Altcoins, blockchain, ICO, DeFi, Metaverse, Web 3.0. These are just a few buzzwords and bubbles that, at some point or another, were trending in the cryptocurrency world. Countless projects have been created with the goal of improving some of those sectors, with many still relentlessly working on their progress despite the ravaging bear market.
Velas (VLX) is one of those projects. It is mostly looking at the combination of Web 3.0 and blockchain technology, however, it is deeply connected to several other subsectors of the cryptocurrency world. Question is, which ones? That will be the topic of todays’ article.
What is Velas?
Velas (VLX) is an open-sourced blockchain ecosystem built on Solana that aims to provide best qualities of both centralized and decentralized solutions to its users. Velas is a platform that addresses the issues of scalability while making sure that state-of-the-art cryptography, developing consensus protocols and easy-to-use interface are all put in place to provide seamless experience for everyone.
The goal of this project is to create a community-governed ecosystem for Web 3.0, thanks to integration of world-changing technology products on the platform to improve the lives of the people around the globe. All of this is done in a trustless, decentralized and self-governed manner thanks to its VLX token.
Velas is not only built on the Solana blockchain, but it also has additional functionality connected to Ethereum Virtual Machine (EVM). This unique combination makes the platform extremely versatile. Additionally, it provides for cross-chain functionalities that allow Ethereum-based applications to also operate on Velas.
Moreover, it allows Velas blockchain to process over 50,000 transactions per second (TPS) while supporting different programming languages. Combined with a low transaction fees and seamless user experience, Velas put itself in a brilliant position for the future growth and development amongst other market competitors, once the mass adoption of Web 3.0 comes.
The mission of this project, as well as the main reason for its creation, can thus be simply summarised as follows. To integrate the world-changing technology products and services to improve the lives of people all over the world, while making the internet free again. To help with this, Velas wants to exploit disruptive technologies such as blockchain and Web 3.0, to bring a decentralized and self-governed future to its users.
Velas and the blockchain trilemma
In short, the blockchain trilemma is a problem connected to cryptocurrencies, in which no entity can provide decentralization, security and scalability in its best possible ways. In order to provide any two of these qualities, one must always sacrifice the third. For instance, having a fully decentralized and secured system means that the scalability of it will be rather weak compared to more centralized or less secure systems.
Velas has decided to try to solve this through its consensus mechanism, which is described below. Tackling this problem is one of the most challenging and difficult tasks in the cryptocurrency world. In fact, many believe that it is not possible to solve this issue, which only highlights how ambitious the team behind this project is. However, its consensus mechanism should help with it.
Velas AIDPoS
DPoS, Delegated Proof-of-Stake consensus mechanism is something that Velas used for a while. However, the current blockchain uses an improved technology, known as AIDPoS (Artificial Intelligent Delegated Proof-of-Stake). This algorithm automatically adjusts the configuration of the blockchain so that it allows for not only decentralization and the best possible performance at all times, hence scalability, but also the best security.
Velas uses a so-called “recommender” algorithm for this. It serves as an “AI guardian” that is watching over the whole network at all times and detects anomalies in the nodes. If that happens, the AI automatically adjusts all the parameters to help with the best performance of the blockchain.
Moreover, the whole complex system also contains an analysis module, which identifies and evaluates correlations, relationships and patterns between internal datasets based on historical data. Thanks to this, new parameters and adjustments to the current state of the blockchain are recommended, so that the network’s efficiency improves.
Velas Vault + security
To provide for this, Velas has clearly stated that security will be one of its main priorities. That is why the team has developed its own passwordless authentication system. It allows users to securely access different services without the need of a password only thanks to the usage of Velas Account. Moreover, to strengthen the security, Velas also introduced unique authorisation quotas for risk minimisation. For those, who would want to utilise different authentication solutions, the project is capable of using Google or Apple Authentication.
The Velas account is actually a much more complicated authenticator. Here is just a short overview of several features and tools it uses:
- No passwords, no break-ins — usage of biometric authentication on the user’s devices is the only thing that is needed to confirm a login or a transaction in Velas Account.
- Overview — 360° overview of all connected apps gives the owner the ability to terminate any session or revoke permission of any app at any time, bringing the power over the account directly to the user of the app.
- Seed phrases — for those who are more experienced, Velas Account provides the option of backing the account via seed phrase. Newcomers will be pleased to hear the simple login without the need to manage private keys is also possible, but for advanced users seed phrase is more viable as it enhances the security.
Through these, and several other features, Velas Account allows for the best interaction and use of the application, without sacrificing the security or privacy of the user.
Tokenomics
We have mentioned the VLX token a few times before, but we have not yet explored the tokenomics of it. The token is used for staking, with two options for investors. Either they can create their own pool and thus become a validator, or they can join an already existing pool, thus becoming a delegator.
To become a validator the user needs to have at least 1 million VLX tokens. Becoming a delegator is much easier, with only 1 VLX token needed. Thanks to the AI Delegated Proof-of-Stake (AIDPoS), the delegators can vote on potential validators. This is done through staking the tokens on them, which logically leads to increasing the chance of becoming a validator.
However, for anyone who wants to stake their VLX token and wants to become either a validator or delegator, there is a small warning. VLX has a token slashing system, which means that in case the entity acts maliciously, they will lose their tokens. This is done automatically, with the tokens being removed and later on destroyed, if the malicious behaviour is detected. Slashing function thus works as a security check and incentivises all the participants in the network to behave according to the rules.
Moreover, the voting rights of Velas’ token are more extensive. As the whitepaper describes, holders of VLX token can vote on the next product the team will place a priority on, which only highlights that the VLX token aims to be community-driven.
Yet, it has other use cases too. It is, for instance, used as a transaction and payment token in the whole ecosystem. It can be viewed as the primary unit of account for payments as well as the fees. VLX also enables block producers to achieve consensus in the network, thus, allowing them to earn staking rewards for creating blocks.
Conclusion
Velas definitely belongs to the category of more technologically challenging cryptocurrencies. That is mostly due to the fact that it tries to solve a very difficult problem known as the blockchain trilemma, which according to many, is unsolvable.
On top of that Velas is trying to create a community that would be able to utilise its VLX token to the best. With these clearly difficult and very ambitious goals, one can only hope that Velas will not lose sight of what it aims to do, since doing so, would be probably the end for this ambitious, and currently rather interesting project.
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