High velocity isn't liquidity. It's a red flag. Tokens with velocity >30 experience 3x higher drawdowns. Why? Game theory. High velocity = users treating it as hot potato, not holding for utility. It signals: Weak incentive alignment Farm-and-dump dynamics Unsustainable emissions Healthy velocity: 8-15 for utility tokens Warning zone: >20 Death spiral: >30 If you're evaluating projects, velocity tells you more than TVL. TVL can be rented. Velocity reveals real user behavior.