Why has DeFAI become the new narrative? How does Velvet Capital reshape the on-chain asset management sector?

As the scale of crypto assets surpasses trillions of dollars, efficiently managing on-chain digital asset portfolios has become a core industry challenge. Assets scattered across different blockchains and protocols require individual investors and institutional participants to handle complex manual operations and cross-chain bridging costs. Against this backdrop, Velvet Capital enters the market as an AI-driven on-chain trading and asset management platform, aiming to provide a one-stop solution through the DeFAI architecture.

In June 2026, Velvet Capital’s token VELVET experienced a period of intense price volatility, with weekly gains exceeding 1,300%, drawing widespread attention in the crypto market. However, on-chain data also revealed token transfer activities related to team wallets, shifting market discussion from “technical narrative” to “distribution game.”

Velvet Capital’s Technical Architecture: From Vault Safes to DeFAI Operating System

Velvet Capital positions itself as a DeFAI (DeFi + AI) trading and portfolio management ecosystem, with the core goal of helping users discover trading opportunities, execute investment strategies, and manage digital asset portfolios without relying on centralized intermediaries. The project was developed by a team with deep roots in the crypto industry since 2016, offering comprehensive tools including trading terminals, AI Copilot, asset management solutions, and multi-chain automation strategies.

Technically, Velvet Capital uses a Vault system as the infrastructure for on-chain asset management. Vault allows users to establish and manage digital asset portfolios in a non-custodial manner. After depositing assets, users receive tokens representing their shares, enabling participation in unified investment strategies. Unlike traditional funds that depend on centralized institutions, Vault operates via smart contracts, offering transparency, verifiability, and on-chain settlement. Each vault deploys an independent smart contract, which from an architecture perspective, eliminates security risks associated with shared infrastructure.

On the AI front, Velvet Capital integrates multi-agent AI systems, allowing users to perform market data mining, technical analysis generation, and trade execution through natural language commands. The system supports direct interaction via Telegram, further lowering the barrier to on-chain operations. Currently, Velvet supports trading on multiple blockchains including BNB Chain, Ethereum, Base, Solana, and provides execution APIs for developers to access its asset management infrastructure.

Additionally, Velvet Capital offers white-label solutions, enabling asset management institutions to deploy DeFi vaults under their own brands, either through native applications or customized solutions to serve their client base. This institutional-grade infrastructure positions Velvet as a bridge connecting individual investors and professional asset managers.

VELVET Tokenomics: Dual-Token Architecture and Revenue Sharing Mechanism

The total supply of VELVET is 1 billion tokens, issued according to the ERC-20 standard. Its tokenomics adopts a dual-token model: VELVET and veVELVET. Users can lock VELVET into veVELVET (vote-escrowed version), with longer lock-up periods yielding more veVELVET. The veVELVET balance decays linearly over time, and users can re-lock to extend their governance and revenue rights.

Core rights for veVELVET holders include: protocol revenue dividends (50% of platform fees are converted into VELVET and distributed to veVELVET stakers), VELVET ecosystem incentives, trading fee discounts, additional referral reward sharing, and governance voting rights in Velvet DAO (covering new integrations, fee allocations, and major decisions). In the future, veVELVET will also be used to vote on VELVET emissions distribution across vaults, with vault managers able to set “bribes” to incentivize votes.

Regarding token distribution, based on multiple data sources, the approximate structure is as follows: team and advisors about 20%, foundation vaults about 18.3%, ecosystem and community about 17.5%, early supporters about 14.9%, future launches and marketing about 7%, initial airdrops and staking about 5%. Additional data indicates that the combined allocation to team and shareholders is about 22.5%, ecosystem funds around 25%, and public sale about 10%. The team’s share is subject to a 6-month monthly unlock, releasing about 0.28% of total supply per month; early investors’ shares are unlocked over 5 months at about 0.33% per month. Currently, circulating supply is approximately 248 million tokens, representing 24.83% of the total supply.

Recent Market Dynamics: Liquidity Migration, Price Fluctuations, and On-Chain Data Observation

VELVET was launched on PancakeSwap on July 10, 2025, at an initial price of about $0.037. It reached a historical high of around $0.32 in September 2025, with an annual increase of 398.69%.

Entering 2026, VELVET experienced more pronounced market movements. According to Gate data, as of June 15, 2026, the price was $0.35386, with a 24-hour change of -8.70%, a 7-day increase of 12.97%, a 30-day rise of 183.77%, a 90-day increase of 353.06%, and a 1-year gain of 875.43%. Market sentiment is rated as “neutral.” The 24-hour high was $0.58462, the low $0.30381, with a 24-hour trading volume of $15.59M. The total supply remains at 1 billion tokens, with a market cap of approximately $87.8 million, accounting for about 0.015% of the crypto market.

Notably, between June 3 and June 11, 2026, VELVET underwent a sharp rally, with the price soaring from $0.09 to a peak of $1.65, roughly an 18-fold increase in 8 days. The catalyst was a strategic integration between Velvet Capital and Trade.xyz, which promised to unify global markets including stocks, cryptocurrencies, and commodities into a single app. However, on-chain data tracking shows that during the price surge, wallets associated with the team transferred about $19.8 million worth of VELVET tokens to centralized exchange deposit addresses. Meanwhile, market maker DWF Labs also moved 6.68 million VELVET (about $600,000) to exchanges during this period. The total flow from project-related addresses to exchanges peaked at around $25.8 million. These on-chain activities drew market attention to the token distribution pace.

Additionally, on June 12, 2026, Velvet Capital executed an update—migrating all protocol-owned liquidity (POL) to Aerodrome, the largest decentralized exchange on Base network, with the VELVET/USDC trading pair launched. The migration aimed to concentrate liquidity resources to improve trading depth and execution efficiency for Base ecosystem users, but also introduced single-platform risk—if Aerodrome suffers smart contract vulnerabilities or governance issues, Velvet’s entire liquidity positions could be exposed.

In terms of funding, Velvet Capital completed a $3.7 million raise in July 2025, led by YZi Labs (formerly Binance Labs) and blockchain founders’ funds, with participation from FunFair Ventures, Selini Capital, Gate Labs, DWF Ventures, Cointelegraph Accelerator, among others. The funds are intended to develop an intent-driven DeFAI trading and asset management ecosystem and to facilitate VELVET token issuance.

DeFAI Sector Narrative: Velvet Capital’s Industry Coordinates

The fusion of DeFi and AI is becoming one of the main narratives in the crypto industry during 2025-2026. DeFAI’s essence is introducing AI agents into on-chain finance scenarios, enabling intelligent handling of yield optimization, automation, and risk management tasks. In this sector, Velvet Capital has established a differentiated position through its vertically integrated product architecture—including trading terminals, AI Copilot, vault system, Telegram proxy interface, and execution APIs.

Compared to other DeFAI projects, Velvet Capital’s core features are its Vault mechanism and institutional-grade white-label solutions. Vault is not only a storage tool but also the infrastructure connecting AI agents, portfolio management, and social investing. Asset managers can set fee structures such as management, performance, entry, and exit fees on Velvet. The platform itself takes a share of trading and management fees into its protocol treasury. Security-wise, Velvet Capital has completed audits by PeckShield and ShellBoxes, maintains ongoing bug bounty programs via Immunefi, and integrates Forta real-time security monitoring and OpenZeppelin Defender automated response.

Long-term, Velvet Capital plans multiple directions: expanding from manual trading to AI agent execution, enabling users to discover opportunities, generate strategies, and execute trades via AI workflows; advancing chain abstraction and full-chain trading capabilities; building a dedicated DeFAI infrastructure network to support AI agents, trading apps, and automated strategies at scale; and adding privacy features to enhance user protection and transaction security.

It’s important to note that token lock-up mechanisms and distribution pathways are key factors in whether VELVET can sustain value accumulation. The veVELVET lock decay design encourages ongoing participation rather than short-term speculation. However, on-chain data shows that during rapid price increases, early holders transferring tokens to exchange addresses indicate that even with carefully designed lock-up mechanisms, some early participants are motivated to realize gains based on short-term narratives. This “narrative-driven—on-chain follow-up—exchange inflow” cycle is a common pattern in current crypto markets, not unique to Velvet Capital. For market participants, distinguishing between “fundamental-driven growth” and “short-term narrative-driven price swings” is essential for assessing long-term project value.

Conclusion

Velvet Capital demonstrates a relatively complete technical framework in the DeFAI sector—from on-chain asset management infrastructure via Vault, to AI Copilot and multi-agent trading execution, to scalable institutional-grade white-label solutions. Its tokenomics, including veVELVET lock-up and revenue sharing, form the core of its value proposition. However, recent on-chain data showing early holders transferring tokens to exchanges, along with the risks of concentrated liquidity on a single platform, serve as reminders for market participants to carefully evaluate the project’s fundamentals and token distribution pace. In this early-stage exploration of DeFAI, the sustainability of technological capabilities and economic models will determine whether Velvet Capital can transition from short-term narratives to long-term growth.