by Coinstrooper Crypto Articles
Quick Take
  • 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 (VELO) is an infrastructure platform bridging traditional finance with Web3 applications.
  • Stellar, known for its low-cost and efficient transactions, is the foundation for Velo’s initial infrastructure.

What Happened

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.

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.

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.

Market Context

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%).

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.

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.

Why It Matters

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.

Details

Key Insights

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.

Primer

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

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.

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

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