Tokenomics
1. Design Principles
Align incentives among traders, portfolio managers, long‑term backers and the DAO
Attach tangible value to $VELVET via fee sharing & buy‑backs
Bootstrap usage through capped emissions that decline as organic revenue grows
2. Velvet Token Stack at a Glance
$VELVET is the main token of the Velvet ecosystem, which unlocks utility once staked as veVELVET.
veVELVET is the vote-escrowed version of $VELVET. Users can stake their $VELVET tokens to get veVELVET. The longer the lock, the higher the amount of veVELVET received. To encourage continuous locking and sustained participation from stakeholders, the veVELVET balance declines over time until it reaches zero at the conclusion of the initial locking period. It can be increased by restarting the locking period.
veVELVET stakers enjoy:
Real yield with $VELVET rewards ($VELVET bought from the market with a share of the revenue earned by Velvet platform each week)
$VELVET emissions to bootstrap Velvet ecosystem activity (based on the Gems balance - staking & usage of Velvet platform)
Velvet fee discounts according to tiers
Increased fee-sharing from referrals
Additional rewards allocated from Velvet ecosystem participants to veVELVET stakers (e.g., from new launches & partners)
Voting rights on major Velvet DAO decisions (e.g., new integrations, fee distribution, etc.)
In the future veVELVET will also be used to vote for $VELVET emission allocation across vaults. Vault managers will be able to set up "bribes" incentivizing tokenholders to vote for their vaults to receive higher rewards. The tokenholders will receive additional emissions based on how the vaults they voted for performed (and the size of the "bribes").
Velvet Unicorn token ($VU) is a payment (“gas”) token for AI Co-Pilot and agentic strategies on Velvet. Users will pay VU for inference: ⅓ of every VU call is burned, ⅓ goes to treasury for R&D and ⅓ distributed to veVELVET stakers as in a form of $VELVET rewards
3. veVELVET: Locking, Boost & Governance
Lock Range:
1 week → 200 weeks, 200 weeks = max‑ve (1 VLV → 1 ve).
Linear Decay:
veVELVET balance decreases towards lock expiry; UI can auto‑relock if user opts‑in.
$VELVET staking rewards
veVELVET stakers receive $VELVET rewards
$VELVET rewards calculated based on the Gems balance (a function of the staked amount and activity on Velvet)
Additional $VELVET rewards (real yield)
veVELVET stakers also receive additional $VELVET generated from fees earned during the epoch (trading fees, AI inference fee sharing, vault management fees, rewards from partners, etc)
4. Revenue Split & Real Yield
Revenue from the protocol fees will be split as follows:
50 % → swapped to $VELVET & paid out to veVELVET stakers (as outlined above) 50 % → transferred to DAO Treasury
5. Incentive Programs
Launchpad Daily Runner Drops: % of every new token supply reserved based on the amount of Gems (function of staked amount & activity on Velvet)
Trading Fee Discounts: Based on the proportion of total veVELVET, users will receive trading fee discounts when using the platform
Treasury Management Fees: share of revenue from AI Treasury Management products will be passed onto veVELVET holders
Featured Portfolio / Trending Token: 50% of fees earned from users who want to feature their portfolio or trend on Velvet will go to veVELVET stakers
Launchpad, Daily Runners, and Structured Products with Liquidity: VELVET will be the designated trading pair of all tokens created on Velvet
Agentic Portfolios: For automated management will need to have veVELVET at all times to keep the agent running
6. Launch Allocation & Unlock Schedule
6.1 Token Allocation
6.2 Details & Vesting.
Early Backers
~15% of the supply is reserved to be distributed to the earliest backers (with a part of it already allocated to Binance Labs, Selini Capital, Cointelegraph Ventures, Blockchain Founders Fund, PAKA funds, Mucker Capital, FunFair Ventures and other initial investors) to bring top-tier partners supporting the launch and scaling of Velvet DAO.
Early Backers have a 1-year cliff followed by a 2.5-year linear vesting.
Community Round
~0.53% of the supply is reserved for the Tachyon community participated in the Echo community round
The participants have an initial 5% unlock followed by a 3 months cliff & a 2-year linear vesting
Binance Wallet IDO
2% of the supply is reserved for a Binance Wallet IDO.
Reserved for Future Investments
~4.5% of supply is reserved for future investments.
Wallet Marketing
0.2% supply is reserved for a marketing campaign among top Web3 wallets.
Foundation Treasury
~18% of the supply is reserved for the DAO Treasury, which will be managed by the community through a decentralized autonomous organization (DAO). The tokens in the treasury will be used to fund any operating expenses of the DAO, including future development, security audits, internal growth initiatives, legal support and more.
Ecosystem & Community
~17.5% of the supply is reserved for an ecosystem fund, which will be used to support and incentivize developers, partners, and projects that contribute to the Velvet DAO ecosystem. This fund will be managed by the DAO community through a transparent grant process.
The Growth Fund
5% of the supply is reserved to incentivize contributions towards ecosystem growth. One of the main initiatives is the Referral program which will heavily reward people for bringing new users to the platform.
Team & Advisors
20% of the supply is reserved for the team to engage them in the long term success of Velvet DAO.
The tokens are allocated to the team with a 1-year cliff followed by a 3-year linear vesting.
Liquidity Provision
5% of the supply is reserved for liquidity provision, with a majority of it to be used to provide liquidity for $VELVET on decentralized exchanges & a small allocation for market making on CEXes. This will ensure that there is enough liquidity for users to easily trade the token.
Airdrop & Staking Rewards
5% of the supply is reserved for the initial airdrop & staking rewards for veVELVET holders to bootstrap initial decentralization and incentivize stakeholders to lock their tokens. By the time the first rewards are distributed the Velvet DAO will be sufficiently decentralized to make further decisions regarding staking rewards and allocate an additional amount from the ecosystem fund or treasury if necessary.
6.3 Emission Schedule
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