Aerodrome is a ve(3,3) AMM DEX designed with a forked of Velodrome, aiming to become the liquidity hub on Base. Aerodrome inherits the latest features from Velodrome V2.
Aerodrome was launched on August 28, 2023 on the BASE network. $AERO token has been launched and the project is now distributing $AERO as rewards to liquidity providers (or Emissions).
Outstanding features of Aerodrome
Operational model
– The protocol is designed to enable token exchange and generate fees (from traders) by attracting liquidity.
– After each Epoch, liquidity providers (LPs) receive $AERO tokens through the Emission mechanism in proportion to the number of votes in the Liquidity Pools.
– Participants can lock $AERO in order to vote in the next epoch to become a veAERO voter.
– veAERO voters will be rewarded (proportional to the number of tokens locked) for their votes equal to 100% of the protocol’s transaction fees from the previous period or from any other incentive.
Rebase Mechanism
$veAERO holders will receive a portion proportional to the $AERO token issuance and the ratio between the $veAERO amount and the total $AERO supply, minimizing dilution in $veAERO voting power.
The weekly rebase amount is calculated according to the formula:
rebase = weeklyEmissions × (1 – veAERO.totalSupply ÷ AERO.totalSupply)ˆ2 × 0.5
This rebase formula will reward $veAERO holders more as the lock rate decreases, incentivizing new lockers to join. The $veAERO supply rule does not impact the weekly token distribution to liquidity providers.
Tokenomics
Key metrics
Token Name: AERO Token
Ticker: AERO
Blockchain: BASE
Token Type: Utility
Total Supply: 500,000,000 AERO
Circulating Supply: 20,000,000 AERO
Token Allocation
Token Release Schedule
The total initial supply of $AERO tokens is 500 million, of which 450 million are distributed as veAERO. Weekly emission will start at 10 million $AERO (2% of initial supply). The token distribution schedule will follow three phases:
Take-off: During the first 14 Epochs, emission levels will increase by 3% weekly allowing for rapid growth in protocol development activity.
Cruise: After the 14th Epoch ends, emission levels will gradually decrease by 1% each epoch to control the supply released to the market.
AeroFED: After the Emission level drops below 9M tokens per epoch (expected to take place at Epoch 67), veAERO voters will control Aerodrome’s monetary policies through the AeroFED system, voters will vote together to choose 1 of 3 options after each period:
- Increase token issuance to 0.01% of total supply (equivalent to 0.52% annually)
- Reduced token issuance by 0.01% of total supply (equivalent to 0.52% annually)
- Keep token emission constant in proportion to total supply
Token utilities
$AERO is distributed to liquidity providers through token issuance. $veAERO is used for administrative activities. Any $AERO holder can lock their tokens and receive a $veAERO (also known as Lock or veNFT) in exchange. Additional tokens may be added to the $veAERO NFT at any time.
Backer & Partners
Aerodrome does not raise capital and does not organize token sales for funds and investors at an early stage. All developments are carried out in parallel with Base’s team.
Aerodrome is partnering with famous names in the market. The ve(3,3) model cannot operate effectively without support from partner projects and ecosystems. There are many projects participating in Aerodrome, including: Yearn Finance (YFI), Beefy Finance (BIFI), Unibot (UNIBOT), Moonwell (WELL), etc.