Velodrome Finance (VELO) Price Prediction

Deep Dive

1. Aero Merger Dilution Risk (Bearish Impact)

Overview:
The November 2025 merger of Velodrome and Aerodrome into Aero allocated only 5.5% of the new token supply to VELO holders, compared to 94.5% for AERO holders. This reflects Velodrome’s smaller Total Value Locked ($55M vs. Aerodrome’s $479M) and could trigger sell pressure as VELO holders exit positions post-transition (The Defiant).

What this means:
The skewed allocation risks short-term price declines as VELO’s utility diminishes within the merged ecosystem. Historical data shows VELO dropped ~13% post-announcement (AMBCrypto), though long-term gains depend on Aero capturing Layer 2 DEX dominance.

2. Emissions Schedule vs. veVELO Lockups (Mixed Impact)

Overview:
Velodrome’s tokenomics combine inflationary emissions (15M VELO weekly, decaying 1%/epoch) with a vote-lock mechanism where 55% of supply is locked for ~3.6 years on average. Over 14,000 veVELO holders earn protocol fees, creating a supply squeeze (Velodrome).

What this means:
While locked tokens reduce sell pressure, emissions still dilute holders by ~3.75% weekly. The rebate formula for veVELO holders mitigates this, but price recovery hinges on demand outpacing new supply – a challenge given VELO’s 82% yearly drop.

3. Superchain Integration & Volume Growth (Bullish Impact)

Overview:
Velodrome processed $12B+ volume in 2025, doubling 2024’s total, driven by cross-chain swaps via SuperSwaps and dominance across 8+ OP Stack chains. Its TVL ranks #3 on Optimism, with key pairs like ETH/USDC offering 300%+ APRs (Velodrome).

What this means:
Rising adoption as Optimism’s liquidity hub could boost fee revenue and veVELO rewards, incentivizing longer locks. However, competition from protocols like Etherex’s REX33 model (no long-term locks) threatens Velodrome’s ve(3,3) flywheel.

Conclusion

VELO’s price trajectory hinges on Aero’s post-merger traction, emissions discipline, and Superchain activity. While dilution risks dominate near-term sentiment, Velodrome’s entrenched role in Optimism’s ecosystem offers a recovery path if Aero gains momentum. Will veVELO lock rates stabilize as Aero launches in Q2 2026?