Velas (VLX), former Ferrari crypto sponsor, struggles to gain market share

Velas (VLX), the former high-flying Ferrari sponsor, is struggling to gain market share in the blockchain industry. While the VLX token price has jumped by over 202% from its lowest level in 2022, it remains 97% below its all-time high. Its market cap stood at over $40 million.

Velas came to the spotlight in 2021 at the height of the crypto and meme stocks rally. At the time, investors believed that the network, which promised fast speeds and low transaction costs, would be the next big alternative to Ethereum. 

While Ethereum’s transactions per second stood at about 30, Velas would process 50,000. Its average transaction fee is $0.00001, much lower than that of Ethereum and other chains. As its VLX token surged, the total market cap to over $1.2 billion.

Velas sought to grow its market share by partnering with Ferrari, one of the most iconic teams in the grid. As a sponsor, it secured a highly popular space at the rear wing. Most importantly, that sponsorship came after the successful 2021 season, which was the most viewed season in decades.

However, the partnership did not work out well for both sides, and Ferrari terminated it in 2022. Velas also did not grow its market share as it had expected. According to its website, it has only 23 projects in its ecosystem.

And according to DeFi Llama, it only has 12 DeFi projects in the ecosystem with a combined Total Value Locked (TVL) of $2.68 million. The biggest dApp in the ecosystem is WagyuSwap, which has $1.18 million in TVL. It only has two games – Warlands and Velhalla – in its ecosystem.

To a large extent, Velas has been beaten by several newer blockchain projects. For example, Base, which was launched in 2023 by Coinbase, has a TVL of over $450 million. Similarly, it has been beaten by projects like Sui and Manta.

This performance raises questions about marketing in the crypto industry. Tezos, which has partnered with RedBull Racing and Manchester United, has struggled to gain market share. Similarly, Crypto.com, which has outspent most companies in marketing, still has a negligible market share in the crypto exchange industry.

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