# Velora Launches VLR Token, Overhauling DeFi Governance and Incentives ∞ Web3

**Published:** 2025-09-18
**Categories:** Web3

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![The image displays a close-up of futuristic, transparent geometric objects, including a prominent segmented sphere and a partially visible cuboid, both featuring intricate blue internal glowing patterns. These structures are set against a backdrop of metallic, high-tech panels, suggesting an advanced technological environment](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-architecture-cryptographic-primitives-blockchain-network-infrastructure.jpeg)

![A textured white sphere floats adjacent to a complex metallic mechanism, surrounded by swirling masses of blue and white particulate matter. The polished silver components of the machinery feature cylindrical shapes and intricate gear-like elements, set against a soft blue background](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-protocol-engine-processing-tokenomics-and-network-throughput.jpeg)

## Briefing

Velora, the [cross-chain trading](https://incrypthos.com/news/cross-chain-trading/) protocol formerly known as ParaSwap, has initiated a comprehensive tokenomics overhaul with the launch of its new VLR token, replacing the legacy PSP token. This strategic move fundamentally redefines the protocol’s incentive structure, consolidating governance, staking, and rewards into a unified VLR-based system. The primary consequence for the DeFi vertical is a sharpened focus on sustainable value accrual, directly tying token holder rewards to protocol revenue.

This shift aims to enhance participant alignment and long-term ecosystem health. The protocol’s robust traction is evidenced by a [cumulative trading volume](https://incrypthos.com/web3/pump-fun-dominates-memecoin-sector-with-1-billion-daily-volume/) exceeding $125 billion, with monthly volume reaching $7 billion in August.

![A close-up view reveals an intricate, tightly interwoven structure composed of metallic blue and silver tubular and angular components. The smooth blue elements are interspersed with silver connectors and supports, creating a dense, complex technological assembly](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-interoperability-pathways-securing-digital-asset-transactions.jpeg)

## Context

The [decentralized finance](https://incrypthos.com/news/decentralized-finance/) landscape has long grappled with fragmented token utility and complex incentive models, often leading to diluted governance power and inefficient capital allocation. Prior to this event, many protocols utilized disparate tokens or mechanisms for governance, staking, and liquidity provision, creating friction for users and obscuring the direct value proposition of participation. This often resulted in a product gap where the economic benefits of protocol usage were not seamlessly integrated with token ownership, hindering sustained engagement and the clear articulation of a protocol’s strategic advantage. 

![The image displays an abstract winter scene featuring various geometric shapes, birch logs, and spheres, all partially covered in snow and reflected on a pristine surface. Dominant colors are deep blue and white, creating a clean, modern aesthetic](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-elements-frosty-web3-infrastructure-staking-nodes.jpeg)

## Analysis

The introduction of Velora’s VLR token directly alters the application layer’s governance participation and user incentive structures. By deactivating the previous PSP token’s governance, staking, and rewards functions and migrating them to VLR, Velora establishes a singular, cohesive economic primitive. This change streamlines the user journey for value accrual, creating a direct chain of cause and effect ∞ active participation in the protocol’s success, through VLR staking, translates into rewards derived from actual [protocol revenue](https://incrypthos.com/news/protocol-revenue/).

This model is designed to foster a more aligned and engaged community, incentivizing long-term holding and active [governance](https://incrypthos.com/news/governance/). Competing protocols employing older, more fragmented tokenomics may face pressure to adapt, as Velora’s unified approach offers a clearer, more direct pathway for token holders to benefit from the protocol’s operational success.

![A detailed render presents a complex metallic mechanism firmly embedded within a textured, porous blue material. The central focus is a silver-toned, multi-layered component featuring a prominent helical structure, suggesting intricate engineering](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-technology-core-consensus-mechanism.jpeg)

## Parameters

- **New [Token](https://incrypthos.com/news/token/) Name** ∞ VLR 

- **Previous Token Name** ∞ PSP 

- **Migration Ratio** ∞ 1:1 from PSP, sePSP1, sePSP2 to VLR 

- **[Migration Window](https://incrypthos.com/web3/makerdao-initiates-endgame-migration-rebrands-to-sky-launches-usds-stablecoin/)** ∞ At least one year, with additional rewards for migration before December 16th 

- **Key Feature** ∞ Unified [staking mechanism](https://incrypthos.com/news/staking-mechanism/) with rewards tied to protocol revenue 

- **[Cumulative Trading](https://incrypthos.com/web3/avantis-launches-derivatives-trading-on-base-secures-major-funding/) Volume** ∞ Over $125 billion 

- **Monthly [Trading Volume](https://incrypthos.com/news/trading-volume/) (August)** ∞ $7 billion 

![The image displays granular blue and white material flowing through transparent, curved channels, interacting with metallic components and a clear sphere. A mechanical claw-like structure holds a white disc, while a thin rod with a small sphere extends over the white granular substance](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-data-stream-oracle-mechanisms-and-tokenomics.jpeg)

## Outlook

The VLR launch positions Velora for a new phase of ecosystem growth, emphasizing a robust and transparent value-capture mechanism. The [unified staking](https://incrypthos.com/tech/solana-network-extensions-enable-unified-application-specific-blockspace/) and revenue-sharing model could become a foundational building block for other dApps seeking to refine their tokenomics, potentially leading to increased adoption of similar models across the DeFi landscape. The extended migration window and early incentives reflect a strategic focus on community transition and long-term token holder alignment. This innovation could be copied by competitors, driving a broader trend towards more integrated and revenue-centric token designs, thereby enhancing the overall capital efficiency and sustainability of the decentralized application layer. 

**Velora’s VLR token launch represents a critical evolution in DeFi tokenomics, establishing a direct, revenue-aligned incentive model that strengthens protocol sustainability and user participation.**

Signal Acquired from ∞ <a href="https://www.panewslab.com/en/articles/41b2c227-7ed5-4f1d-849e-ded54de62848?utm_source=incrypthos.com&utm_medium=referral&utm_campaign=noo-engine.com" target="_blank" rel="nofollow">PANews (citing The Block)</a>

## Glossary

<a href="https://incrypthos.com/news/cross-chain-trading/" class="glossary-item-box">

## cross-chain trading 

Definition ∞ 'Cross-Chain Trading' enables the exchange of digital assets between different blockchain networks without requiring a centralized intermediary. </a><a href="https://incrypthos.com/web3/pump-fun-dominates-memecoin-sector-with-1-billion-daily-volume/" class="glossary-item-box">

## cumulative trading volume 

Pump. </a><a href="https://incrypthos.com/news/decentralized-finance/" class="glossary-item-box">

## decentralized finance 

Definition ∞ Decentralized finance, often abbreviated as DeFi, is a system of financial services built on blockchain technology that operates without central intermediaries. </a><a href="https://incrypthos.com/news/protocol-revenue/" class="glossary-item-box">

## protocol revenue 

Definition ∞ Protocol revenue refers to the income generated by a decentralized protocol through its operational activities. </a><a href="https://incrypthos.com/news/governance/" class="glossary-item-box">

## governance 

Definition ∞ Governance refers to the systems, processes, and rules by which an entity or system is directed and controlled. </a><a href="https://incrypthos.com/news/token/" class="glossary-item-box">

## token 

Definition ∞ A token is a unit of value issued by a project on a blockchain, representing an asset, utility, or right. </a><a href="https://incrypthos.com/web3/makerdao-initiates-endgame-migration-rebrands-to-sky-launches-usds-stablecoin/" class="glossary-item-box">

## migration window 

MakerDAO's strategic pivot to a new blockchain and its rebrand to Sky with the USDS stablecoin reshapes DeFi's interoperability and governance paradigms. </a><a href="https://incrypthos.com/news/staking-mechanism/" class="glossary-item-box">

## staking mechanism 

Definition ∞ A staking mechanism is a process within certain blockchain networks where token holders lock up their digital assets to support the network's operations and security. </a><a href="https://incrypthos.com/web3/avantis-launches-derivatives-trading-on-base-secures-major-funding/" class="glossary-item-box">

## cumulative trading 

Avantis' debut on Base establishes a high-throughput, secure on-chain derivatives platform, enhancing capital efficiency and expanding trading primitives within the Layer 2 ecosystem. </a><a href="https://incrypthos.com/news/trading-volume/" class="glossary-item-box">

## trading volume 

Definition ∞ Trading volume represents the total number of units of a particular asset that have been exchanged over a specific period. </a><a href="https://incrypthos.com/tech/solana-network-extensions-enable-unified-application-specific-blockspace/" class="glossary-item-box">

## unified staking 

Solana introduces modular, L1-integrated network extensions, providing bespoke execution environments that enhance specialization without fragmenting core liquidity. </a>

**Tags:** [Web3 Infrastructure](https://incrypthos.com/news/web3-infrastructure/), [Token Migration](https://incrypthos.com/news/token-migration/), [Staking Mechanism](https://incrypthos.com/news/staking-mechanism/), [Cross-Chain Trading](https://incrypthos.com/news/cross-chain-trading/), [Tokenomics](https://incrypthos.com/news/tokenomics/), [Ecosystem Upgrade](https://incrypthos.com/news/ecosystem-upgrade/)	

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**Tags:** [Cross-Chain Trading](https://incrypthos.com/news/cross-chain-trading/), [Decentralized Finance](https://incrypthos.com/news/decentralized-finance/), [DeFi Governance](https://incrypthos.com/news/defi-governance/), [Ecosystem Upgrade](https://incrypthos.com/news/ecosystem-upgrade/), [Liquidity Incentives](https://incrypthos.com/news/liquidity-incentives/), [Protocol Revenue](https://incrypthos.com/news/protocol-revenue/), [Staking Mechanism](https://incrypthos.com/news/staking-mechanism/), [Token Migration](https://incrypthos.com/news/token-migration/), [Tokenomics](https://incrypthos.com/news/tokenomics/), [Web3 Infrastructure](https://incrypthos.com/news/web3-infrastructure/)

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**Original URL:** https://incrypthos.com/web3/velora-launches-vlr-token-overhauling-defi-governance-and-incentives/
