In this edition, we’re briefing you on Velvet Capital, a DeFi operating system allowing for the creation of onchain investment products.
The project, backed by Binance Labs, aims to abstract away much of the DeFi complexity that institutions may face.
With an ongoing airdrop program and their V2 rolling out recently, it may be interesting to gauge the project’s performance.
Over and out ⬇
Crypto Market Update:
- Top Gainer (24H) in the top 50 mcap: THORChain $RUNE increased in price by 13.2%.
- Top Loser (24H) in the top 50 mcap: LEO Token $LEO is down -1.6%.
- The total crypto market cap has seen a increase by 1.4% to stand at $1.4T.
- BTC dominance in the market is currently at 53.1%.
- Median gas price on Ethereum over the past 24 hours has been 35 gwei.
News
- Binance's CZ Must Stay in U.S.: Changpeng Zhao, Binance founder, is required to remain in the U.S. after pleading guilty, pending his sentencing in February.
- Kronos Research Negotiates with Hacker: After a $25 million theft, Kronos Research offers a 10% bounty to the hacker for the return of stolen funds.
- Coinbase Alerts Users of Bybit-Related Subpoena: Coinbase informs customers about a U.S. regulator's subpoena concerning crypto exchange Bybit.
Project Updates
- dYdX Chain Launches Trading Rewards: The Cosmos-based dYdX Chain begins distributing trading rewards, following the activation of full trading on its decentralized derivatives protocol.
- Chainlink Launches Enhanced Staking v0.2: With a 45 million LINK pool, Chainlink Staking v0.2 aims to diversify participation and enhance network security.
- Google Cloud Joins EigenLayer's Operator Group: Google Cloud participates in EigenLayer's testnet, marking its steady entry into Web3 and staking protocols.
- Aevo Addresses Idle Stables on L2 Bridges: Aevo highlights over $2.5B in stablecoins on L2 bridges earning no yield, teasing an upcoming solution.
- Animoca Brands Invests in TON Network: Animoca Brands becomes the largest validator in the TON blockchain, supporting gaming projects in the ecosystem.
Background on Velvet Capital
Velvet Capital is a DeFi operating system, allowing for the creation of diversified financial products on-chain.
The goal is to make it easy for institutions, hedge funds, DAOs, traders etc. to launch and manage tokenized funds, portfolios, yield farming strategies, and other structured products.
The platform aims to democratize asset management, enhancing choice for public investment in vaults, and the direct integration of asset management on the blockchain.
Velvet is deployed on BSC, with plans to expand to other chains.
Origin of Velvet
Velvet Capital was created in response to the failures of centralized finance (CeFi) platforms and the complexities involved in using decentralized finance (DeFi) platforms.
As a DeFi operating system, Velvet Capital aims to solve the problem of credibility loss in CeFi platforms and the difficulty of using DeFi platforms, especially for professional investors.
After multiple failures of centralized platforms like BlockFi or Celsius and the collapse of FTX, fund managers no longer trust CeFi.
Even though DeFi presents an alternative for fund managers, there are multiple layers of complexity that must be overcome first: funds would need a separate team of smart contract engineers, liquidity is fragmented across multiple chains, they would need to do security audits for every protocol they plan to use, just to name a few…
It is common knowledge that crypto in it’s current state is hard to navigate.
This rings especially true for people who might not be crypto natives, or who have different risk profiles with how they deploy their capital.
Velvet Capital 2023 roadmap
How Velvet Capital Works
The core tooling and infrastructure of Velvet Capital revolves around making it possible to integrate with AMMs, lending protocols and other DeFi primitives.
Velvet relies on a modular architecture that enables all this functionality while also making it possible to fetch prices from an Oracle module or set custom parameters to run a strategy.
There are a few key aspects of the protocol that make Velvet’s vault creation possible:
Tokenization Module facilitates the creation and redemption of tokens from the Omni-chain Vault, with the minting and burning of LP tokens representing the Vault.
Omni-chain Vault enables account abstraction-enabled access control.
Trade Execution Module enables the smart routing of funds by integrating liquidity sources and functionalities of existing infrastructures, such as Solvers, MMs, Aggregators, and DEXes.
Yield Farming Module allows Vault managers to access additional yields from the underlying tokens in their vaults.
Velvet Capital V2
V2, launched in late October, includes a revamped UI.
The project has facilitated 100k+ token transfers, and garnered over 2,200 active users.
The team has also added the ability to deposit and withdraw stablecoins $USDT and $USDC.
V2 makes up ~86% (~$651k) of Velvet Capital’s Total TVL (~$751k).
A significant spike in TVL occurred following Velvet’s V2
Airdrops & Incentives
Velvet has implemented their own points program.
Points programs are rapidly gaining popularity, with numerous DeFi projects on Solana implementing points, and the notorious Blast L2 has implemented points on Ethereum mainnet.
To accommodate their airdrop program, the project has added a new airdrop tracker feature, which allows users to see the daily accrual of airdrop points in their wallets.
Velvet has implanted a referral program, allowing Vault managers and depositors to generate unique referral links, rewarding them for referring new users via airdrops.
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