Vela Exchange Review: Promising Derivatives Trading Platform On Arbitrum

October 18, 2023 - Around 10 mins mins to read

Along with the growth of centralized exchanges (CEXs), the decentralized finance (DeFi) industry has also attracted a large number of participants with huge potential. Decentralized exchanges (DEXs) are DeFi products designed to meet those needs. Among them is Vela Exchange, a product of the Arbitrum ecosystem that has been attracting the attention of the community recently. Let’s learn more about this project through the Vela Exchange Review article.

Vela Exchange Review: Promising Derivatives Trading Platform On Arbitrum

What is Vela Exchange?

Vela Exchange is an Arbitrum-based decentralized exchange for perpetual futures contracts and spots.

Vela Exchange was formerly known as Dexpools, an OTC trading-only protocol. Since we aim to build a brighter future, the team relaunched to Vela Exchange in October 2022, keeping the OTC part but shifting the protocol to concentrate on the growing spot and derivatives trading.

The exchange is carefully developed to assure asset safety and transaction speed, and the project also provides for the future expansion of options and derivatives trading capabilities.

Simultaneously, Vela’s incentive system assures fair trade. As a consequence, the process of regulating token supply and incentives becomes more efficient. Moreover, this balance aids in maintaining preferred liquidity and trade provisioning levels.

At the same time, because the principal is completely composed of USDC, Vela Exchange can provide a wide range of trading targets. In theory, as long as the oracle machine supports and has a certain depth, it can be traded on it.

Currently, Vela Exchange provides three types of transactions: cryptocurrency (BTC, ETH, DOGE, SOL, MATIC, AVAX), foreign exchange (Euro, British Pound, Japanese Yen), and crypto market value (USDC total market value contract will be launched soon).

Although perpetual trading is the exchange’s initial offering, it is aimed at providing traders with a “reliable home” for trading cryptocurrencies and other items. Items with a high degree of leverage. This objective might be described as the ultimate goal that the Vela team strives to achieve. Vela Exchange Review article will continue to explore the project’s products.

Vela Exchange products

Perpetual exchange

Vela supports a wide range of assets, including cryptocurrency, forex, and market capitalization. Each asset class will have a distinct Funding Rate and Open Interest. When the liquidity pool expands, Vela will explore providing other currency pairings depending on community demand.

A USDC deposit is required to initiate a position in Vela when trading futures.

Vela’s overall trading volume has surpassed $4.7 billion since its inception.

Spot exchange

This is a platform for exchanging, buying, and selling spot tokens operating under the orderbook model. Spot trading is relatively quick, and slippage is low.

OTC P2P

The Peer-to-Peer direct token exchange platform is compatible with any EVM-enabled blockchain. This platform enables two persons to swap tokens directly, eliminating issues like as slippage and large transaction costs that AMMs face.

How does it work?

Liquidity Provider (LP)

VLP is a token that is created from USDC and deposited by users to offer liquidity for Vela. Customers may withdraw USDC three days after making a deposit.

You may stake to earn from protocol income + VLP price difference if the trader loses transaction + eVela bonus when minting VLP.

Trader

Trade BTC, ETH, DOGE, and other cryptocurrencies with 30x leverage.

Forex Trading – Leverage up to 100x on EUR, GBP, and JPY

Business model

The profit of the protocol is derived from spot transaction fees and perpeptuals.

Why does Vela attract the attention of the community?

Lately, the market has recovered, and projects in the #realyield trend have seen the most increase in the crypto market.
The verified protocol will airdrop to traders to attract the first users; the higher the volume, the more airdrops will be received.
Vela has launched the event “Hyper VLP awards” in order to attract initial liquidity.
LP is 100% backed by USDC, lowering the risk of price swings.
There are several features: linked orders, multiple take profits on the same investment (like CEX, but few DEXs have this feature)
Notifications in real time
The overall transaction cost as reported by the community, is somewhat lower than those of major rivals such as GMX and GNS.
The team is discovered to have been built by a team with expertise in developing dApps.

Features

Vela Exchange offers a robust leveraged trading platform built on a hybrid of on-chain and off-chain architecture. An ideal pairing with cloud storage allows customers to maintain their own assets without losing speed or dependability.

Leveraged positions

Traders using Vela Exchange may open long or short bets with up to 100x leverage on certain asset classes in USD. The ecosystem’s unique vStream price feed store aggregates asset values based on predictive data sources.

Spot or triggered orders may be used to construct positions. At the same time, Vela will manage your holdings using the best risk management tactics available. Jobs established may have many orders connected with them. They will be activated efficiently by authorized traders.

Collateral Management

Vela Exchange has a vault that is entirely backed by USDC stablecoin. To trade on Vela, you must first deposit a particular amount of USDC onto the platform. You may credit USD on the exchange while making a deposit. This sum will only appear in your account as dollars. As the trading platform grows, new stablecoins other than USDC may be introduced, making the stablecoin deposit procedure more versatile.

Advanced Position Management

Traders may use a number of sophisticated trading methods established by Vela’s Triggers or Immediate. Risk management has never been simpler on a decentralized exchange, it may be argued. Among the notable characteristics are:

Make a Limit Order and a Trailing Order.
Make a profit.
Stopping Loss.
Trailing stops.
Change the collateral.

Multi-chain Deposits

Vela has introduced Multi-chain Deposits. This tool enables users to easily and rapidly deposit, withdraw, trade tokens, and mint VLP on a variety of blockchains. Multi-chain Deposits is a collaboration between Vela, Axelar, and Squid that helps when users do not need to transfer money manually, reducing time and transaction costs.

Vela Stream price feeds

This is a customized data price source that enables Vela Exchange to collect data from any permitted supplier, such as Chainlink, CEXs, or corporate data providers. After the Vela Exchange platform is finished, the development team will use the Vela Stream service to bring in additional data partners to generate price stability as well as new assets with trading demands.

Fiat On/Off Ramps

Vela has collaborated with Transak to provide a fiat and cryptocurrency exchange interface directly on the exchange. Trading assets from real life to crypto and vice versa has become more straightforward and simple for traders.

API Endpoints

API Endpoints may be used by Vela traders and partners to automate the trading process.

Get notifications

Traders may sign up for SMS or email notifications sent by Vela. Traders who activate alerts will get essential information about pricing or key data in a timely manner. All alerts are maintained by the secure servers of Vela Exchange and may be enabled at any moment.

Refer to get a reward

Vela traders may earn excellent benefits by sharing platform referral links.

User-friendly platform

Vela Exchange also includes a nice, easy-to-use design that makes it simple for users to locate platform functionalities. The software also includes simple graphical tools and statistics charts for monitoring the pricing situation and fast-executing transactions.

In addition to concentrating on user-friendliness, the Vela team created a number of appealing trading campaigns to entice traders to trade on Vela.

VELA token

The Vela Exchange ecosystem’s native token is the VELA token. VELA may be obtained by providing liquidity on supported DEXs. Moreover, holders may stake VELA to gain incentives on the site.

At the moment, Vela Exchange supports four kinds of tokens:

VELA is a utility token. Investors may get VELA via providing liquidity at associated AMMs, receiving and unlocking eVELA (Fee Sharing), or purchasing directly at DEXs.
eVELA (escrow VELA): a token that represents VELA that has been staked. The initiative uses eVELA as a reward token and distributes income to users. eVELA cannot be transferred or exchanged and can only be used to unlock VELA (1:1 ratio) that vests continuously for a year.
VLP: Users deposit and stake stablecoins (USDC, USDT, and DAI) into the project to acquire VLP, the project’s stablecoin. Users who own and stake VLPs will split transaction costs.
vUSD: stablecoin created when USDC, USDT, or DAI are deposited into perpetuals Exchange for trading. Upon withdrawing, vUSD will be computed at the same rate as the original stablecoins.

VELA token key metrics

Token Name: Vela Token
Ticker: VELA
Blockchain: Arbitrum
Token Contract: 0x088cd8f5ef3652623c22d48b1605dcfe860cd704
Token Type: Utility
Total Supply: 10,000,000 VELA
Circulating Supply: 7,772,560 VELA

Token Allocation

Community Incentives: 30%
Growth Fund: 19%
DXP Bridging: 18%
Core Team: 16%
Investors & Partners: 10%
Marketing: 5%
Advisors: 2%

Use cases

Users will earn a lower transaction cost while staking VELA and eVELA tokens into the platform. By staking 500-500,000 VELA or eVELA, the discount ratio will vary from 2% to 50%.

Fees

Vela Exchange charges a 0.1% handling fee for the opening/closing of crypto transactions (equivalent to GMX), and a 0.01% handling fee for foreign exchange transactions. You can get a 2%-50% handling fee discount by staking the platform token VELA.

Fee income is distributed in the following proportions:

50% allocated to the VLP pool (USDC);
10% allocated to VLP stakers (eVELA);
15% allocated to VELA stakers (5% in USDC, 10% in eVELA);
5% allocated to VELA stakers
25% enters the treasury.

Roadmap

In 2023:

Integration of an OTC platform.
Implement interactive solutions.
Spot Market launch.
Asset support extending.
Better transaction management.
API enhancements for BOT integrators.

In 2024:

Support for multiple chains.
The release of trade analysis tools.
Install tax and financial dashboards.

Core Team

Travis Skweres (Founder): Travis has been working in the Blockchain industry since 2012. He founded Portal Finance, which was bought by Coinbase. In addition, before founding Vela Exchange, Travis worked as a Principal Engineer at BCG, a prominent technology consulting firm with offices in 45 major cities.

Dan Peng (Co-Founder): Dan worked with Travis at BCG and also as a product manager at Heartstorm, a technology solutions and consulting company.

Conclusion of Vela Exchange Review

The recent expansion of the Arbitrum ecosystem, including the GMX flagship, as well as the shortcomings of CEX such as FTX, has warmed up Decentialized Perps Trading items.

Overall, Vela Exchange integrates various GMX techniques with centralized exchange services, offers spot, perpetual contracts, and OTC transactions, and facilitates cross-chain asset deposits.

Simultaneously, it may accommodate a broad variety of trade variations and target a wider range of user groups. Vela Exchange’s public beta is coming to an end. The official version will include more trading pairs, new functions, improved infrastructure, release incentives, and so on, according to the official announcement. It’s worth anticipating the follow-up performance. Hopefully, the Vela Exchange Review article has helped you gain more useful information about the project.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Other Reviews

Vela Exchange Review: Promising Derivatives Trading Platform On Arbitrum

Along with the growth of centralized exchanges (CEXs), the decentralized finance (DeFi) industry has also attracted a large number of participants with huge potential. Decentralized exchanges (DEXs) are DeFi products designed to meet those needs. Among them is Vela Exchange, a product of the Arbitrum ecosystem that has been attracting the attention of the community recently. Let’s learn more about this project through the Vela Exchange Review article.

What is Vela Exchange?

Vela Exchange is an Arbitrum-based decentralized exchange for perpetual futures contracts and spots.

The exchange is carefully developed to assure asset safety and transaction speed, and the project also provides for the future expansion of options and derivatives trading capabilities.