“Velocity is a measure of the amount of work a Team can tackle during a single Sprint and is the key metric in Scrum. Velocity is calculated at the end of the Sprint by totaling the Points for all fully completed User Stories.” – Scrum Inc

Velocity is a simple but powerful method for accurately measuring the rate at which the scrum development teams consistently deliver business value. Velocity is measured in the same units as feature estimates, whether this is STORY points, days, ideal days, or hours that the Scrum team delivers - all of which are considered acceptable. It is a metric which can predict how much work a team can complete in sprint TIME. 

Velocity in AGILE is the total number of points delivered in a sprint. For example, if a team COMMITS 30 points worth of stories in a sprint and by the end, they are able to deliver only 25 points then their velocity will be 25 points and not 30 points. Hence, velocity is the total points delivered and NOT the total points committed. The velocity helps the teams to predict the amount of work they can commit as a team, it also helps when we do our product increment planning in a SCALED Agile Framework.