Velas (VLX) Down 82% From 2023 High as Formula 1 Sponsorship Fails to Gain Traction

Velas price has been in a strong downward trend in the past few months as the network lost traction among developers. The VLX token was trading at

As the crypto bear market continues to bite, Velas (VLX) has become one of the worst-performing cryptocurrencies in the past few months.

The VLX token price was trading at $0.00719 on Wednesday, which is down by over 82% from its highest point this year. At its peak, VLX was valued at $0.04. It has retreated by almost 100% from its all-time high of $0.39, which was attained in March 2022.

Velas Blockchain woes VLX’s downfall has been a sad situation, especially for a company that sponsored Ferrari, one of the most Formula 1 teams. While the sponsorship size was not made public, it is estimated to be in the millions of dollars.

Recent data shows that Ferrari’s sponsorship revenue across 36 brands in the 2023 season was over $236 million. Its biggest sponsor is Santander, which replaced Velas’ sponsorship spot and is paying $60 million a year.

According to CoinMarketCap, the Velas token is now worth just $18 million, down from an all-time high of $1.8 billion.

To understand Velas’ poor performance, we must first understand what the blockchain does. Velas is a blockchain company that aims to become a better substitute to popular chains like Ethereum, Solana, Avalanche, and Near Protocol. It is a carbon-neutral blockchain known for fast transaction speed and a low cost of just $0.00001 transaction fee. Unlike Ethereum, it can handle over 50,000 transactions per second.

Despite its Formula 1 sponsorship, Velas did not gain traction among developers. Data by DeFi Llama shows that it only attracted 14 DeFi developers and its total value locked has dropped from over $50 million in 2021 to just $1.2 million. Its stablecoin market cap is just $7,000 while its 24-hour volume was $9. It has been passed by newer blockchains like Sui and Sei.

Sports sponsorship in crypto Velas’ performance raises concerns about the growing trend of sport sponsorship among blockchains. To some extent, many blockchain companies that spend a fortune on marketing do not have a bigger edge than those who don’t.

For example, Tezos, a blockchain network that partnered with Red Bull and Manchester United, has failed to gain traction in the DeFi and Non-Fungible Token (NFT) space.

Perhaps, the biggest spender is Crypto.com, which took over Staples Center and renamed it to Crypto.com Arena. It is also one of the top sponsors in Formula 1.

While the company has attracted millions of companies, it is still a smaller brand than companies like Binance, Bybit, and OKX, which spend less. Bybit and OKX sponsor Red Bull and McLaren Racing, respectively.