In velocity modulation, a track's note velocities are altered by one or more modulator tracks. A velocity modulator track is interpreted as an array of signed offsets, which are added to the note velocities. If a target track has multiple velocity modulators, they're summed. If the offset becomes too large or too small the velocity clips, but otherwise the target's original dynamics are preserved. If negative velocity modulation causes a note's net velocity to be zero, a note off is output.
It's interesting to combine velocity modulations that operate on different time scales, for example a longer modulator that applies a gradual crescendo could be combined with a shorter modulator that applies "ripple" to the velocities.
Velocity modulation can also be applied to a controller track, in which case it offsets the controller value instead of the note velocity.