Aerodrome

Market Making

Aerodrome is an AMM designed to serve as Base's central liquidity hub, combining a liquidity incentive engine and vote-lock governance model. Aerodrome inherits the latest features from Velodrome V2.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Aerodrome serves to be the central trading and liquidity hub on Base chain and was incubated by the Velodrome team. It inherits the latest features from Velodrome V2.
What we like less
Liquidity providers (LPs) on Aerodrome are only rewarded in inflationary protocol emissions (paid in AERO). The protocol has not yet introduced a concentrated liquidity model but is on the roadmap.
What it means for you
Offers you a top decentralized exchange (DEX) on Base to generate yield through trading and bribe fees.
Information
Exploit/Hacks
None
Info
  • Website
  • Token: AERO
  • Tags: Market Making
Key Metrics
  • TVL: $625.5M (Rank #33)
  • TVL Ranking by Market Making: #0
  • Blockchain: Base
  • Chain TVL
    • Base: $625.51M
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; Spearbit audited in July 2023
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Latest protocol version launched in 2023; maturity over six months reduces technical risk as smart contracts are moderately battle-tested
  • Top 5% by total value locked reduces risk
  • Core contracts require on-chain voting for parameter updates
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • At least one minor governance issue documented
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to decentralized exchanges (DEXs), such as impermanent loss
Things to know about Aerodrome

How Aerodrome works

Aerodrome leverages Curve's stableswap DEX design with its native AERO token emitted on a weekly basis and used to reward Aerodrome LPs. AERO holders can lock their tokens (up to maximum of 4 years) on the platform to receive veAERO and participate in governance, which includes voting on which liquidity pools should receive AERO emissions. Aerodrome offers two kinds of pools: variable pools for uncorrelated assets and stable pools for pegged assets. Stable pools leverage the same Automated Market Maker (AMM) design as Curve's stableswap invariant and variable pools use the standard constant product AMM formula (like Uniswap V2).

How Aerodrome makes money

Aerodrome makes money through protocol fees currently set at 0.02% for each swap within variable and stable pools. These pools can be assigned different trading fees by veAERO holders. veAERO holders vote on which liquidity pools receive AERO rewards, and pools earn proportionally to the voting power they accrue per week. veAERO holders earn trading fees generated by the pools they voted for, proportional to their voting power.

How you make money on Aerodrome

You earn AERO emissions for providing liquidity on Aerodrome. You can also stake AERO (veAERO) to earn trading fees. veAERO holders also earn bribe fees paid to the pools they voted for, as well as non-dilutive rebase emissions.

Aerodrome Pools
Aerodrome ETH-USD Market Making
29.9%
Yield
$99M
TVL
Risk
C
Protocol
Aerodrome
Chain
Base
Aerodrome ETH Market Making
11.1%
Yield
$13M
TVL
Risk
C
Protocol
Aerodrome
Chain
Base