import SVG from "react-inlinesvg";

# About Aerodrome

Aerodrome is the trading and liquidity hub of Base. As the network's leading decentralized exchange (DEX), Aerodrome provides high-efficiency execution for traders, sustainable rewards for liquidity providers, and the most effective infrastructure for bootstrapping and growing liquid markets onchain.

Aerodrome launched on August 28, 2023, without VC backing or token sales. The protocol operates as a zero-leak economy: 100% of the revenue it generates is distributed to the participants who power it.

Aerodrome has no centralized servers or dependencies and runs on immutable smart contracts that were audited by Spearbit and ChainSecurity teams.

In 2026, Aerodrome will merge with Velodrome—the leading DEX on the Optimism Superchain—to become Aero: the unified liquidity layer for all of Ethereum operating on MetaDEX03.

<div id="economics-overview"></div>

## Economics Overview

### AERO

Aerodrome is built around a native token, AERO, that serves two functions:

1. **AERO** (liquid form) is distributed as rewards to liquidity providers
2. **veAERO** (locked form) directs AERO rewards and represents a claim on future exchange revenue

**How the system works, at a glance:**

- AERO tokens are minted each week
- These tokens are streamed to liquidity pools to compensate LPs who prefer a more predictable stream of AERO rewards over a volatile stream of swap fees
- The amount of AERO streaming to each pool is determined by veAERO holders (token operators) who vote for the pools based upon the fees that accrued to the pools over the course of the prior week
- In return for their votes, veAERO token operators earn a share of exchange revenue that’s accrued to the pools they vote for
- Additionally, to attract votes toward specific pools, any user can deposit voting incentives that are paid to token operators who vote for those pools (a key ingredient in bootstrapping liquidity for new tokens)
- Anyone can become a token operator by “locking” their AERO to create veAERO

### System Participants

Aerodrome is a decentralized protocol. This means that anyone can participate in its core functions.

- **Traders** swap tokens on Aerodrome, paying fees on each trade. These fees are the primary source of revenue for the exchange. Traders benefit from deep, productive liquidity that delivers reliable exchange rates and efficient execution.
- **Liquidity providers (LPs)** deposit tokens into pools. In return, LPs earn AERO emissions, a rewards stream decoupled from point-in-time trading fees. Alternatively, LPs can choose to earn swap fees directly.
- **Asset issuers** launch pools and grow liquidity for new and existing tokens, providing liquidity and/or depositing incentives to attract emissions that draw other LPs.
- **veAERO holders (token operators)** vote each week to direct AERO Rewards toward pools. In return for coordinating the network, they earn voting rewards (exchange revenue captured by the pools they vote for).

### Value Distribution

On Aerodrome, all value generated by the protocol is distributed to participants:

- **Token operators** earn 100% of exchange revenue
- **Liquidity providers** earn AERO rewards (if staked) or swap fees (if unstaked)

Exchange revenue is composed of 100% of swap fees from staked liquidity, all voting incentives, and (by default) a small percentage of swap fees generated by unstaked liquidity in certain emissions-eligible pools.

### Economic Engine

At the core of Aerodrome's design is an economic flywheel:

1. Pools that generate the most revenue attract the most votes from token operators
2. Votes direct AERO emissions toward the pool, drawing in LPs who deepen liquidity
3. A deeper pool executes trades more efficiently, handling higher volume at tighter spreads
4. Higher volume generates more fees, pulling in more votes and repeating the cycle

As the flywheel spins, the most productive pools grow deeper, execute better, and generate more revenue with every turn.

### Track Record

As of April 2026, Aerodrome has processed over $185 billion in cumulative trading volume, generated over $270 million in swap fees, and distributed approximately $450+ million in total revenue to token operators.

In 2025, a position of 10,000 veAERO, voted at average efficiency, earned approximately $2,470 in rewards for the year.

> 2025 veAERO revenue figures reflect the results of a position voted at average efficiency. Actual results may vary. Past results are not an indicator of future performance.

### AERO Emissions at a Glance

For Aerodrome to operate, new AERO emissions are distributed each week as LP rewards.

As of April 2026, the current rate of AERO emissions is approximately 10.9% annualized.

veAERO holders determine how AERO emissions are distributed by voting every seven days to allocate across pools.

**Annualized Inflation (%)**

<SVG
  src="/svg/AERO/annualized-inflation.svg"
  className="w-full"
  preserveAspectRatio="xMidYMid meet"
/>

**Other key figures as of April 2026:**

- Total supply: 1.88B AERO
- veAERO locked: ~51% of supply (~958M)
- Avg lock time: ~3.7 years

<div id="protocol-details"></div>

## Protocol Details

Aerodrome is a decentralized exchange. This means that the liquidity powering trades is provided by users who deposit assets into liquidity pools of paired tokens.

Exchange rates are not managed by a central order book. Instead, they are determined algorithmically by the ratio of the two assets in each pool. These underlying algorithms are called AMMs (Automated Market Makers). Aerodrome includes a constant product AMM and a concentrated liquidity AMM design called Slipstream.

Aerodrome is powered by MetaDEX02, the next-generation “DEX OS” (decentralized exchange operating system) designed and engineered by Dromos Labs. It combines industry leading AMMs and innovative integrated functions, with a unified zero-leak economic system that delivers maximum value to all participants.

MetaDEX03 will be released alongside the forthcoming exchange, Aero.

### Epochs: The Timeline

Aerodrome operates on seven-day cycles called epochs.

An epoch starts every Thursday at 00:00 UTC and ends Wednesday at 23:59 UTC. Votes, emissions, fees, and incentives are calculated for each epoch.

Each epoch begins with two things happening simultaneously: accrued exchange revenue from the previous epoch is distributed to token operators as voting rewards, and the rate of AERO emissions to liquidity pools resets.

Throughout an epoch, token operators can cast their votes. All votes must be submitted by Wednesday at 23:00 UTC, one hour before the epoch ends. Votes do not affect the current epoch's emissions, but determine how emissions are distributed in the following epoch.

Each epoch ends with votes being tallied and the per-pool emission rates for the next epoch being set accordingly.

### Background

The core historical challenge for decentralized exchanges has been attracting and retaining deep enough liquidity to provide a good trading experience for users.

Liquidity providers face significant risk—largely related to price movements—and must be compensated accordingly. Early exchanges operated as two-sided marketplaces where LPs earned only the fees their liquidity generated.

These systems proved fragile: when trading slowed, fees dropped to a level that couldn’t support the risk of providing liquidity, and LPs withdrew.

First-generation exchanges were also poor at bootstrapping markets for new tokens, because without a reliable return, LPs would often not take on the risk of market making highly volatile assets.

To mature as a product category, DEXs needed to establish a more predictable return profile for LPs, and to decompose risks in a way that each participant is only asked to absorb risks best suited to their role.

Aerodrome was part of a new era of exchanges built to solve these unique problems by:

1. Decoupling LP compensation from point-in-time fees, creating a more knowable return rate which keeps liquidity deep and sticky across market conditions
2. Creating a dedicated stakeholder group—token operators—directly responsible for directing the network’s liquidity to where it is needed, so LPs are not asked to absorb risk unfit for their role

To make this possible, Aerodrome is built around a native token (AERO) that in its liquid form is distributed as LP rewards and that, when locked, grants voting rights and a claim on future exchange revenue.

### Aerodrome Economy

Aerodrome operates as a zero-leak economy: 100% of value generated by the protocol is distributed to participants: token operators, who coordinate the flow of liquidity, earn all exchange revenue. Liquidity providers, who make efficient trades possible, earn AERO emissions (or can choose to earn swap fees directly).

All token operators participate on equal footing, earning according to their participation.

The Aerodrome Foundation, the protocol's neutral steward, and Dromos Labs, its core development team, both earn revenue through participation in this same system. The Aerodrome Foundation uses its share to promote protocol health and growth, including through token buybacks. Dromos Labs uses its share to fund ongoing protocol development.

Through its economic design, Aerodrome aligns the interests of all stakeholders who are often at odds in incumbent systems. This alignment exists because everyone earns the same way through the same mechanisms, and earnings are tied directly to protocol performance. When the protocol generates value, everyone earns in proportion to their participation.

To support ongoing development, 5% of weekly emissions are allocated to the Dromos Labs team address where it is compounded into a max-locked veAERO position.

### Exchange Revenue

100% of exchange revenue is distributed weekly to token operators as voting rewards.

Current revenue sources:

- 100% of swap fees generated by staked liquidity
- A percentage of swap fees generated by unstaked liquidity
- 100% of voting incentives deposited by third parties
- 100% of launch payments (voting incentives deposited as part of Ignition launches)

### Voting Incentives

Aerodrome enables projects to deposit voting incentives. These incentives are processed as exchange revenue and paid to veAERO holders who vote for the pool.

- A token issuer deposits a share of supply as voting incentives for their token's pool
- Token operators vote to direct AERO emissions to the pool, capturing a share of those incentives in return
- AERO emissions then flow to the pool, incentivizing liquidity providers to deposit the deep, productive liquidity required to provide efficient execution for traders
- Better trading conditions drive higher volume, which generates organic fee revenue
- As fee revenue accrues, it attracts future votes from token operators seeking to capture it

> **Note:** Exchange revenue from swap fees operates on a one-week delay. Swap fees accrue over a seven-day period and are distributed as voting rewards at the end of the following seven-day period, not the one in which they were generated. Voting incentives, however, are distributed to token operators at the end of the seven-day period in which they are deposited.

### Token Listing and Liquidity Staking

Not all pools participate in the above system. Due to the permissionless and anonymous nature of DeFi, to prevent abuse and protect users, tokens must be listed before the pools they are in can qualify to receive votes or emissions. In order to receive votes and receive/distribute AERO emissions, a pool must have a gauge: a special smart contract connected to a liquidity pool that coordinates the distribution of emissions, votes, and rewards. When token operators vote for a pool, they are directing emissions toward its gauge. The more votes a gauge receives relative to all other gauges, the larger its share of that week's emissions.

**Permissionless Pools**

Aerodrome allows anyone to create a pool for any supported token. LPs in pools that are not emissions-eligible earn 100% of swap fees directly.

**Unstaked Liquidity**

LPs always have the option to leave their deposits unstaked, or to unstake already staked deposits. Unstaked deposits earn swap fees instead of AERO emissions, similar to the legacy model on other DEXs. Offering this flexibility to LPs helps attract liquidity from other venues.

No deposit can earn both swap fees and AERO concurrently.

> **Note:** Aerodrome has the ability to process a percentage of fees generated by unstaked liquidity as exchange revenue. The current default protocol fee take is 10% in emissions-eligible Slipstream (concentrated liquidity) pools.

<div id="public-good-of-base"></div>

## Public Good for Base

The launch of Aerodrome included the creation and initial funding of three ecosystem wallets. Each of these wallets were designed to serve a discrete role to help grow Aerodrome and serve the Base ecosystem. Two of these wallets are managed by the Aerodrome Foundation. The other is managed by Dromos Labs.

The veAERO in these wallets are max-locked. None of the underlying AERO has ever been sold.

### Wallets

**Flight School**

The Flight School wallet was created to grow the network of token operators by incentivizing new locks. Each week, it would vote and earn revenue which would then be used to buy liquid tokens off the market. All of those tokens would then be locked and distributed as a bonus to wallets that locked >2500 veAERO within a four-week period (“class”). Flight School formally concluded April, 2026.

After the conclusion of the Flight School program, the voting power was integrated into the Public Goods Fund.

**Development**

The development wallet is managed by Dromos Labs. It actively participates in weekly voting and uses earned rewards to fund ongoing development and R&D. This wallet also receives a small percent of weekly emissions (which is also compounded into the max-locked position).

### Buybacks

Over 184M AERO has been acquired and locked to date via the PGF, Flight School, and other initiatives.

### The Momentum Fund

With the launch of Aero, PGF will be reconstituted as the Momentum Fund. 100% of revenue generated by the Momentum Fund goes to supporting the Aerodrome Protocol via buybacks, grants to contributors and other ecosystem support measures such as strategic partnerships. More on this update from the Aerodrome Foundation <a href="https://paragraph.com/@aerodrome-foundation/the-future-of-flight-school" target="_blank">here</a>. 

<div id="ignition"></div>

## Ignition

Ignition is Aerodrome's liquidity launch program, designed to activate the flywheel for new projects at or around their token generation event (TGE).

With Ignition, a project deposits a portion of its token supply as voting incentives for its pool on Aerodrome. Token operators then vote for the pool to capture those incentives, directing AERO emissions that begin streaming the following epoch. Those same token operators receive their incentive rewards, and LPs—which can include the token operators themselves—deposit two-sided liquidity to earn the incoming AERO stream.

As liquidity deepens, the pool becomes capable of supporting trading volume with increased efficiency. Volume generates revenue from swap fees, which attracts further votes and sustains the cycle.

With sufficient depth and distribution through Aerodrome, price discovery frequently occurs onchain—on Aerodrome—even when running alongside concurrent centralized exchange listings.

Launch payments deposited through Ignition are treated as exchange revenue and distributed to token operators.

<div id="locking-and-voting"></div>

## Locking and Voting

Anyone can become a token operator on Aerodrome by locking AERO (a process also called "vote-escrowing.") A particularly powerful version of Aerodrome’s flywheel comes when LPs earn AERO for providing liquidity, lock that AERO as veAERO, and then earn exchange revenue for directing additional AERO rewards to the pool that they are already LPing.

Locking AERO generates veAERO, an NFT that represents a locked position and carries voting rights. When locking, tokenholders choose a duration of at least one week and up to four years. The longer the lock, the more voting power is granted.

### Voting Power

Voting power is determined by two factors: how much AERO is locked, and how much of the lock duration remains.

At a four-year lock, you receive the full 1:1 ratio. With two years remaining, you receive half. The same logic applies along the scale.

Same amount locked, different durations | 1,000 AERO:

{

<table className="min-w-full w-full divide-y divide-accent-10 rounded-xl overflow-hidden bg-accent-0 mb-12 font-mono">
  <thead>
    <tr>
      <th className="px-6 py-3 text-left font-medium uppercase text-xs text-accent-50 w-2/3">
        Lock Duration
      </th>
      <th className="px-6 py-3 text-left font-medium uppercase text-xs text-accent-50">
        Voting Power
      </th>
    </tr>
  </thead>
  <tbody className="divide-y divide-accent-10">
    <tr>
      <td className="px-6 py-4">4 years</td>
      <td className="px-6 py-4">1,000 veAERO</td>
    </tr>
    <tr>
      <td className="px-6 py-4">3 years</td>
      <td className="px-6 py-4">750 veAERO</td>
    </tr>
    <tr>
      <td className="px-6 py-4">2 years</td>
      <td className="px-6 py-4">500 veAERO</td>
    </tr>
    <tr>
      <td className="px-6 py-4">1 year</td>
      <td className="px-6 py-4">250 veAERO</td>
    </tr>
    <tr>
      <td className="px-6 py-4">6 months</td>
      <td className="px-6 py-4">125 veAERO</td>
    </tr>
  </tbody>
</table>
}

Same duration, different amounts | locked at 4 years:

{

<table className="min-w-full w-full divide-y divide-accent-10 rounded-xl overflow-hidden bg-accent-0 mb-12 font-mono">
  <thead>
    <tr>
      <th className="px-6 py-3 text-left font-medium uppercase text-xs text-accent-50 w-2/3">
        Lock Duration
      </th>
      <th className="px-6 py-3 text-left font-medium uppercase text-xs text-accent-50">
        Voting Power
      </th>
    </tr>
  </thead>
  <tbody className="divide-y divide-accent-10">
    <tr>
      <td className="px-6 py-4">10,000 AERO</td>
      <td className="px-6 py-4">10,000 veAERO</td>
    </tr>
    <tr>
      <td className="px-6 py-4">5,000 AERO</td>
      <td className="px-6 py-4">5,000 veAERO</td>
    </tr>
    <tr>
      <td className="px-6 py-4">1,000 AERO</td>
      <td className="px-6 py-4">1,000 veAERO</td>
    </tr>
  </tbody>
</table>
}

### Auto-Max Lock

Locks can be set to Auto-Max Lock, which keeps the duration fixed at four years and prevents voting power from decaying. This feature can be enabled or disabled for each individual Lock. If disabled, the Lock duration begins to shorten each week.

### Lock Expiry

When a lock reaches the end of its duration, voting power drops to zero and the underlying AERO becomes available to withdraw. The veAERO NFT remains in your wallet until you take action. It does not burn automatically. To recover the locked AERO, the holder must manually withdraw through the protocol interface. An expired Lock holds no voting power and earns no rewards.

### Decay

Voting power decays linearly as time passes. If you locked 1,000 AERO for four years and do nothing, after one year you will have three years remaining and your voting power will have dropped from 1,000 to 750, continuing to fall each week until expiry. Auto-Max Lock stops this by freezing the duration at four years.

### Locking Details

- Lock durations can be extended
- Additional AERO can be added to an existing Lock
- Once locked, AERO cannot be withdrawn early, but the veAERO NFT itself is liquid and can be transferred
- veAERO cannot be transferred during any epoch in which it has already actively voted

### Voting

Each epoch, token operators allocate their voting power across any number of pools/gauges in whatever proportion they choose. A token operator can put 100% of their weight behind a single pool, or split it across many.

Votes are not automatically reset each epoch. If a token operator does not manually recast their votes, their previous allocation carries forward unchanged. Once votes are submitted, they cannot be changed mid-epoch.

Per-pool exchange revenue earned by voters is proportional to their share of votes directed to the pool. What matters is not how much voting power you hold in total, but what percentage of a given gauge's votes you represent.

### vAPR

Voting APR (vAPR) measures the annualized return a veAERO holder can expect to earn by allocating their votes to a specific liquidity pool.

**Formula:** vAPR = (Weekly Voting Rewards / Value of Voted veAERO) × 52

**Where:**

- Weekly Voting Rewards: The total USD value of the voting rewards to voters for the current weekly epoch. This is the sum of the trading fees accrued by the pool and any external incentives (bribes) deposited for voters.
- Value of Voted veAERO: The total voting weight directed to the pool, expressed in USD. This is calculated by multiplying the total number of veAERO votes cast for the pool by the current market price of the AERO token.
- Annualization: Because rewards are distributed in weekly epochs, the base return is multiplied by 52 to project an annualized rate.

> **Note:** vAPR is calculated dynamically based on the current market price of AERO and the current number of votes assigned to a pool and will continually shift before finalizing at the epoch's close.

### Anti-Dilution Protection

veAERO holders receive a weekly rebase (veAERO reward) to reduce the dilutive impact of new AERO emissions. Rebases must be manually claimed.

The rebase is calculated as:

<SVG
  src="/svg/AERO/formula.svg"
  className="w-full"
  preserveAspectRatio="xMidYMid meet"
/>

The rebase amount increases when the overall percentage of locked AERO is low. This protects current voters while incentivizing new users to lock their tokens.

### Relay: Automated Compounding

Token operators can choose to configure their position in Relay, an auto-voter built into the Aerodrome interface. Relay casts votes each epoch on the operator's behalf and compounds earned rewards back into their locked position, increasing both their underlying AERO balance and their veAERO voting power over time.

Relay is designed for token operators who want to maximize long-term compounding without actively managing their position epoch to epoch.

<div id="aero-and-veaero"></div>

## AERO and veAERO

Aerodrome Finance uses two tokens to manage its utility and governance:

AERO — ERC-20 utility token of the protocol

veAERO — ERC-721 governance token in the form of an NFT (non-fungible token)

{

<table className="min-w-full w-full divide-y divide-accent-10 rounded-xl overflow-hidden bg-accent-0 mb-12">
  <thead>
    <tr>
      <th className="px-6 py-3 text-left font-medium uppercase text-xs text-accent-50 w-2/3">
        AERO
      </th>
      <th className="px-6 py-3 text-right font-medium uppercase text-xs text-accent-50">
        Amount
      </th>
      <th className="px-6 py-3 text-right font-medium uppercase text-xs text-accent-50">
        Percentage
      </th>
    </tr>
  </thead>
  <tbody className="divide-y divide-accent-10">
    <tr className="bg-accent-5">
      <td className="px-6 py-4">Voter Incentives</td>
      <td className="px-6 py-4 text-right">40M</td>
      <td className="px-6 py-4 text-right">8%</td>
    </tr>
    <tr>
      <td className="px-6 py-4">Genesis Liquidity Incentives</td>
      <td className="px-6 py-4 text-right">10M</td>
      <td className="px-6 py-4 text-right">2%</td>
    </tr>
  </tbody>
</table>
}

{

<table className="min-w-full w-full divide-y divide-accent-10 rounded-xl overflow-hidden bg-accent-0 mb-12">
  <thead>
    <tr>
      <th className="px-6 py-3 text-left font-medium uppercase text-xs text-accent-50 w-2/3">
        veAERO
      </th>
      <th className="px-6 py-3 text-right font-medium uppercase text-xs text-accent-50">
        Amount
      </th>
      <th className="px-6 py-3 text-right font-medium uppercase text-xs text-accent-50">
        Percentage
      </th>
    </tr>
  </thead>
  <tbody className="divide-y divide-accent-10">
    <tr className="bg-accent-5">
      <td className="px-6 py-4">Airdrop for veVELO Lockers</td>
      <td className="px-6 py-4 text-right">200M</td>
      <td className="px-6 py-4 text-right">40%</td>
    </tr>
    <tr>
      <td className="px-6 py-4">Public Goods Fund (Auto Max-Locked)</td>
      <td className="px-6 py-4 text-right">105M</td>
      <td className="px-6 py-4 text-right">21%</td>
    </tr>
    <tr className="bg-accent-5">
      <td className="px-6 py-4">Development Team Funding (Auto Max-Locked)</td>
      <td className="px-6 py-4 text-right">95M</td>
      <td className="px-6 py-4 text-right">19%</td>
    </tr>
    <tr>
      <td className="px-6 py-4">Flight School (Auto Max-Locked)</td>
      <td className="px-6 py-4 text-right">50M</td>
      <td className="px-6 py-4 text-right">10%</td>
    </tr>
  </tbody>
</table>
}

<div id="emissions"></div>

## Emissions

The initial supply of AERO was 500M, with 450M distributed as vote-locked (veAERO) tokens.

Weekly emissions began at 10M $AERO (2% of the initial supply) before tapering off to more sustainable levels once Aerodrome’s initial rapid ramp up and growth phase had passed.

While the Aerodrome Foundation’s initial intent was to eventually turn emissions rate decisions over to token operators, the Foundation eventually determined it made more sense to hold emissions stable at approximately 10.92% per year heading into the launch of Aero.

With gauge caps and predictive allocation, the economics of the forthcoming Aero will be optimized for protocol sustainability. As a result, the realized rate of emissions will be structurally limited and, while no final decisions have been made, voter participation may not be required if emissions decisions can be automated.

Further details of how the AERO Fed will operate with Aero are still to come.

Emissions charts:

### Aerodrome Emissions Path

<SVG
  src="/svg/AERO/emissions-path.svg"
  className="w-full"
  preserveAspectRatio="xMidYMid meet"
/>

### Aerodrome Total Supply

<SVG
  src="/svg/AERO/total-supply.svg"
  className="w-full"
  preserveAspectRatio="xMidYMid meet"
/>