Aerodrome
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.
- Website
- Token: AERO
- Tags: Market Making
- TVL: $709.5M (Rank #31)
- TVL Ranking by Market Making: #0
- Blockchain: Base
- Chain TVL
- Base: $709.47M
- Code reviewed by at least one experienced auditor; Spearbit audited in July 2023
- Anonymous team reduces transparency
- No documented protocol hacks since launch
- 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
- No death spiral concerns
- This protocol is susceptible to risks related to decentralized exchanges (DEXs), such as impermanent loss
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.
