Velodrome Finance Price Chart (VELO) - CoinGecko

Providing and incentivizing liquidity are some of the core aspects of the DeFi ecosystem. Nowadays, most protocols are currently facing incentivizing liquidity issues.

Providing and incentivizing liquidity are some of the core aspects of the DeFi ecosystem. Nowadays, most protocols are currently facing incentivizing liquidity issues.

This is where Velodrome Finance comes in. The finance protocol focuses on propounding workable solutions to liquidity incentivization. This article is an in-depth review of Velodrome Finance, its functions, goals, team, benefits for DeFi protocols, etc.

What is Velodrome Finance?

Velodrome Finance is the liquidity base layer for the entire Optimism ecosystem. Launched in June 2022, it focuses on properly incentivizing liquidity for DeFi protocols. Interestingly, Velodrome is built on the foundation put in place by Solidly. Making important tweaks and changes to the work done by Solidly to ensure that Velodrome reaches its full potential.For a DeFi protocol to function successfully, it needs some form of liquidity. However, acquiring liquidity and providing incentives for liquidity providers (LPs) can sometimes be a herculean task to manage. Hence, there was a need for a protocol like Velodrome Finance. You can see how this protocol works in the picture below: