What Is Velo?

1. What Is Velo?

Velo is a decentralized finance (DeFi) protocol designed to enable seamless, secure, and efficient value transfers across borders. It acts as a bridge between traditional finance and blockchain by allowing trusted partners—like remittance companies, financial institutions, and fintechs—to issue and exchange digital credit backed by collateral. Velo leverages smart contracts and blockchain technology to facilitate near-instant transfers, improve transparency, and reduce costs, especially for users in underbanked regions.

2. Why Velo Was Created

Velo was created to solve longstanding issues in global financial systems, particularly in the realm of cross-border transactions. Traditional international money transfers are often slow, expensive, and reliant on a network of intermediaries, which leads to inefficiencies and delays. Additionally, millions of people in emerging markets remain excluded from modern banking services.

Velo addresses these challenges by providing a decentralized platform that offers trustless and collateral-backed digital credit issuance. This system allows users and institutions to move value globally without needing to rely on centralized banks or intermediaries, significantly reducing fees and processing times.

3. How Velo Works

1. Partners such as banks and remittance platforms join the Velo network by staking digital assets as collateral.
2. Based on their staked assets, partners can issue digital credits that represent real-world value on-chain.
3. Users initiate transfers through partner platforms, where fiat is converted into Velo’s digital credit and transmitted via blockchain.
4. On the receiving end, digital credits are converted back to fiat through a local partner, enabling fast and efficient settlement.
5. Transactions are governed and enforced by smart contracts, ensuring automation, trust, and compliance.
6. The community and stakeholders use the VELO token to vote on key protocol upgrades and changes.

4. Key Features of Velo

• Decentralized credit issuance backed by collateralized assets
• Cross-border settlement with speed and low cost
• Transparent and auditable smart contract execution
• Trust model based on collateral for secure transactions
• Community-driven governance using the VELO token
• Compatibility with traditional and decentralized financial systems

5. Who Can Use Velo?

• Remittance service providers aiming to reduce cost and time
• Financial institutions offering blockchain-based credit services
• Fintech companies building or integrating DeFi tools
• Developers creating decentralized financial applications
• Underbanked users seeking affordable financial access

6. What Is the $VELO Token?

$VELO is the native utility token of the Velo ecosystem and plays a central role in maintaining and operating the network:

• Used as collateral staking by partners to issue digital credit lines
• Serves as a medium for transaction and network fees
• Enables governance participation and protocol upgrades
• Distributes incentives to users and stakers contributing to network security
• Provides access to exclusive services within the ecosystem