Velodrome V2: The Liquidity Hub for Optimism

Velodrome launched in the heat of the bear market in 2022 and has been quietly building an engaged community, which is made evident by the ~80% veVELO lock rate. V2 laid the groundwork for greater customization over liquidity pool types, an automated voting management, and drastically increased veVELO revenue by removing the hard cap on fees from V1. VELO looks undervalued in relation to some of its peers, but it remains to be seen if the increase in swap fee revenue is sustainable given the fact that higher fees could drive traders to other venues. However, given the AERO airdrop and high veVELO yield, we view VELO as an interesting play to gain exposure to the OP Stack/Base narrative.