What is Velar?

Velar is an inflection point in the journey of DeFi on Bitcoin. Velar is a DeFi liquidity protocol built on Bitcoin via the Stacks smart contract layer solution. As an all-in-one DeFi protocol, Velar will bring a host of DeFi-native features, from token swaps to launchpad infrastructure, to drive the Bitcoin DeFi ecosystem to new heights. Velar opens up the possibility of true DeFi on Bitcoin, thanks to Stacks.

Years ago, DeFi on Bitcoin was a fantasy. Nobody thought it possible because Bitcoin Script is fairly simple, which makes complex smart contracts rather difficult to deploy on the base layer.

Thus, DeFi had to grow on other networks, with Ethereum taking the lion's share. Bitcoin, as of date, is a network with over $500 billion in value, had to take a backseat concerning decentralized finance until now.

Now the time has come for DeFi on Bitcoin to come alive. Sidechains and L2 chains, and other solutions have opened up the ecosystem. Thus, enabling Bitcoin holders to access DeFi applications with Bitcoin transaction finality.

The era of Bitcoin DeFi, the era of Velar!

Velar's Architecture

Velar has a simple yet, sophisticated framework that draws inspiration from all the players in the Bitcoin DeFi ecosystem. The protocol will leverage Bitcoin's base security and transaction finality while utilizing Layer 2 solutions like Stacks to achieve scalability and high transaction throughput. Yet, there's more.

Velar will feature a DEX, liquidity pools, yield farming solutions, staking infrastructure, and a launchpad, each of which can stand alone as an independent DeFi application.

Thanks to Stacks' smart contract capabilities, Velar can build these features over time, according to the project's roadmap. The protocol will look to integrate privacy through a decentralized identity solution while boasting a friendly user interface/experience.

Velar will have a native token, $VELAR, to power its ecosystem and make governance possible. Users, liquidity providers, and developers will participate in governance and help shape the protocol's future. Finally, Velar will host several cryptocurrencies and traditional Fiat money, allowing users to transact with their favorite assets freely.

Our Bitcoin Philosophy

Velar's Bitcoin philosophy is straightforward—Velar aims to create a decentralized financial world using the Bitcoin blockchain as the foundation. At Velar, we seek to provide users with a secure, scalable, and accessible financial system that operates without intermediaries and gives users complete control over their own assets and identity.

First, Bitcoin is the oldest blockchain, running since 2009. The Bitcoin network has never experienced a single downtime since it went live, showing commendable resilience and typifying the blockchain concept perfectly.

Furthermore, Bitcoin stands for decentralization. The network has over 100,000 active miners participating in validating transactions and security, leaving the likelihood of any entity seizing control over it at its lowest. Bitcoin represents freedom for the average person, as it breaks away from all the norms and is a perfect foundation for a decentralized application like Velar.

Finally, Bitcoin is loaded with economic value—hundreds of billions of dollars waiting to be unlocked. With Velar on Stacks, users can put their Bitcoin to work, earn rewards for providing liquidity, access DeFi products, and participate in a decentralized economy.

Bitcoin is the perfect fit for DeFi. In 2009, it was an idea born of passion. Today, Bitcoin is a global currency that even doubles as a store of value. Even with the network's shortcomings, in the aspect of programmability, the success of all cryptocurrencies remains heavily tied to Bitcoin. A blockchain with zero exposure to centralization, the best security, and a global currency is the perfect foundation for any DeFi application.

Why Build on Bitcoin?

This is the most common question anyone would throw at Velar's team today. DeFi on Bitcoin is still in its infancy. Why build on Bitcoin when you can do so elsewhere?

The Problem

Due to Bitcoin’s base layer limitations, there has been a rise in Layer 1 networks, all aiming to solve this problem and improve scalability and speed without compromising security and decentralization. Sadly, most L1 blockchains have sacrificed decentralization to pursue scalability, a total deviation from everything Bitcoin represents.

Building Proof of Stake blockchains with high TPS is the way to go. Although the PoS consensus mechanism is efficient, it is one of the easiest routes away from decentralization. Take ETH, for example. Since the transition from PoW to PoS, the network has become susceptible to centralization. Most validators on Ethereum use AWS cloud services, an incredibly centralized solution.

Institutions are the biggest Ethereum validators due to their possession of infinite resources. Ethereum's likelihood of suffering a 51% attack is increasing. Yet, centralization is not the only challenge facing DeFi on other blockchains. Regulatory and legal battles are catching up to PoS systems, with native tokens being branded as unregistered securities by the SEC.

You may wonder how Bitcoin fares any better; after all, it's a blockchain like every other one.

The Bitcoin Advantage

Bitcoin is a Proof of Work blockchain that rewards miners with new bitcoin (block subsidy + fees) for solving mathematical problems. Decentralization is Bitcoin's greatest strength. Despite the global crackdown on mining activity, Bitcoin has over 100,000 miners contributing to the network with a total hashrate of approx 369.252 Ehash/s. No other blockchain can boast of direct participants anywhere close to this number, making Bitcoin the go-to chain for true decentralization.

With Bitcoin, finality is finality. Upon transaction finality, on-chain data becomes immutable. Bitcoin is also the most secure blockchain network. Its lack of programmability is a plus, as it eliminates support for creating endless loops. With infinite loops, attackers can easily compromise the grid and shut it down in a DOS attack.

Bitcoin is censorship-resistant, completely transparent, and without a central authority. Although entities are actively involved in Bitcoin mining, they cannot take control of the network, no matter how hard they try. The network also boasts the most valuable cryptocurrency as its native coin.

How is all of this good for DeFi and Velar?

For a long time, DeFi on Bitcoin has been limited to wrapped tokens on other networks pegged 1:1 to BTC. Wrapped Bitcoin ($WBTC), an ERC-20 coin, is the most popular variant of native $BTC.

With new solutions like Stacks, users can access a trustless Bitcoin peg without relying on a centralized entity that offers finality on Bitcoin and enable users to move native $BTC to and from the base layer. Velar will utilize Stacks' sBTC as Bitcoin, bringing the value locked in the base layer onto Stacks' application layer for users to interact with DeFi products.

Velar is positioned on Stacks to tap into this immense value and become the central hub for DeFi activity on Bitcoin and Stacks.

Imagine the economic value that will be created by turning Bitcoin into a productive asset on decentralized applications unlocking a massive eruption and utility. The DeFi ecosystem will witness a new renaissance when Bitcoin joins the party, and Velar will be there, marching at the front.

Velar's Vision

At Velar, our vision is broad yet clear. One of our primary goals is to build a truly decentralized financial ecosystem with Bitcoin at its center. As mentioned above, DeFi on Bitcoin has so much potential, and we aim to unearth it. Velar's envisioned DeFi world will be accessible to everyone and secure, thanks to Bitcoin.

True decentralization is possible, and it remains part of the scope of our vision. We look to build a financial world where people can trade and interact with services without third-party interference. We look to a world where an average person can grow their wealth in the absence of inflation, without the threat of government confiscation, and have unbridled access to financial services no matter who they are, where they are, and how much they earn.

In our vision, we see a genuinely global internet-based system with decentralized governance and an underlying trustless mechanism. In this new world, users will enjoy secure, swift, and transparent transactions while retaining control over their assets and privacy. Ultimately, Velar seeks to build an inclusive financial system and empower the average person with the ability to control their financial destiny.