Average velocity is usually calculated after at least 3 completed sprints.
The average velocity is usually calculated by averaging the user story points delivered in the last three completed sprints.
Velocity is usually used to provide a benchmark for the number of user story points committed for the subsequent Sprint.
The team can always commit for more user story points, but the focus should be on optimal utilization of the development team’s time, and a higher preference is given to consistent performance.
Velocity should not be used to compare if the team’s performance is improving over time. But rather watch velocity over time and look at patterns in burn downs which can alert coaches and managers that something is going on, and that they need to investigate.