Dear CoinEx users,
To provide you with more trading options, after rigorous reviews, CoinEx will list VELO and support deposit and withdrawal & Automated Market Making (AMM) on Feb 16, 2023 (UTC). And its trading pair VELO/USDT will be available on the same day.
VELO Services
1. Deposit: 07:00 Feb 16, 2023 (UTC)
2. Withdrawal: 07:00 Feb 16, 2023 (UTC)
3. Trading pair: VELO/USDT
4. Opening method: Call Auction
a. Call Auction
07:00-09:50 Feb 16, 2023 (UTC)
Orders can be placed and canceled
09:50-10:00 Feb 16, 2023 (UTC)
Orders can be placed but cannot be canceled
b. Trading
10:00 Feb 16, 2023 (UTC)
About VELO
Velodrome Finance is a solution for protocols on Optimism to properly incentivize liquidity for their own use cases.
Current solutions for incentivizing liquidity come with their own tradeoffs and pitfalls:
(1) Pool 2 emissions (i.e. attaching a reward to staked LPs) can be costly to maintain, and often times result in a "farm and dump" resulting in "unsticky" liquidity.
(2) Protocol owned liquidity can be costly to bootstrap, and liquidity may only be needed occasionally, instead of on-going basis.
(3) Bribing voters in the CRV/CVX system can be costly as incumbents already have a sizeable lead. Additionally, the universe of pool types here are limited.
Velodrome addresses these issues and presents an attractive alternative by addressing the core issues in Solidly and adding its own improvements. To recall, the key innovation of Solidly was to align protocol emissions with fees generated, not simply liquidity. To do this, it would allow protocols and other large stakeholders to become veNFT "voters", using their locked voting power to direct future emissions and collecting fees (termed bribes in Solidly) from the pools they voted for.
Velodrome has made several improvements to the Solidly codebase, all of which were thoughtfully chosen to ensure that the protocol would carry out the original intended mechanism of allowing voters to fairly compensate LPs for impermanent loss.
Velodrome Finance uses two tokens to manage its utility and governance:
(1) VELO: ERC-20 utility token of the protocol. VELO is used for rewarding liquidity providers through emissions.
(2) veVELO: ERC-721 governance token in the form of an NFT (non-fungible token). veVELO is used for governance. Any VELO holder can vote-escrow their tokens and receive a veVELO (also known as veNFT) in exchange. Additional tokens can be added to the $veVELO NFT at any time.
What is Automated Market Making (AMM)?
Automated market making (AMM) can calculate the buying and selling price according to the formula, so as to provide a continuous quotation for the market. CoinEx combines AMM with the order book, which means the liquidity pool will be automatically converted into the order book. With the "constant product market maker formula" algorithm in AMM, no matter how large the order book is or how small the liquidity pool is, firm liquidity provision to the market can be guaranteed. Learn more
Fees and Profit
Market supporting automated market making is an AMM market. Compared with normal market, AMM market adopts an independent fees system. The fees for both marker and taker is 0.3%, for market makers is 0.15%. VIP will not enjoy any special fees, and using CET for fees deduction is unavailable. All users are qualified to apply for market makers, and 50% of the market's transaction fees will be rewarded to liquidity providers.
Characteristics of AMM
1. Bonus obtainable from automated market making
User’s provided liquidity will be injected into the pool for automated market making. 50% of the market's transaction fees will be rewarded to liquidity providers in terms of the corresponding pool proportion.
2. Daily bonus can be cumulatively withdrawn
The transaction fee bonus will be calculated once a day and automatically credited into the user's Market Making Account before 4:00 (UTC) the next day. The user can obtain all the accumulated fee bonus after removing liquidity.
3. Free access, no charge required
Assets between Spot Account and Market Making Account can be transferred in real-time by adding and removing liquidity. Each user in a single market can increase liquidity twice a day, and no fees will be charged during the operation.
Risk Reminder
The assets in the Market Making Account will be injected Into the liquidity pool for automated market making. When the price fluctuates, there will be impermanent losses, and the amount of the two assets will change when the liquidity is removed. More details about impermanent losses
CoinEx Team
Feb 16, 2023