Velo experienced growth across several key metrics in Q1, including average daily transactions (+255.5%), average daily active addresses (+84.7%), total trustlines (+15.1%), funded trustlines on Stellar (+12.6%), and VELO-denominated TVL (+10.1%).
Velo saw declines in other areas, including circulating market cap (-51.4%), token price (-51.4%), total quarterly fees (-18.2%), and USD-denominated TVL (-47.5%).
Velo expanded its exchange presence with VELO perpetuals launching on Kraken Pro and a listing on Exolix, while also boosting ecosystem activity through a Universe DEX trading competition and a new partnership with Galileo for decentralized marketplace integration.
Velo released a new litepaper regarding their pivot to the PayFi narrative, introducing new products, a stablecoin, and expansion to AI agents, amongst other things.
Primer
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.
Stellar, known for its low-cost and efficient transactions, is the foundation for Velo’s initial infrastructure. Nova, Velo’s EVM-compatible blockchain, allows smart contracts and supports DeFi operations, mainly on Universe, Velo’s hybrid exchange platform. BNB Chain supports Velo Finance and facilitates wallet connections, serving as the primary on-and-off ramp for users within the ecosystem. The Warp bridge allows asset transfers between these various blockchains.
Additionally, 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.
Relative to BTC and ETH, which saw their market caps decline 11.4% and 45.2% QoQ, respectively, Velo recorded a 51.4% QoQ decrease in its circulating market cap, falling from $182.8 million at the end of Q4 2024 to $88.8 million by the end of Q1 2025. VELO’s token price mirrored this trend, declining from $0.02 to $0.01. Despite the contraction, Velo’s market cap rank slightly improved from 373 to 339 by the quarter’s end.
Fees
Fees are generated and summed across BSC. For additional context, 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. Universe, Velo’s hybrid exchange platform, uses both Nova and BSC, with users connecting via BSC but performing internal operations on Nova until funds are withdrawn. Quantum, Velo's remittance network, has not yet been implemented, but will use Stellar. 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 holds no monetary value and, therefore, does not influence the overall QoQ fee trends. A more comprehensive overview can be read here.
After a moderate recovery in Q4 2024, total fees declined 18.2% QoQ in Q1 2025, falling from $2,135 to $1,746. Average daily fees followed a similar trajectory, dropping 16.4% from $23.21 to $19.40. This reversal, coupled with VELO’s falling price, suggests a cooling in network usage.
Network Analysis
Usage
Contrary to fees, Velo’s network activity in Q1 2025 showed strong growth across core usage metrics. Average daily transactions across Nova and BSC increased 255.5% QoQ, jumping from 445 in Q4 to 1,581 in Q1, while average daily active addresses rose 84.7% from 2,363 to 4,364. Peak activity occurred in January, with daily transactions hitting 2,657 on Jan. 19, 2025, and active addresses reaching 19,953 on Jan. 7, 2025.
Breaking it down by chain, Nova led the surge in throughput, with average daily transactions increasing 1,302.1% QoQ from 91 to 1,279. However, Nova’s user participation continued to slide, as average daily active addresses fell 21.3% from 3.9 to 3.1. In contrast, BSC saw a significant uptick in users, with average daily active addresses rising 84.8% from 2,359 to 4,360, even as average daily transactions declined 16.6% from 354 to 295.
Together, these shifts highlight a division in utility: Nova handled more transactional volume, while BSC remained the primary access point for users. As the front-end of Velo Finance, BSC continues to lead in onboarding and engagement.
Trustlines
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 primary driver for trustline activity – has yet to be implemented.
In Q1 2025, total trustlines increased by 15.1% QoQ, rising from 24,160 to 27,812, while funded trustlines grew by 12.6%, increasing from 15,794 to 17,779. This continued growth, albeit at a slightly slower rate than the previous quarter, reflects steady user interest in Stellar-based assets. The narrowing gap between total and funded trustlines suggests a sustained trend of more trustlines being actively used.
Ecosystem Analysis
TVL
Velo’s TVL displayed mixed performance in Q1 2025. USD-denominated TVL declined 47.5% QoQ, falling from $34.7 million in Q4 to $18.2 million, while VELO-denominated TVL increased 10.1%, rising from 1.4 billion VELO to 1.5 billion VELO. As with prior quarters, the Q4 value uses data from Dec. 30, 2024, instead of Dec. 31, 2024, due to inaccurate reporting on the final day. This discrepancy was caused by smart contract changes and has been confirmed by both the Messari Onchain Data team and the Velo team.
General Development and Growth
While Q4 saw major ecosystem growth, Q1 had fewer updates. These events included:
January:
Velo launched a trading competition on Universe, its hybrid DEX, to boost platform engagement and attract new users.
Velo also released a new whitepaper regarding its pivot and focus on the PayFi narrative. The team will expand its current suite of products (e.g., to address RWAs and the supply chain at large), introduce its own stablecoin (i.e., USDV), and update its tokenomics model. Additionally, it will experiment with introducing AI-driven agents to optimize payment routing, manage liquidity, and automate compliance, among other actions.
Closing Summary
The broader crypto market declined in Q1 2025, with BTC and ETH market caps falling 11.4% and 45.2% QoQ, respectively. Velo's performance followed a similar trajectory, with its circulating market cap dropping 51.4% to $88.8 million and its token price falling to $0.012. Despite the contraction, Velo’s market cap rank improved from 373 to 339, reflecting relative strength amid a broader downturn.
Total fees for the quarter fell 18.2% QoQ to $1,746, while average daily fees declined 16.4%, signaling a pullback in transactional revenue. In contrast, usage metrics saw a strong uptick: average daily transactions increased 255.5% to 1,581, and average daily active addresses rose 84.7% to 4,364, primarily driven by activity on Nova. Nova handled more transactional volume, with a 1,302.1% QoQ jump in average daily transactions, while BSC remained the ecosystem’s primary user entry point, with active addresses up 84.8%.
TVL showed mixed trends, with USD-denominated TVL falling 47.5% to $18.2 million and VELO-denominated TVL rising 10.1%, suggesting higher token-based engagement despite declining dollar value. Meanwhile, trustline activity on Stellar continued to grow, with total trustlines up 15.1% and funded trustlines up 12.6%.
Development activity was more limited in Q1 compared to the previous quarter. Still, it featured several notable milestones: (i) VELO perpetuals launched on Kraken Pro, (ii) Universe hosted a trading competition, (iii) VELO was listed on Exolix, (iv) Velo partnered with Galileo to expand into decentralized marketplaces, and (v) the release of the new PayFi litepaper.
This report was commissioned by Velo Labs Technology Limited. All content was produced independently by the author(s) and does not necessarily reflect the opinions of Messari, Inc. or the organization that requested the report. The commissioning organization may have input on the content of the report, but Messari maintains editorial control over the final report to retain data accuracy and objectivity. Author(s) may hold cryptocurrencies named in this report. This report is meant for informational purposes only. It is not meant to serve as investment advice. You should conduct your own research and consult an independent financial, tax, or legal advisor before making any investment decisions. Past performance of any asset is not indicative of future results. Please see our Terms of Service for more information.
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