Velo Labs (VELO) is a comprehensive blockchain solutions provider that focuses on the issuance of collateral-backed digital credits to facilitate seamless international transfers. The platform is one of the first to rely on the issuance of credit to create a streamlined process for transferring data and value internationally. Here’s everything you need to know about Velo Labs (VELO).
Velo seeks to empower its users to conduct intentional commerce efficiently. The protocol enables anyone to issue digital currencies transparently backed by any fiat currency. As such, it managed to become a strong contender in the transfer space. Currently, Velo has strategic partnerships with Visa, Kyber Network, KogoPay, Chainlink, and more
What Problems Does Velo Labs (VELO) Attempt to Fix?
There are several concerns that Velo seeks to alleviate with its unique approach. For one, the platform seeks to reduce volatility in the space. Crypto volatility is seen by many as the main roadblock to adoption by commercial entities. Merchants aren’t keen to lose value on their sales due to market fluctuations.
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Source – Velo Labs
Velo addresses this concern via its proprietary token issuance strategy. The project enables users to create trackable and stable digital assets that can be sent globally in a permissionless manner.
International Transfers and Commerce
Sending money internationally is an expensive task that requires oversight from +35 different groups, all adding to the overall cost of the transactions. Velo enables users to transfer funds internationally with minimal fees, no middlemen, and no losses due to exchanges. To accomplish this task, the network introduces a system that allows partners to issue digital credits via a smart contract layer
Overcollateralization
In the blockchain space, most firms require over-collateralization to issue credit. This requirement has made blockchain alternatives less attractive to centralized options that can provide under-collateralized access to funding. Thankfully, Velo employs some strategies to prevent over-collateralization and default. For example, the network automatically rebalances your collateral and VELO tokens to prevent issues before they emerge.
Benefits of Velo Labs (VELO)
There are several benefits that Velo Labs brings to the market. For one, it provides users with access to advanced DeFi features and economy without restricting their freedom to explore. Users enjoy the efficiency, transparency, and security of blockchain tech while still being able to seamlessly interact with traditional financial products. In this way, Velo connects the legacy financial, CeFi, and DeFi markets.
Interoperability
Another benefit that can’t be understated is Velo’s commitment to interoperability. The project introduces bridges that allow anyone to transfer tokens between decentralized networks easily and securely.
How Does Velo Labs (VELO) Work?
Velo leverages the Stellar network to provide security and scalability to the market. Stellar is one of the best-known blockchains and settlement solutions in the market. It was designed to help businesses conduct international commerce. As such, the Stellar Consensus Protocol is the ideal option to process and settle transactions.
Velo users can issue collateral-backed digital credits that are linked to any fiat reserve, to transfer data in seconds globally. The platform accomplishes this task by maintaining a 1:1 peg between the digital and fiat collateral value.
Velo Protocol
The Velo Protocol is the smart contract coding that issues collateralized tokens pegged to fiat coins. The system works by locking up funds on the smart contract before issuing a token that shares the same value. Every day, Velo collateral rebalances to ensure a 1:1 peg remains.
Hermes Warp Protocol
Velo uses the Hermes Wrap Protocol to bridge assets across different blockchains. Interoperability drives innovation and adoption. As such, Velo wanted to ensure that its users could transfer value between blockchains safely and efficiently. Specifically, Hermes Wrap Protocol bridges the Stellar Network, Everynet, and Ethereum blockchains.
Digital Credit Issuance Mechanism
The Digital Credit Issuance Mechanism is a smart contract that ensures digital credits can be created by staking Velo tokens. These VELO are staked in collateral pools, which are smart contracts designed specifically to service the community.
Digital Reserve System
Another core feature of Velo is its Digital Reserve System. This protocol automatically rebalances the VELO token collateral pools to maintain a 1:1 value between the issued digital credits and their fiat reserves. The rebalancing is done daily, preventing over-collateralization.
Federated Credit Exchange Network (FCX)
The Federated Credit Exchange Netwerk is a core component of the Velo experience. This protocol is responsible for ensuring finality and reducing last-mile issues that may emerge as the network expands. The system relies on VELO as the settlement tool for collateral-backed newly issued credits.
Orbit
Orbit is another critical component of the ecosystem. This mobile Dapp allows users to effortlessly make p2p transactions and payments. The Dapp was built from day one to streamline the onboarding of new users.
Token – VELO
VELO is the main utility token for the network. Users can leverage VELO as collateral to issue credit for transfers. VELO is rebalanced daily to ensure the pool remains at a 1:1 peg. As such, it’s vital to settlement and other core features of the platform.
How to Buy Velo Labs (VELO)
Currently, Velo Labs (VELO) is available for purchase on the following exchanges.
Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong.
KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens. It is often the first to offer buying opportunities for new tokens. Restrictions may apply, depending on location.
Gate.io – This exchange was established in 2013 and is one of the more popular & reputable exchanges. Gate.io currently accepts most international jurisdictions including Australia & the UK. USA & Canadian residents are prohibited.
A Strong Project Worth Watching
Velo Labs has put together a combination of features that make this platform a strong contender in the market. The protocol provides transparent and trackable token issuance while eliminating volatility from the crypto equation. All of these factors have contributed to the strong positioning that Velo currently holds in the remittance sector. Notably, you can expect Velo to receive further coverage as the platform expands its partnerships and operations.
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