### What is Velodrome Finance?

Velodrome Finance is a decentralised derivatives trading platform and Automated Market Maker (AMM) designed to serve as the central trading and liquidity marketplace on the Optimism Network. The platform aims to facilitate protocols on Optimism in properly incentivising liquidity for their particular use cases.

### How does Velodrome Finance work?

Velodrome Finance operates on the Optimism Network, leveraging the Ethereum blockchain. It uses an Automated Market Maker (AMM) model to maximise capital efficiency and ensure optimal price execution. Smart contracts are employed to manage liquidity pools and trading activities, allowing users to engage in decentralised token swaps, liquidity provision, and yield farming.

### What are the potential use cases for Velodrome Finance?

The potential use cases for Velodrome Finance include:
- **Liquidity Provision**: Users can contribute to liquidity pools and earn a share of trading fees.
- **Yield Farming**: Staking liquidity provider tokens for additional reward opportunities.
- **Decentralised Governance**: Token holders participate in decision-making processes via votes.
- **Efficient Trading**: Facilitating low-cost and fast token trading.
- **Hedging Strategies**: Incorporating liquidity strategies to hedge against market volatility.

### What is the history of Velodrome Finance?

Velodrome Finance was founded by VeDAO, following the collapse of the Solidly protocol by Andre Cronje. The VeDAO team utilised lessons from Solidly and Cronje's open-source code to create Velodrome on the Optimism Network. Key milestones include its launch in June 2022 and achieving significant growth within the Optimism ecosystem, such as reaching a considerable portion of Total Value Locked (TVL) and partnering with prominent projects.

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