weak Q3, total fees in Q4 were up ~24.59% from ~$1,719 to ~$2,132 in Q4. Year-over-year, total fees have risen ~553.26% from $325.33. Unlike in Q3, both total fees and VELO’s price performance increased in tandem, indicating a potential match between underlying network activity and market sentiment.

Network Analysis

Usage

Similar to the increase in fees, Velo’s network metrics display positive results. Average daily transactions across Nova and BSC were up ~72.82% QoQ, from ~257 in Q3 to ~444 in Q4, reflecting a ~276.58% YoY increase. Average daily active addresses across Nova and BSC were up ~6,957.65% QoQ, up from ~39 in Q3 to ~2,778 in Q4, marking a ~13,290.82% YoY growth.

Notably, activity in December alone accounts for ~62.81% of total daily transactions and ~99.04% of active addresses in Q4, highlighting the month’s overwhelming contribution to the quarter’s activity. Specifically, transaction activity peaked on Dec. 30, 2024, with ~2,510 transactions, while active addresses reached a high of ~27,657 on Dec. 26, 2024.

Breaking this data down by blockchain paints a different picture. Nova showed mixed results across its network metrics in Q4. Average daily active addresses dropped ~58.60% QoQ, from ~10 in Q3 to ~4 in Q4, representing a ~25.53% decline YoY. Despite this, average daily transactions on Nova grew, increasing ~143.82% QoQ, from ~37 in Q3 to ~91 in Q4, resulting in a ~169.86% YoY increase.

In contrast, BSC demonstrated growth across all metrics. Average daily active addresses increased ~9,382.88% QoQ, up from ~29 in Q3 to ~2,774 in Q4 – reflecting a ~18,239.52% YoY increase. Average daily transactions on BSC also grew ~60.75% QoQ, increasing from ~220 in Q3 to ~353 in Q4, representing a ~946.54% YoY increase.

Overall, BSC, the blockchain behind Velo Finance, remained the primary driver of Velo’s network activity in Q4, averaging ~353 daily transactions compared to Nova’s ~91. BSC also maintained higher user participation, with ~2,774 average daily active addresses, surpassing Nova’s ~4. These trends reinforce BSC’s dominance in Velo’s ecosystem, highlighting its role as the central blockchain for user engagement and transaction volumes.

Trustlines

Trustlines on Stellar are agreements between an account and an asset issuer, allowing the account to hold and transact with a specific token. A funded trustline indicates active use by maintaining a non-zero balance. It’s important to note that Velo’s Quantum remittance network – the primary driver for trustline activity – has yet to be implemented.

Year-over-year, total trustlines have risen ~155.21%, from ~8,498 to ~20,876, while funded trustlines have risen ~222.52%, up from ~4,895 to ~13,601.

In Q4 specifically, total trustlines grew ~15.73% QoQ, up from ~18,166 to ~20,876, while funded trustlines saw a similar ~16.12% QoQ growth, up from ~11,934 to ~13,601.

The narrowing gap between total and funded trustlines over the quarter indicates a higher conversion rate of established trustlines into active ones.

Ecosystem Analysis

TVL

Velo’s TVL increased in Q4 2024, with USD-denominated TVL rising ~54.27% QoQ to ~$34.72 million from ~$22.50 million and VELO-denominated TVL growing ~2.96% QoQ, indicating an increase in total locked liquidity alongside token price appreciation. This QoQ metric is based on the Dec. 30, 2024, value rather than Dec. 31, 2024, as DefiLlama’s reported data for the quarter’s final day was inaccurate due to smart contract changes, as confirmed by the Messari Onchain Data team and Velo team.

General Development and Growth

While the metrics above show mixed performance, Q4 saw several qualitative developments, with October being the most significant month for activity and growth. These events included:

October:

November:

  • Velo’s Universe Hybrid DEX introduced VELO/USDV perpetual trading.
  • Solana wallets and stablecoin deposits were integrated into Universe.

December:

Closing Summary

The broader crypto market exhibited strong performance in Q4 2024, with BTC and ETH circulating market caps increasing ~48.00% and ~28.30% QoQ, respectively. Velo’s performance reflected similar growth, in which its circulating market cap rose ~47.28% QoQ to ~$182.95 million, but its overall rank dropped from 328 to 373, indicating a competitive market growth landscape.

Total fees for the quarter rose ~24.59% QoQ, aligning with VELO’s price increase of ~47.28% over the same period. In tandem, average daily transactions across the protocol’s blockchains grew ~72.82% QoQ, while average total active addresses increased ~6,957.65%. Breaking this down by blockchain, BSC exhibited growth across all metrics, with average daily transactions up ~60.75% QoQ and average daily active addresses up ~9,382.88%. Conversely, Nova experienced mixed metrics, with average daily transactions up ~143.82%, while active addresses were down ~58.60%, highlighting the disparity in performance between the two blockchains.

Meanwhile, USD-denominated TVL increased ~54.27% QoQ and VELO-denominated TVL grew ~2.96%, highlighting an expansion in liquidity alongside token price appreciation.

Despite mixed metrics, development initiatives in Q4 continued. Key events included (i) the launch of Omni Points Beta with TON integration, (ii) the introduction of VELO/USDV perpetual trading and integrations with Solana and TronChain on Universe Hybrid DEX, (iii) the release of a Litepaper outlining Velo’s approach to Real-World Assets and PayFi, and (iv) new partnerships with Travala and OTSO Group.

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