Aerodrome Finance
AERO
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Aerodrome Finance Info
Aerodrome Finance Intro
Aerodrome Finance is a next-generation Automated Market Maker (AMM) designed to function as the central liquidity hub on the Base network. It combines powerful liquidity incentives, a vote-lock governance model, and a user-friendly interface. Aerodrome launched on August 28, 2023, and inherits many advanced features from Velodrome V2, an AMM on the Optimism network. Aerodrome is essentially an evolution of Velodrome, designed specifically for Base, with enhancements that optimize liquidity incentives and governance for Base's unique ecosystem.
The two protocols, Aerodrome and Velodrome, are closely related, as Aerodrome takes the core design and governance principles of Velodrome and adapts them for the Base network. Both share the same incentive structures and vote-lock governance models, wherein users can lock their tokens ($AERO for Aerodrome and $VELO for Velodrome) to influence the distribution of emissions. This design encourages long-term engagement, allowing veAERO holders (those who lock their $AERO) to vote on how liquidity incentives are allocated across different pools. This vote-lock mechanism not only governs liquidity distribution but also gives participants a share of the protocol’s trading fees from the previous epoch and additional incentives.
By building on Velodrome's proven model, Aerodrome ensures deep liquidity and decentralized governance within the Base network, while offering liquidity providers and participants robust financial incentives to engage with the protocol actively. Aerodrome stands as a key player in the decentralized finance (DeFi) ecosystem on Base, further cementing the success of the Velodrome framework.
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Q&A about Aerodrome Finance Tokenomics
Explore the tokenomics of Aerodrome Finance(AERO) and review the project details below.
What is the allocation for Aerodrome Finance(AERO)?
- 8% was allocated to Voters Incentives
- 2% was allocated to Genesis Liquidity Pool
- 40% was allocated to Airdrop for veVELO Lockers
- 21% was allocated to Ecosystem Pools and Public Goods Funding
- 14% was allocated to Aerodrome Team
- 10% was allocated to Protocol Grants
- 5% was allocated to AERO Pools Votepower
What is the supply schedule for Aerodrome Finance(AERO)?
The initial supply of $AERO is 500M, with 450M distributed as vote-locked ($veAERO) tokens.
Weekly emissions will being at 10M $AERO (2% of the initial supply). The emission schedule will follow three phases:
- Take-off: During the first 14 weeks (epochs), emissions will increase at 3% per week, allowing for rapid growth in protocol activity and partner onboarding.
- Cruise: After Epoch 14, emissions will decay at 1% per epoch, ensuring total supply inflation decreases over time as the protocol matures.
- Aero Fed: When emissions programmatically drop under 9M per epoch, approximately Epoch 67, veAERO voters will take control of Aerodrome's monetary policy through the Aero Fed system. Voters will collectively make one of three choices each epoch:
- Increase emissions by 0.01% of total supply (0.52% annualized)
- Decrease emissions by 0.01% of total supply (0.52% annualized)
- Maintain emissions unchanged as a % of total supply
The winning vote will be determined by simple majority vote. If an Increase or Decrease is selected, the emission rate will change one full epoch after the vote. A max emission rate will be set at 1% of total supply per week (52% annualized) and a minimum rate at 0.01% per week (0.52% annualized).
Aerodrome Finance Token Allocation
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Aerodrome Finance is a next-generation Automated Market Maker (AMM) designed to function as the central liquidity hub on the Base network. It combines powerful liquidity incentives, a vote-lock governance model, and a user-friendly interface. Aerodrome launched on August 28, 2023, and inherits many advanced features from Velodrome V2, an AMM on the Optimism network. Aerodrome is essentially an evolution of Velodrome, designed specifically for Base, with enhancements that optimize liquidity incentives and governance for Base's unique ecosystem.
The two protocols, Aerodrome and Velodrome, are closely related, as Aerodrome takes the core design and governance principles of Velodrome and adapts them for the Base network. Both share the same incentive structures and vote-lock governance models, wherein users can lock their tokens ($AERO for Aerodrome and $VELO for Velodrome) to influence the distribution of emissions. This design encourages long-term engagement, allowing veAERO holders (those who lock their $AERO) to vote on how liquidity incentives are allocated across different pools. This vote-lock mechanism not only governs liquidity distribution but also gives participants a share of the protocol’s trading fees from the previous epoch and additional incentives.
By building on Velodrome's proven model, Aerodrome ensures deep liquidity and decentralized governance within the Base network, while offering liquidity providers and participants robust financial incentives to engage with the protocol actively. Aerodrome stands as a key player in the decentralized finance (DeFi) ecosystem on Base, further cementing the success of the Velodrome framework.