Velodrome Finance Token Transparency Filing

Project and Team

Description of Project

Definition: A narrative description of the purpose of the project and its operation in layman's terms is provided. Weighting

0: A simple description is not provided.
1: A simple description is provided.

Velodrome is a decentralized spot exchange (spot DEX) designed to serve as the Superchain’s liquidity hub, combining a powerful liquidity incentive engine, vote-lock governance model, and friendly user experience. Score Received: 1/1

Disclosure of Revenue Streams

Definition: A narrative description of the Project's primary sources of revenue is provided, broken out by entity (e.g. Foundation, Labs, DAOs, or other). Weighting

0: A simple description is not provided.
2: A simple description is provided.

As a MetaDEX, Velodrome incentivizes activity on its DEX by issuing VELO to its liquidity providers. The activity to which this VELO is emitted is determined by veVELO holders, who directly receive all of the revenue generated by the activity they are incentivizing. Primary sources of revenue are trading fees and ‘external incentives’ paid by users seeking to induce veVELO holders to direct VELO emissions toward their desired pools. Of note is that veVELO voters receive only the revenue generated by pools they have voted on; that is, there is no global distribution of revenue. Unlocked VELO receives no fees and has no unique rights other than that it can be locked as veVELO. veVELO can vote to direct VELO emissions and receives 100% of revenues from pools it votes for. It also receives weekly rebases that offset dilution. Score Received: 2/2

Equity-Token Relationship

Definition: The Project must clearly disclose the rights, value accrual mechanisms, and distinctions between token holders and DevCo equity holders. Any value allocated specifically to equity holders (e.g., dividends, profit-sharing) must be communicated separately from value accruing to token holders. Weighting

0: Rights and value mechanisms are unclear or undisclosed, or there is no distinction between token and equity holders.
1.5: Rights, value accrual, and differences between token and equity holders are clearly and explicitly defined with the constraints of existing regulations.
3: Rights, value accrual, and differences between token and equity holders are clearly and explicitly defined with the constraints of existing regulations. Team makes specific representations like "We do not plan to return cash flow to equity through including through dividends and share repurchases" or identifies that the Development Entity is not for profit.

Contributors to Velodrome (Dromos) have no enshrined claim on any protocol revenue. They generate value from the protocol primarily through their own veVELO positions and as such are coequal to any veVELO holder with respect to value accrual. There is thus no relevant equity-token relationship to disclose. Score Received: 3/3

Disclosure of Advisory Billings to the Foundation

Definition: If core team members are compensated by any Tokens allocated to the Foundation through advisory services or similar agreements, or by any other payment method (i.e. fiat), these payments must be disclosed. Note, foundation team members known and exclusively compensated by the Foundation are excluded. Weighting

0: No acknowledgment or visibility of advisory payments from Advisory.
1.5: Advisory payments are mentioned, but details (amount, recipient, services) are unclear or incomplete.
3: All advisory payments to insiders are fully disclosed, including the recipient, scope, and amount.

Dromos receives 3% of weekly VELO emissions, which it locks as veVELO. Contributors to Velodrome (Dromos) have no enshrined claim on any protocol revenue. They generate value from the protocol primarily through their own veVELO positions and as such are coequal to any veVELO holder with respect to value accrual. The founding members of Dromos contributed to two other protocols, veDAO and Aerodrome, and designed the token launches for Velodrome and Aerodrome. In both these cases, an overwhelming amount of control of the new protocols was allocated to previous protocolsʼ holders. There is no functional distinction in permissions or functionality between any of veVELOʼs holders, regardless of affiliation with Dromos. That is, there are no insiders. Score Received: 3/3

Known Project Team

Definition: The identities of key team members (e.g., founders, CEO, CTO, COO of Labs, President of Foundation, etc.) are publicly disclosed. Weighting

0: No method to verify or prove the identities of key team members
1: A Method to verify or prove the public identities of key team members is provided.

Part of the Dromos contributorship is doxed, but many are anonymous, though often with highly visible identities. Its primary public-facing contributor is Alexander Cutler. Score Received: 1/1

Token Supply and Allocation

Governance & Token Documentation Provided

Definition: The Project must provide publicly accessible documentation covering the Token's governance rights, rights to value accrual, any additional utility, and the mechanism by which token governance is implemented (e.g. an insider multi-sig). Weighting

0: None of the three areas are documented.
0.5: Not all three areas are documented.
1: All three areas are clearly documented.

The canonical source for Velodrome’s supply, emissions, governance, and veVELO mechanics is at www.velodrome.finance/docs
Smart contract docs are available in the public Github repo. The protocol is designed to enable token swaps and generate fees (from Traders) by attracting liquidity. Every epoch liquidity providers (LPs) receive $VELO token emissions proportionally to the votes the pools accumulate. Only staked (in the protocol gauges) liquidity receive emissions. Participants can lock their $VELO to be able to vote on the next epoch distribution of emissions, becoming veVELO Voters. All governance activities are handled directly onchain without outside intervention; that is, veVELO holders directly affect the protocol's function. veVELO Voters are rewarded (proportionally to locked amounts) for their votes with 100% of the protocol trading fees from the previous epoch and any additional voter incentives from the current epoch. An epoch is a 7-day period. It starts every Thursday at 00:00 UTC and ends Wednesday at 23:59 UTC. Votes, emissions, fees, and incentives are calculated for each epoch. The initial supply of $VELO is 400M. Weekly emissions started at 15M $VELO (3.75% of the initial supply) on June 4th 2022 and decay at 1% per week (epoch). With the release of v2 on 22nd of June 2023, the emissions were reset back to 15M. $veVELO holders receive a rebase proportional to epoch LP emissions and the ratio of $veVELO to $VELO supply, thus reducing vote power dilution for $veVELO! The weekly rebase amount is calculated with the following formula: (veVELO.totalSupply ÷ VELO.totalsupply)³ × 0.5 × Emissions $veVELO supply does not affect weekly emissions distributed to liquidity providers. Score Received: 1/1

Initial Allocation

Definition: Disclosed information explaining the launch and initial supply that includes: the total number of tokens issued, the category of the recipient (team, investor, foundation, community), the total supply of the token and if it is capped, and the initial vesting schedule. Weighting

0: No initial allocation schedule is provided.
1: An initial allocation schedule is provided, but some information is absent.
2: A complete initial allocation schedule is provided.

Total genesis mint: 400mm VELO. Of this, 90% was immediately locked as veVELO. Community: 240M (60%) Partner Protocols: 96M (24%) Velodrome Foundation: 40M (10%) Optimism: 20M (5%) Genesis Liquidity Pool: 4M (1%) Score Received: 2/2

Vesting Insider Tokens

Definition: All Insider Token allocations (team, investor, foundation) must be transparent, per the disclosed Initial Allocation. If vesting occurs at a custodian, clearly disclose the employee categories and associated vesting schedules clearly in your documentation. Weighting

0: None of the these areas are clearly documented.
1: Some of these areas are clearly documented.
2: Most of these areas are clearly documented.
3: All areas are clearly documented.

All allocated insider tokens are defined in the initial distribution; there are no ‘unissued tokensʼ, as all emissions are generated permissionlessly and immutably, with ultimate determination by the Velo Fed. There is no extraordinary mint authority. All tokens arevesting onchain, of which 100% are currently vested https://defillama.com/unlocks/aerodrome Score Received: 3/3

Labelled Unissued Token Wallets

Definition: Addresses that hold any Unissued Tokens (e.g. foundation, future contributors, treasury) must be publicly labelled (address listed in docs) and be held in distinct wallets. This includes the foundation allocation. The party (e.g. team, foundation, DAO) that controls the funds must also be disclosed. Weighting

0: No wallets labeled. No ownership disclosure.
1.5: Some wallets are labeled, but the info is partial, unclear, or outdated. Categories may overlap.
3: 100% of relevant wallets are labeled and verifiable, with wallet ownership disclosed.

All allocated insider tokens are defined in the initial distribution; there are no ‘unissued tokens’, as all emissions are generated permissionlessly and immutably, with ultimate determination by the Velo Fed. There is no extraordinary mint authority. Team wallet: VELO pools vote power: 0x2A8951eFCD40529Dd6eDb3149CCbE4E3cE7d053d Foundation wallet: 0x78415b05Ecbd63b68C277387aA5683Bbe2bD1BD8 Score Received: 3/3

Airdrop Process

Definition: The project must disclose all airdrop eligibility criteria clearly and provide a full CSV list of recipients, including addresses and amount received. Weighting

0: Airdrop process is opaque or arbitrary.
1: Some criteria are disclosed, but details are incomplete, unclear, or hard to access. The recipient list may be provided, but not in an auditable format.
2: All criteria are fully disclosed, and the recipient list is clear, accessible, and auditable.

240M (60%) $VELO tokens were distributed to the people who have played the biggest role in incubating Velodrome and those likeliest to contribute to its long-term success, including:

$WEVE holders (27%, 108M $VELO)
$OP network users (18%, 72M $VELO)
3755 $VELO/wallet — Addresses qualified as [Repeat Optimism Users]https://community.optimism.io/docs/governance/airdrop-1/#optimism-early-adopters
Cross-chain DeFi users (15%, 60M $VELO):
3500 $VELO/wallet — Curve Protocol wallets with a 1450+ days (maximum) $veCRV lock time
3000 $VELO/wallet — Convex Protocol lockers of $vlCVX since new lock contract deployment
3000 $VELO/wallet — Treasure DAO Genesis Mine $MAGIC stakers for 1- and 3-month periods
2000 $VELO/wallet — Platypus Protocol stakers with $vePTP and $PTP balance
500 $VELO/wallet — Redacted Cartel participants in genesis Dutch auction who didn't sell their $BTRFLY
500 $VELO/wallet — Eminence Finance wallets affected with EMN, eAAVE, eLINK, eYFI, eSNX or eCRV Our airdrop was so transparent that a community member went ahead and created an alternative claim frontend. The list of qualifying wallets plus code to claim them can be foundhere: https://github.com/gunboatsss/velo-alt-claim-frontend/blob/main/airdrop.json Score Received: 2/2

Locked Staking Reward to Insiders

Definition: Disclose information on insiders (Team, Investors, Foundation, Advisors) tokens that are locked and can earn rewards. Weighting

0: None of these areas are clearly documented.
1.5: Some of these areas are clearly documented.
3: All areas are clearly documented.

There is no functional distinction in permissions or functionality between any of veVELO’s holders, regardless of affiliation with Dromos. That is, there are no insiders. Score Received: 3/3

Future Token Issuance

Definition: The project commits that any future token issuance (e.g., minting or emissions outside scheduled vesting) will be publicly disclosed and justified on an official platform (e.g., governance forum, blog, or docs). Weighting

0: No public disclosure of token issuance.
1: Issuance is announced but lacks detail, is disclosed late, or is not in a permanent, verifiable location.
2: All token issuances are disclosed before or at issuance with full details (amount, reason, recipient, context) in an official, permanent public channel.

As discussed above, all VELO emissions are generated permissionlessly and immutability on a schedule defined in the following image, available at velodrome.finance/docs. The initial supply of VELO is 400M. Weekly emissions began at 15M VELO (3.75% of the initial supply) on June 4, 2022, with a 1% decay per week. On the release of v2 (June 22, 2023), emissions were reset back to 15M. veVELO holders receive a rebase proportional to: Epoch LP emissions, and The ratio of veVELO to VELO supply → This reduces voting power dilution for veVELO holders. When weekly emissions drop below 5M (~0.3% of total supply), the VELO FED will automatically replace the existing schedule, following a simple set of rules: veVELO holders will vote each epoch on 1 of 3 options increase emissions by 0.01% of total supply (0.52% annualized) decrease emissions by 0.01% of total supply (0.52% annualized) maintain emissions fixed The winning vote will be determined by simple majority. If a increase or decrease is selected, the emission rate will change one full epoch after the vote A max emission rate will be set at 1% of total supply per week (52% annualized) and a min rate at 0.01% per week (0.52% annualized). Score Received: 2/2

Future & Related Token Launches

Definition: The team discloses all tokens launched by its key team members in the past and explicitly lays out its philosophy around launching new tokens, related to the project or otherwise. (e.g. "We do not plan to launch additional tokens" or "Any additional tokens will be given 1:1 to existing token holders who can then vote on proposals submitted by the management team.") Weighting

0: Language around new tokens is vague, non-committal, or missing entirely.
1: Plans around additional tokens are defined clearly. The team explains its past reasoning around token transactions and bridges from these transactions to its existing policy.
2: The Team represents that it will not launch additional tokens.

The founding members of Dromos contributed to two other protocols, veDAO and Aerodrome, and designed the token launches for Velodrome and Aerodrome. In both these cases, an overwhelming amount of control of the new protocols was allocated to previous protocols’ holders.

When veDAO, a Solidly subDAO, was sunset following Solidly’s collapse, veDAO tokenholders received both the DAO’s USDC treasury and an allocation of liquid VELO amounting collectively to 27% of the initial supply of Velodrome, a wholly new, unrelated project (the Velodrome Foundation received 10% supply).
On Aerodrome’s launch, as discussed above, veVELO holders received 40% of the initial supply of AERO, locked as veAERO. Although we cannot predict whether Dromos will ever launch new tokens, we can say that we have always sought to maximize value to existing stakeholders, regardless of affiliation. Indeed, because Dromos’ primary revenue generation is derived from veVELO and veAERO positions—not from token sales—it is highly aligned with stakeholders. Score Received: 1/2

Transactions & Market Structure

Insider & Related Person Transactions

Definition: The project commits to disclosing any material Related Party & Insider Transaction within 30 days and includes: The nature of the transaction, the Related Person, the basis on which the person is a Related Person, and the number of tokens involved in the transaction. This includes tokens issued by the foundation. Weighting

0: The project does not commit to disclosing related party transactions within 30 days.
3: The project commits to disclosing related party transactions within 30 days.

We commit to disclosing related party transactions within 30 days. We have never undertaken any such transactions and have no plans to do so. Where the Velodrome Foundations contract with Dromos contributors for certain services, any such contracts are the product of arms length negotiation and payment in USD or USDC. Score Received: 3/3

Prior Token Sales & Fundraising

Definition: Disclosed information of previous fundraising rounds, material OTC rounds to investors, or discounted market maker sales involving the Project and its Token that includes: the date of sale, number of tokens sold, and the vesting schedule of these tokens. The Project commits to disclosing any material OTC deal involving token sales and purchases by the foundation within 30 days. Weighting

0: No prior sales are disclosed.
1: All prior sales are disclosed, but terms are absent.
2: All prior sales are disclosed with terms provided.

No organization, whether Dromos or the Foundations, has ever sold tokens. We fully intend never to sell any AERO or VELO, nor does Dromos or the Foundations maintain liquid AERO or VELO treasuries for potential future sales or grants. We have never entered into any OTC transaction of any kind. Any investor or partner that has acquired tokens has done so on the open market. Score Received: 2/2

Transparent Market Maker Deals & Exchange Listings

Definition: Projects must disclose key details of market making and centralized exchange agreements affecting token liquidity, including: names of all market makers & centralized exchanges involved, the token allocation for each (as % of total supply), and the duration of each agreement. Weighting

0: No public information on market makers (MM) or centralized exchanges (CEX)
1: Some MM or/and CEX details are disclosed, but not all three elements are provided.
2: All three key elements are fully disclosed for MM & CEX.

We contract with Flowdesk on a retainer basis for market making services on centralized exchanges. No VELO tokens are granted or loaned to Flowdesk. This relationship is renewed annually in July. We have never entered a listing agreement with any centralized exchange; in fact, several listings were done without our prior knowledge. Flowdesk provides services for Binance, Coinbase, OKEX, Huobi, and Kraken. Flowdesk currently receives approximately 25,000 USDC per month for its services. Score Received: 2/2

Financial Disclosure

Disclosure of Assets and Cash Flow

Definition: The Project commits to providing updates to token holders on a quarterly basis via forum posts, live dashboards, or reports that cover core project KPIs, changes to Token supply or allocations, and disclosure of top line revenue and expenses. The Project may engage third‑party contractors to prepare and deliver these updates. Weighting

0: The project does not commit to disclosing Token Holder Relations Reports.
3: The project commits to disclosing Token Holder Relations Reports.

We commit to holding organized tokenholder updates in the near future and view this as best practice for any organization with public stakeholders. Score Received: 3/3

Public Token Holder Relations Reports

Definition: The foundation's assets or working capital are held onchain and publicly labelled, providing the ability to track asset holdings, revenue, and expenses. Or, the foundation publishes a quarterly, publicly available financial report of its assets, working capital, revenue and expenses. Weighting

0: Foundation wallets are not publicly labeled.
1: Treasury wallets are tagged, but revenue and expense flows are incomplete or fragmented.
2: Wallets that touch any assets and revenue streams are labelled onchain, with clear, traceable expenses. Quarterly reports detailing assets, revenue, and expenses are provided.

Primary team wallet: VELO pools vote power: 0x2A8951eFCD40529Dd6eDb3149CCbE4E3cE7d053d Dromos treasury wallet: 0x2B642c9609f9a174393F5014e34D1fB06e92Bb14 Legacy OP grant wallet: oeth: 0xb074ec6c37659525EEf2Fb44478077901F878012 Current OP grant wallet: 0x3b5a0Fc12f8fd8B26d251F28258D1d172F930f8A Primary foundation wallet: 0x78415b05Ecbd63b68C277387aA5683Bbe2bD1BD8 Score Received: 1/2

This Token Transparency Filing is provided for general informational purposes only. Blockworks reviews completeness only and does not verify or warrant the accuracy of individual answers. Velodrome Finance is solely responsible for the content, accuracy, and legality of its disclosures.