Thread by @VelodromeFi

Velodrome is an AMM designed as the central trading and liquidity marketplace on @optimismPBC.

It is the next evolution of the @solidlyexchange model introduced by Andew Cronje.

Launching on May 31st with 10+ partners, it will kick start #OPSummer.

Need a 101?👇🧵

A quick rundown, in four parts:

𝟏. On Solidly
𝟐. On Velodrome
𝟑. On Launch
𝟒. On The Future

𝟏. On Solidly

Andre designed Solidly as a next-gen AMM optimized to facilitate swapping of both correlated and uncorrelated assets.

Similar to Curve, those who lock their tokens are able to vote to steer emissions to desired pools and receive a cut of protocol fee revenue.

Solidly evolved this model by focusing on incentivizing trading fees rather than passive liquidity.

An ecosystem public good where 100% of fee and bribe revenue is returned to the voters of a given pool.

Aligning incentives to create deep liquidity on key ecosystem pairs.

This was a shift from the Curve model where voters could direct emissions to pools that didn't produce fees while still receiving their 50% cut of overall revenue.

In Solidly, emissions were better aligned with protocol incentives allowing the system to self-optimize.

Solidly also introduced other novel mechanics such as veNFTs, early ecosystem protocol distributions, and ve(3,3) incentives / anti-dilutive rebases.

Solidly had the most innovative mechanisms in DeFi, but they never truly got tested due key issues:

🕷 Bugs left key features broken
📊 Emissions were overly front-loaded
🤝 Distribution was too concentrated
🔐 White listing was exploited
🤦‍♂️ No team to steward it

𝟐. On Velodrome

That is why @_veDAO_ partnered with @optimismPBC to take the best of Solidly and create Velodrome.

Velodrome is an AMM designed to provide deep liquidity and low fee / slippage trades. A public good that supports the development of the Optimism ecosystem.

Simply, Velodrome works as follows...

veVELO voters choose which pools get emissions.

veVELO voters receive the trading fees / bribes collected by the pairs they vote for.

LPs receive the emissions directed to their pools.

veVELO lockers receive anti-dilutive weekly rebases.

Velodrome addresses key issues in Solidly...
👉 Improved Distribution
👉 Improved Emissions
👉 Fixed Whitelisting
👉 Improved Bribes + Incentives
👉 Removed LP Boosts
👉 Ongoing Team to Support

Improved Distribution

Whereas Solidly's distribution was concentrated and untargeted, $VELO is distributed to those protocols and users we believe are most likely to contribute to Velodrome’s broader mission.

Improved Emissions

Whereas a large majority of Solidly's supply was distributed in the first 8 weeks, Velodrome has built a more sustainable emissions schedule to incentivize locking while also supporting meaningful liquidity.

Fixed Whitelisting

On Solidly, token whitelisting was exploited, allowing actors to game emissions.

Velodrome too supports permissionless liquidity pool and gauge creation, but these can only include whitelisted tokens.

And the "Commissaire" can step in if needed.

Improved Bribes + Incentives

Solidly set it's fees too low and it's integrated bribe feature was broken at launch.

On Velodrome, fees have been raised to .02% and we've rebuilt the bribe system to be Votium-esque.

All fees, bribes, and rebases go to veVELO voters.

Removed LP Boosts

Boosts put smaller players at a disadvantage.

So we're opting to give all veVELO voters and Velodrome LPs an equal playing field.

This removes the need for farmers to rely on secondary layers that extract 15%+ taxes.

Ongoing Team

Solidly was lacking in documentation, communication, support, and the ability to fix bugs after launch.

Velodrome will support an ongoing team to fill these gaps and build out future functionality such as "Velodrome: Relay".

𝟯. On Launch

May 31st, Velodrome Finance goes live.

What will you be able to do?
↔️ Swap Tokens
🪙 Deposit LPs
🔐 Lock $VELO as $veVELO
💸 Deposit Bribes
🗳 Vote for Pools
🪂 Claim Airdrops

We'll be launching with over 10 partners, including...

@optimismPBC
@MakerDAO
@fraxfinance
@redactedcartel
@perpprotocol
@thalesmarket
@AlchemixFi
@HundredFinance
@lyrafinance
@LiquityProtocol

...and even more yet to be announced!

For a walk-through of that first week and some of the opportunities that it will present, see our thread below.

https://twitter.com/VelodromeFi/status/1530269340804718599

𝟒. On The Future

After launch, we'll be adding additional features...
💻 Fully Featured Front-End
🤝 Integrated Vote Delegation
🗳 Integrated Vote Optimization
📊 LP and Bribe Auto-Compounding
💸 Liquidity for veNFTs

More on "Velodrome Relay" below!

medium.com/@VelodromeFi/v…

We hope you're all as excited for the races as we are!

If you liked the thread, please like and retweet.

And join us on Discord for the latest.

🚴‍♀️💨

discord.gg/velodrome