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November 28, 2023

VELO Token Distribution Update

Velo is committed on building our Web3+ ecosystem which is a hybrid solution of centralised and decentralised products and services built upon Web3.0 architecture. As a result of the major changes in Velo’s product offering, we have had to revisit the overall tokenomics and distribution for the project.

For the past year, Velo has been actively focused on launching our flagship product, the Federated Credit eXchange (FCX). We’ve also completed our merger with Evrynet which introduced a lot more utility for $VELO with a strong decentralised finance platform. The combined technologies are the driving force behind innovations for the Web3+ ecosystem which is a hybrid solution of centralised and decentralised products and services built upon Web3.0 architecture that Velo is building, scheduled for launch in Q1’2023.

As a result of the major changes in Velo’s product offering, we have had to revisit the overall tokenomics and distribution for the project. Compounded by unfavourable market conditions, coming up with a positive, revised tokenomics strategy has been an important focus of the team since the merger with Evrynet. Added utility for $VELO means that our original forecasts would be insufficient to support network operation, so this was a critical task to complete for the team leading into 2023.

Our circulating supply data is taken from APIs monitored by CoinMarketCap and CoinGecko and is currently reported to be 1,229,925,317. Based on the previously provided token distribution schedule, the forecast distributed amount should have been 10,785,310,000 by the end of 2022.

However, as part of our proactive efforts to minimise any adverse effect on the token price during this complex period, we have implemented a number of initiatives with investors, early backers and founders, to alter the original expected distribution schedule. We also completed two strategic activities that required provision of $VELO leveraged against escrowed funds to support the project. These came from two key deals being the LDA/Lightnet/Velo partnership that brings valuable support for development of our ecosystem and liquidity for FCX, and the Evrynet acquisition which has catapulted our initiatives in expanding our technology offering to include decentralised products and services and greater utility for $VELO.

As a result of all of the above, we have also readjusted a number of key Treasury and Reserve wallets as well as catering for allowance of the additional strategic partnerships. The positive outcome is that instead of a forecast circulating supply of approximately 10bn $VELO per our original forecast, we will shortly be updating the APIs that CoinMarketCap and CoinGecko which will show an adjusted circulating supply of 4,984,154,050.08.

We’ve also provided a forecast release schedule for known distributions (Fig.1 below) - please note that these figures are subject to change based on business requirements and not to be viewed as final). As we have completed the bulk of the review work required, we will be tracking that circulating supply data is correctly updated weekly based on our internal treasury operation activities.

Fig.1 : End of Year Forecast Token Circulating Supply for Strategic Partners & Advisors (correct as at 1 Dec 2022)

We were able to achieve an approximately 50% reduction to forecast distribution through a number of important adjustments to the original schedule:

  1. XLM swap:
    - From our partnership with Stellar, we were able to offer a token swap for VELO>XLM. The VELO tokens are held by Velo in the Reserve pools and were not redistributed to Stellar.
  2. Delay to distribution schedule:
    - We've increased the planned distribution for founders, and select investors and advisors by up to two years.
    - We are currently negotiating the period of disbursement and will provide further information on this at a later date.
  3. New product roadmap (Web3+ ecosystem) to provide greater utility for VELO:
    - Scheduled for launch in Q1'2023, the inclusion of an exciting range of "Web3+" services and the successful soft launch of FCX has renewed investor confidence in our project initiatives.
    - Augmenting the already live FCX digital asset trading platform (currently trading around US$100mil daily volume on Stellar), we'll be adding:

* On/Off-ramp service:

- Designed to support CBDC which will allow licensed entities to use Velo as a blockchain based clearing house

* Hybrid DEX:

- Centralised exchange functionality in a decentralised environment

* Velo Finance:

- dApp for supporting provision of crypto-centric liquidity and yield farming

* VeloHub:

- Cross-chain bridge that will support token transfers between a number of popular blockchains

* Velo Chain:

- Our own EVM-compatible blockchain to support the ecosystem with near zero fees for transactions on the network.

We will be releasing an updated litepaper going into more detail on the above products in the coming weeks

We also successfully burned 6,000,000,000 VELO this year. This reduces our total supply to 23,999,998,948. We are assessing the possibility of future burns based on the implementation of the above product roadmap. The "Web3+" platform introduces a much greater utility for $VELO with a decentralised finance ecosystem centred around a hybrid DEX and VeloFinance dApp. We need to assess the adoption of the Web3+ ecosystem to properly determine the viability of further burns as the original token supply was based on the need to support a US$6 trillion payments and remittance network.

In the coming weeks we’ll be slowly ramping up on marketing activities to support the Web3+ ecosystem rollout starting January 2023. There will also be a lot more PR activity in Q1’2023 that highlights the new Web3+ ecosystem products. This will culminate with the FCX public availability and Web3+ ecosystem launched to market around the end of Q1. Q2'2023 will then be an important consolidation phase for product stability and security, platform adoption/increase utilisation, volume and liquidity coming into the ecosystem.

We’re looking forward to a very strong recovery and growth period in 2023! With greatly improved communication and engagement with investors and community, a firm commitment to product timelines and “first-time-right” mentality, and updated tokenomics to support our growing financial footprint.