Aerodrome Finance (AERO) is a decentralized exchange (AMM) launched in August 2023 on Base, the Ethereum layer-2 network incubated by Coinbase. It was built by Dromos Labs, the team behind Optimism's Velodrome, and inherits the features of Velodrome V2.
It was designed to act as the central liquidity hub of the Base ecosystem and became one of the largest DEXs on Base by volume. In 2026 a plan was announced to merge Aerodrome and Velodrome under a single Aero brand, with the unified launch scheduled for October 22 (UTC).
Aerodrome uses a ve(3,3) design. Users lock AERO for a chosen period to receive a veAERO NFT carrying voting power, and holders vote each week on which liquidity pools receive newly emitted AERO rewards.
Voters earn the trading fees and incentives, sometimes called bribes, from the pools they support. This aims to align liquidity providers, voters and projects seeking liquidity, and the protocol also offers concentrated liquidity pools known as Slipstream.
Data provided by CoinGecko
AERO launched with an initial supply of 500 million tokens, with new tokens released through weekly emissions. Emissions were designed to rise early, then decay, and later be adjusted through veAERO holder votes.
veAERO holders also receive rebase rewards meant to offset dilution. Under the 2026 merger plan, existing AERO converts 1:1 into the new AERO and VELO converts at roughly 0.044 AERO, with deployment expanding to chains including Ethereum, Base, OP Mainnet and Arbitrum.
Commonly cited strengths include deep liquidity on Base, a fee model that rewards voters, and a design proven earlier by Velodrome. Expansion across multiple chains may broaden its use.
Risks include dilution from ongoing emissions, smart contract vulnerabilities, and governance power concentrating among large holders. Execution risk from a large merger and strong DEX competition also matter, and this overview is not investment advice.
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