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The Bitcoin (BTC) blockchain was never intended to accommodate smart contracts, limiting the potential for decentralized applications (DApps) in burgeoning sectors like decentralized finance (DeFi). The launch of the Stacks (STX) Layer 2 platform in 2018 was a major initiative to address this limitation. For the first time ever, DApps to leverage Bitcoin and its security mechanism became feasible, all thanks to the Stacks project.
In 2023, Velar, a leading DeFi app on Stacks, introduced its beta mainnet, offering various services that include automated market maker (AMM)–based swaps and staking. Velar’s DeFi liquidity services utilize Stacks’ smart contracts and enjoy the consensus mechanism and finality of the Bitcoin Layer 1 network — efficiency meets security!
Backed by Bitcoin’s famed security, decentralization and vast but underutilized liquidity, Velar may very well become a major competitor to the established Ethereum (ETH)-based DeFi giants, challenging their dominance in the near future.
Key Takeaways:
Velar (VELAR) is a DeFi platform for the Bitcoin network that leverages the Stacks Layer 2 protocol for its smart contract functionality.
Velar is among the pioneers of Bitcoin DeFi and offers users an AMM-based token swap service, liquidity pool provision, yield farming, staking and an IDO launchpad.
Velar’s testnet, operational in June and July 2023, attracted 165,000 users — the world record for a Bitcoin DeFi testnet. The project launched its beta mainnet in July 2023 and plans a major upgrade and the launch of its native token later in the first half of 2024.
Velar is a liquidity protocol that offers a comprehensive suite of DeFi services on the Bitcoin blockchain via the smart contract–capable Stacks Layer 2 platform. Velar utilizes an AMM liquidity model and offers token swaps, liquidity mining, staking and an Initial DEX Offering (IDO) launchpad.
Velar’s first version, Dharma, debuted its beta mainnet in July 2023, unveiling a liquidity engine modeled after Uniswap (UNI) v2 — one of the most popular AMM engines in the DEX niche. Velar’s team has outlined their vision for the platform’s future versions. The second version, Artha, is a perpetual derivatives exchange that allows up to 20x leverage and features an updated liquidity engine modeled after Uniswap v3. It also offers a new governance model and a cross-chain bridge. Specific features of the third (Kama) and fourth (Moksha) versions will be announced in the future.
Velar is a rare platform that offers a suite of full-fledged DeFi services for Bitcoin’s ecosystem. Its Dharma v1 Testnet, conducted from June 13 to July 20, 2023, attracted 165,000 users — an absolute record for a Bitcoin DeFi testnet and a clear testament to Velar’s big market potential.
Velar utilizes the Stacks Layer 2 (L2) platform’s smart contract functionality to enable its DeFi services. At the same time, the platform is designed to be L2-agnostic, which means that it’s not necessarily limited to Stacks only. The project team has stated that Velar might be enabled on other L2 platforms linked to the Bitcoin network in the future.
Velar features 100% Bitcoin finality, meaning that all the operations related to transaction block ordering and finalization are handled on Bitcoin’s own Layer 1 (L1) network. This ensures that Velar’s transactions are thoroughly protected by the security mechanism and decentralized consensus system offered by Bitcoin, a platform some regard as the most secure among all blockchain networks.
At the same time, the Stacks platform’s smart contract functionality allows Velar to offer sophisticated DeFi functions like AMM pools, a staking mechanism, and liquidity farming. Velar’s current liquidity engine is based on a standard AMM setup. In the next version, Velar Artha, the engine will include an additional functionality for concentrated liquidity. Concentrated liquidity allows users to add funds/liquidity to trading pools within specific price ranges to optimize their liquidity yields.
Velar Dharma, the first and current version of the platform, is a decentralized exchange (DEX) that features five key products available to crypto enthusiasts willing to become Bitcoin DeFi pioneers: token swaps, liquidity provision, staking, yield farming and an IDO launchpad.
The swap service allows you to easily trade cryptocurrencies, taking advantage of low fees and low slippage rates, thanks to the app’s efficient AMM engine. Currently, the exchange is still in the early stages of operation and offers four tokens for swaps — Stacks’ native STX token, bridged versions of BTC and USDC, and Stacks' cat-themed meme coin, LEO. New assets will likely be added to the list as the project matures.
Velar also offers a few different ways of contributing liquidity and earning income from it. You can add liquidity to trading pair pools to earn a share of revenue from swap operations, and earn yields from contributing to the STX liquidity farm. In the future, staking VELAR, the platform’s planned native token, will also allow you to earn rewards and participate in the platform’s governance processes.
Finally, if you’ve ever mused over investing in new tokens that leverage Bitcoin for DeFi, Velar offers an IDO launchpad you might want to check out.
The platform’s native cryptocurrency, the VELAR token, is designed for a variety of functions, which include governance in the future. Its current use cases are liquidity provision, payments for products and services within the app’s ecosystem, and access to premium services, such as priority customer support, DApp discounts and exclusive access to early offers.
The VELAR token’s total and maximum supply is 1 billion, with distribution shares as follows:
35% — Community Rewards
20% — Treasury
20% — Founders and Team
5% — Advisors
15% — Early Purchasers
5% — Airdrop
The VELAR crypto could be a sound investment choice, based on the following:
1. Velar is the first AMM-based DeFi platform for the Bitcoin ecosystem. It offers an efficient liquidity model (similar to the one used by Uniswap v2) and 100% Bitcoin finality, and could leverage its first-mover advantage in this emerging niche.
2. The platform’s planned perpetual derivatives exchange will be another novel product for Bitcoin DeFi users. PerpDEX will support using native BTC as collateral for perpetuals trading, opening up opportunities to tap into at least some of Bitcoin’s vast $1.3 trillion in liquidity — of which virtually none (or only a tiny portion) is currently involved in DeFi.
3. Velar’s enormously successful record-setting testnet in mid-2023 is another clear signal that the platform and its future token hold significant growth potential.
4. Velar's potential is already being recognized in the industry, with the project joining Bitcoin Startup Lab — a leading Bitcoin startup accelerator — in mid-2023.
Nevertheless, as the crypto market is known for its volatility, it’s crucial to conduct thorough research before buying altcoins. Additionally, you may want to consider diversifying your investments with blue chip cryptocurrencies, such as Bitcoin and Ethereum.
Users interested in VELAR can sign up for a Bybit account and trade with Bybit Spot for the VELAR/USDT pair from Apr 3, 12:00 PM UTC, after its listing on the Bybit Launchpad. However, since VELAR is the latest coin listing via Bybit Launchpad, investors who participate in the event being held from Mar 28 to Apr 3, 2024, must adhere to the following requirements:
Only users who have completed the Identity Verification Level 1 Individual or Business requirement are eligible for the Launchpad event.
Users from restricted countries aren’t allowed to use Bybit Launchpad 3.0.
Please note that Identity Verification must be completed before the subscription period begins on Apr 3, 2024, 3:30AM UTC.
We’re currently witnessing the dawn of a new era in the development of the Bitcoin ecosystem, with emerging DeFi opportunities on the horizon. Among the pioneers of the DeFi landscape for Bitcoin, Velar is shaping up as a true leader. Its platform's advantages are numerous — complete Bitcoin finality, the agnostic nature of its L2 setup, an efficient AMM modeled after Uniswap and the variety of services it offers.
Moreover, the upgrade to Velar Artha will introduce innovative features: a perpetuals trading DEX and a concentrated liquidity model. With this impressive suite of services and features, Velar has an excellent chance of becoming the Bitcoin DeFi leader, as well as a serious competitor to Ethereum's DeFi heavyweights. Uniswap and SushiSwap better pay attention!
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