V-cancelling, or velocity cancelling, is a technique that decreases the knockback velocity of moves in certain situations. This is done by pressing the L button or R button a maximum of 3 frames before the hitboxes collide. In order to V-cancel, a player must be in the air, not in hitstun, not in an attack animation, and cannot have pressed the L or R button within the last 40 frames. V-cancelling reduced the initial knockback velocity to .95x the original, generally meaning that the decrease in knockback is around 5%. The difference is small, but can be useful in dire situations.
It was documented by Achilles1515 in September 2015.
Applications
V-cancelling can be used along with other techniques such as DI and Smash DI to reduce your knockback distance. However not being as effective as the other two techniques, V-cancelling can mean the difference between life and death. For example, Fox's up-Smash can kill Falco at 88% on Pokémon Stadium, however with DI and v-cancelling, he can live up to 102%.