State of Velo Q2 2025

Key Insights

• Velo experienced growth across several key metrics in Q2, including circulating market cap (+12.7%), token price (12.7%), total trustlines (+10.1%) and funded trustlines (+7.4%) on Stellar, and average daily transactions (+14.4%).
• Velo partnered with Paxos International to integrate USDL, a regulated, yield-bearing stablecoin backed by U.S. Treasuries, as reserve collateral for its ecosystem’s stablecoin USDV.
• Velo released a new litepaper introducing a new tokenomics model for their PayFAi framework that increases the utility of the VELO token and establishes three new entities within Velo.

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. In 2025 so far, Velo has evolved its PayFi narrative into PayFAi by integrating artificial intelligence into its payment infrastructure and releasing a new PayFAi litepaper.

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

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, which saw their market caps increase by 30.3% and 36.6% QoQ, respectively, VELO’s circulating market cap increased 12.7% QoQ, rising from $88.7 million in Q1 to $100.0 million in Q2. The token price also increased 12.7%, climbing from $0.012 to $0.014.

Fees

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. Fees are generated and summed across BNB Chain.

Universe, Velo’s hybrid exchange platform, uses both Nova and BNB Chain. Users connect via BNB Chain but perform internal operations on Nova until funds are withdrawn. Quantum, Velo’s remittance network, which has yet to be implemented, plans to 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 has no monetary value and does not influence the overall QoQ fee trends. A more comprehensive overview can be read here.

Total fees decreased 10.3% QoQ in Q2, declining from $1,746 to $1,567. Average daily fees also decreased 11.3% from $19.4 to $17.2 by quarter’s end.

Network Analysis

Usage

Average daily transactions across Nova and BNB Chain increased 14.4% QoQ, rising from 1574 in Q1 to 1801 in Q2. In contrast, average daily active addresses decreased by 82.4% QoQ, falling from 4364 in Q1 to 770 in Q2. The rise in transactions can be attributed to the VELO trading competition that took place on Binance Alpha. After the competition launched on June 16, 2025, average daily transactions on BNB Chain for the remainder of the quarter rose to 882, a 223.4% increase compared to the quarter’s daily average of 272 prior to the start of the competition. The increase in average daily transactions and the decrease in average active addresses indicate that, compared to Q1, activity was driven by fewer users who consistently made more transactions.

Breaking it down by chain, BNB Chain recorded a 26.5% QoQ increase in average daily transactions, rising from 295 to 373. Nova also saw an 11.6% QoQ increase, with average daily transactions rising from 1,279 to 1,427. Conversely, BNB Chain recorded the largest decrease in average daily active addresses, down 82.4% QoQ from 4,360 to 767. Nova experienced a more moderate QoQ decline of 19.1%, with average daily active addresses falling from 3.1 to 2.5.

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 expected primary driver for trustline activity – has yet to be implemented.

In Q2, total trustlines increased 10.1% QoQ, rising from 27.8K to 30.6K, while funded trustlines grew by 7.4%, increasing from 17.8K to 19.1K. Though more moderate than in previous quarters, this continued growth demonstrates ongoing user engagement with Stellar-based assets.

Ecosystem Analysis

Velo’s USD-denominated TVL decreased 80.5% QoQ, falling from $18.2 million to $3.6 million, and VELO-denominated TVL decreased 82.7%, falling from 1.5 billion VELO to 262.4 million VELO.

Notably, on April 1, 2025, USD-denominated TVL fell sharply (-82.7%) from $18.2 million to $3.1 million, after a 1.1 billion VELO staking pool ended the day prior. After this decline, TVL in USD recovered by 12.8% over the remainder of the quarter.

General Development and Growth

Velo saw substantial ecosystem development in Q2 relative to the limited events in Q1. These events are broken down monthly below.

April:

• VELO was integrated into Guarda Wallet, a non-custodial crypto wallet.
• VELO was listed on ChangeNOW, a non-custodial crypto exchange.
• Velo launched Stage 2 of its trading competition on Universe, its hybrid DEX, providing $2,000 competition wallets to the top 20 traders from Stage 1, which was held in January.
• Velo launched its new logo.
• VELO partnered with Terminus, a Web3 QR-code payment platform, to integrate VELO as a payment token.
• Velo also partnered with UQUID, a Web3 shopping platform, to integrate VELO as a payment token.

May:

June:

Velo Partners with Paxos International to Integrate USDL

On May 19, 2025, Velo announced a collaboration with Paxos International, a regulated blockchain infrastructure and tokenization platform, to integrate Lift Dollar (USDL) into the Velo ecosystem. USDL is a yield-bearing stablecoin, pegged to the U.S. Dollar, issued by Paxos International and regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). Paxos International invests in short-term U.S. Treasuries and cash equivalents to back USDL, distributing the interest generated to holders. USDL will be integrated as reserve collateral backing USDV, the primary stablecoin of the Velo ecosystem, and as a payment asset. USDV is overcollateralized by USDT, VELO, OpenEden’s tokenized U.S. Treasury bills (TBILL), BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), and TrueUSD (TUSD). Integrating USDL adds additional U.S. Treasury-backed collateral to support USDV and enables businesses in Velo’s ecosystem to hold a yield-bearing stablecoin for liquidity management.

PayFAi Litepaper

Velo also released a new litepaper on June 12, 2025, introducing a new tokenomics model for its PayFAi framework that incorporates AI agent advisors for token management.

The litepaper redefines VELO’s role in the ecosystem by expanding its utility for tokenholders and stakers, including: access to new features, applications, and partnerships prior to public release, and accelerated accumulation of loyalty points in Velo’s Omni Point loyalty program. Notably, the litepaper also introduces a Burn-and-Earn system that allows VELO tokenholders to vote for token burns to reduce VELO supply, potentially increasing VELO value.

Three new entities were also established: (i) the Community Governance Fund to manage governance activities and incentivize participation; (ii) the Foundation Reserve to manage collateral and the stability of USDV; and (iii) the Ecosystem Development Fund to incentivize ecosystem growth and innovation.

Closing Summary

The broader crypto market saw substantial growth in Q2, with BTC and ETH market caps rising 30.3% and 36.6% QoQ, respectively. Velo’s performance reflected more modest gains, as its circulating market cap increased 12.7% QoQ to $100.0 million.

Network usage presented mixed trends. Average daily transactions across Nova and BNB Chain rose 14.4% QoQ, largely driven by the trading competition launched on Binance Alpha on June 16, which led to a 223.4% increase in average daily transactions on BNB Chain for the remainder of the quarter, and a 38.1% increase across both chains. By chain, BNB Chain recorded a 26.5% QoQ increase in daily transactions, while Nova posted an 11.6% rise. Despite an increase in transactions, average daily active addresses decreased 82.4% QoQ, with active addresses on BNB Chain declining 82.4%, and active addresses on Nova falling 19.1%. Total fees across BNB Chain also decreased QoQ, falling 10.3% to $1,567, with averaging daily fees declining 11.3% to $17.2.

TVL declined significantly during the quarter, with USD-denominated TVL falling 80.5% QoQ to $3.6 million and VELO-denominated TVL dropping 82.7% QoQ to 262.4 million VELO. The decrease was primarily attributed to the conclusion of a large staking pool at the end of Q1. Following this event, USD-denominated TVL recovered by 12.8% through the remainder of the quarter.

Development activity increased during Q2. Key initiatives included the launch of Stage 2 of the Universe trading competition, a trading competition on Binance Alpha, and a partnership with Paxos International to integrate USDL as reserve collateral for USDV. Additionally, Velo released a new litepaper introducing a new tokenomics model for its PayFAi initiative that integrates a Burn-and-Earn token mechanism and expanded benefits for VELO holders and stakers.

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