Velodrome

Velodrome Finance, at its core, is a solution for protocols on Optimism to properly incentivize liquidity for their own use cases. Building on top of the groundwork laid out by Solidly, our team has addressed that first iteration's core issues to realize its full potential.

What Happened to Veldrome Lately?

On Aug. 4, a team-owned wallet used for operational expenses — including salaries — was suddenly compromised to the tune of some $350,000.Velodrome said in a update that the attacker managed to drain the funds before the team could transfer the remaining assets to a treasury multi-signature wallet.

In this post we will be looking for velodrome health after this accident. I create 3 metrics on Velodrome with a description for each that showcase traction and success in a data-driven manner to see how healthy is this project?

Method

Flipside Crypto provided a separate schema for this platform, Using tables of Velodrome schema I was able to analyse Velodrome finance’s behavior. Most of charts divided into two time periods, Before and after stolen funds to see Velodrome condition after it’s compromised.

Swap transactions on velodrome was constant and steady between June 15th to July 15th and started to grow until a day before they got compromised.

One day after velodrome got hacked they lost huge number of swap transactions. On August 4th, Velodrome had 36.5K swaps and Aug 5 this number turned to just 1,659 transactions but after this day swaps got increased and recovered with good amount as you can see on above chart.

I took a look at the swappers volume as well. Correlation between them is predictable as swappers number got significant decreased one day after their wallet compromised but as you can see the green bars on graph Velodrome got it’s volume back just one day after.

Another metric I checked out is Usd volume of VELO tokens that locked (deposit and withdrawn) on Velodrome over time by users in order to get more voting power and higher rewards.

Above chart shows this metric on two time period which first is before stolen funds and second duration is after their wallet got compromised. On August 4th amount of VELO that locked on Velodrome protocol is 145K USD, One day after funds stolen Usd amount VELO dropped by huge and reached to 5K USD. Locked volume got back a little bit after this day but comparing with swap volume I must say people are still keep avoiding from depositing VELO on protocol.

According to Velodrome Finance docs Any $VELO holder can vote-escrow their tokens and receive a $veVELO (also known as veNFT) in exchange. The lock period can be up to 4 years, $veVELO holders receive protocol fees, bribes, rebases, and governance power.

$veVELO holders decide which liquidity pools receive emissions in a given epoch by voting on their preferred liquidity pool gauges. $VELO emissions will be distributed proportionally to the total votes a liquidity pool receives. In return, voters receive 100% of the trading fees and bribes collected through the liquidity pool they vote for.

Here are voting transactions and voters number graphs on Velodrome. Both parameters lost volume day after protocol compromised and recovered like locked volume but even better.

Last metric I took a look into it was liquidity statistics such as number of LPers , USD volume of LP and transactions numbers as deposit and withdrawn from Pools. Number of liquidity providers decreased from 347 people to only 18 on day after funds stolen from Velodrome. USD volume of deposit and withdrawn from liquidity pools has the same conidtion and it’s reached to 119K USD from huge amount of 14M USD. Both volume of LPers and USD deposit and withdrawn from pools increased 2-3 days after hack.

Conclusion

On all metrics we investigated, Velodrome lost volume after their wallet compromised but this protocol gained and recovered almost on all these metrics one or two days afer.

Between these metrics, transactions related to voting on Velodrome along with voters has gained better and higher compared to others.