Aerodrome Finance (AERO) is an innovative decentralized exchange (DEX) and automated market maker (AMM) launched on Base (Coinbase’s L2) in August 2023. Designed as a MetaDEX, it combines the best elements of Velodrome, Curve, and Uniswap to become Base’s central liquidity hub. By offering low fees, low slippage, robust incentives, and a vote-escrow governance model, Aerodrome empowers users with AERO and veAERO tokens to participate actively in the platform’s growth and rewards.
Aerodrome’s Role in the Base Ecosystem
Aerodrome emerged as a Central Liquidity Hub, currently managing over $830 million in TVL, which covers more than half of Base’s DeFi. It supports a wide array of token swaps with low slippage, thanks to its sophisticated pool designs (vAMM, sAMM, and concentrated liquidity via Slipstream).
Its MetaDEX architecture allows integration across various pool types, combining stable and volatile pools with optimized fee structures. Partnerships with aggregators like Odos and Kyber amplify its impact on Base’s trading volumes — Aerodrome accounts for around 56% of DEX volume.
Moreover, Aerodrome supports ecosystem growth: it has boosted native USDC to $150 M TVL, integrated liquid staking tokens like cbETH, and runs Flight School to reward builders using veAERO. This positions Aerodrome at the core of Base’s DeFi expansion.
AERO Tokenomics & Governance
At the heart of Aerodrome lies its dual-token model: AERO (ERC‑20 utility token) and veAERO (ERC‑721 NFT for governance voting via vote-escrow).
Emission Phases: AERO emissions began at 10 M/week, ramped up by +3% per week over the first 14 epochs (Take-off), then decayed by −1% per epoch (Cruise). Once inflation dips below ~9 M/week (~Epoch 67), the Aero Fed empowers veAERO voters to control emission rates between 0.01–1%/week (0.52–52% annually).
Anti‑dilution rebase: veAERO holders receive weekly rebases based on locked supply, protecting voting power and value from inflation.
Governance and rewards: veAERO tokens allow holders to vote on emission distribution, and they receive 100% of trading fees from voted pools.
Strategic Implications & Future Potential
Aerodrome is the first-mover DEX on Base, giving it an edge in capturing liquidity and user activity as Base expands.
Coinbase’s upcoming Base Wallet integration could onboard centralized users directly into Aerodrome, offering frictionless access and free gas, boosting adoption dramatically.
The Slipstream concentrated liquidity upgrade empowers the protocol to support high-volume pools with superior efficiency, boosting trading throughput and fee generation. Current stats are impressive: 70% of Base’s stablecoin volume and $500 M+ in daily ETH/BTC volume, generating $3.1 M in weekly fee rewards for voters.
Risks persist, as AERO’s high inflation (up to ~156% APR initially) may outweigh rewards for non-voting holders. But as emissions taper, Aero Fed can align inflation with revenue, mitigating dilution risks.
