Velodrome is an AMM designed as the trading and liquidity marketplace on Optimism network, launching on May 31st 2022.
Their mission is to be the liquidity base layer of Optimism, allowing users to trade digital assets in a secure way, with very low fees and low slippage.
As an AMM adapted from Solidly, Velodrome shares certain features with AMMs like Uniswap, with certain modifications:
trading fee of 0.02%
near-zero slippage on uncorrelated or tightly correlated digital assets
route trades through stable and volatile asset pairs
no-upkeep, flashloan-proof, 30 minute time-weighted average price (TWAP) with direct quoting support
It incorporates elements of Curve, Solidly and Votium with ve(3,3) tokenomoics.

Solidly inspired Velodrome

Velodrome was inspired by Solidly, which was designed as a next-gen AMM optimized to facilitate the swapping of both correlated and uncorrelated assets. Similar to Curve, those who lock their tokens are able to vote to steer emissions to desired pools and receive a cut of protocol fee revenue.

However, unlike Curve, where CRV stakers could stake CRV and direct future CRV emissions to

non-productive pools which didn’t produce fees, Solidly was initially made to focus on

incentivizing trading fees rather than passive liquidity.

Vote lockers on Solidly would receive 100% of fees for only the pools they voted for, and this
behaviour incentivizes the highest fee-earning pools.
Solidly’s launch failed due to many reasons, including bugs, a bad emissions structure that was overly front-loaded and poorly distributed, and more.

Velodrome brings Solidly to Optimism

Velodrome takes some of the best parts of Solidly and brings them to Optimism, while addressing some of the key issues with Solidly.
For instance, it will distribute its native token $VELO to protocols and users aligned with its mission. It has improved bribes and incentives that's similar to Votium, where all fees, bribes and rebases go to $veVELO voters.

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