Aerodrome Finance

Aerodrome Finance is an automated market maker (AMM) and decentralized exchange (DEX) built on Base, the Ethereum Layer 2 network developed by Coinbase, and positioned as that ecosystem's central liquidity hub. The protocol was officially launched on 28 August 2023 as a fork of Velodrome Finance, the Optimism-based DEX, and inherits the feature set of Velodrome V2, including concentrated liquidity support, dynamic fees and emissions, expanded governance and a liquidity pool registry.

The protocol combines several liquidity structures in one venue: the Uniswap V2 constant-product AMM, Curve-style StableSwap pools for stable assets, Uniswap V3-style concentrated liquidity, and Convex-style performance mining incentives, marketed as a "meta" DEX without additional fee-extracting layers. It operates a dual-token system: AERO, an ERC-20 token emitted to liquidity providers, and veAERO, an ERC-721 vote-escrow position created by locking AERO for up to four years. veAERO holders vote on how emissions are distributed across pools and receive trading fees, incentives (formerly "bribes") and rebases; sources state 100% of trading fees are directed to lockers. Rewards are distributed in epochs based on the votes each pool accumulates. Initial supply was 500 million AERO, of which 450 million was distributed as vote-locked veAERO.

Aerodrome hosts on-chain pools for ETH, BTC and FX (USD/EUR) pairs and functions as the venue where projects deploying on Base bootstrap liquidity for their token pairs. Because Base has no native token, AERO functions as the ecosystem incentive token alongside ETH for gas and OP for chain governance.