Aerodrome Finance is preparing for liftoff as one of the most highly-anticipated launches in the decentralized finance (DeFi) space. Built on Velodrome’s advanced v2 technology stack, Aerodrome aims to revolutionize DeFi with a wide array of features and incentives tailored for user engagement.
As the countdown begins for the launch on Base, here is a comprehensive look at Aerodrome Finance and why it is likely to make a splash in the DeFi landscape.
What you'll learn 👉
Overview
Aerodrome positions itself as the central trading and liquidity hub of Base. With features like consolidated liquidity pools, automated voting, and a built-in NFT marketplace, Aerodrome wants to make DeFi intuitive and rewarding for users.
The project’s vision is to empower developers, the community, and infrastructure in the Base ecosystem. Its native token, AERO, will serve as the fuel for participation across governance, rewards, and other aspects.
Tokenomics and Distribution
- The total initial supply of AERO will be 500 million tokens.
- 90% of the supply (450 million tokens) will be locked as veAERO, aligning incentives for long-term participation.
- An airdrop of 40% of the initial supply (200 million tokens) has been announced for veVELO holders on Base. The airdrop aims to distribute more veAERO widely to users.
- A minimum balance of 1000 veVELO will be required to qualify for the airdrop. Specific veVELO balances will be excluded based on grant allocations at Velodrome’s launch.
- Around 3500 wallets holding over 500 million veVELO are currently eligible. However, up to 20% may be excluded per the grant-based criteria.
Airdrop Eligibility and Exclusions
The airdrop snapshot is yet to be taken, but certain veVELO balances will be excluded:
- veVELO balances granted to the Velodrome team and initial partners at launch.
- veVELO held by aggregator protocols that accepted user deposits.
Apart from these exclusions, wallets holding a minimum of 1000 veVELO will qualify for the airdrop. With over 3500 wallets eligible, a wide distribution of veAERO is expected.
Voting Incentives and Emissions
One of the key features is how veAERO aligns incentives between users and protocols on Aerodrome. Here is how it works:
- Protocols can lock veAERO and deposit incentives for veAERO voters to direct AERO emissions to their liquidity pools.
- In return, veAERO holders will receive 100% of trading fees and incentives from the pools they vote for.
- This creates a symbiotic relationship between protocols trying to attract liquidity and users looking to maximize yields.
For the initial epoch, veAERO holders will get priority as the first liquidity providers for the AERO/USDbC pair. High rewards are planned to incentivize this early pool.
- Emissions will start at 10 million AERO per week and increase by 3% per epoch.
- They will peak slightly above 15 million before decaying by 1% per epoch.
- There will also be partner incentives for the initial epochs to boost voting rewards.
Consolidated Liquidity Pools
One of Aerodrome’s flagship features is consolidated liquidity pools. This means similar asset pairs on Base will be aggregated into single pools on Aerodrome.
For instance, all USDbC pairs such as XYZ/USDbC, ABC/USDbC, and DEF/USDbC will be merged into a consolidated USDbC meta-pool.
Benefits of this approach:
- Increased capital efficiency due to pooled liquidity.
- Lower slippage for trades due to deeper liquidity.
- Reduced impermanent loss for liquidity providers.
- Simplified asset management for users through exposure to multiple pairs via a single pool.
The consolidated pools will be managed autonomously by the protocol. This approach represents a new paradigm in DeFi liquidity management.
veNFT Marketplace
Aerodrome will also feature a built-in marketplace for veNFTs generated on Base. The marketplace will allow for trades across multiple collections, making veNFTs more discoverable and liquid.
Key aspects:
- Support for primary sales, auctions, and secondary trades across veNFT collections.
- Ability to use veNFTs as collateral for loans on Aerodrome’s money markets.
- Trading fees distributed to veAERO holders.
- commissions distributed to the creators of the traded collections.
The marketplace aims to develop veNFTs into a new NFT sub-sector with intrinsic utility and rewards.
Partnerships
Aerodrome is launching with around 20 partners, including:
- Thales – on-chain options protocol
- Liquity – decentralized borrowing protocol
- Beefy – yield optimizer
- UniDex – DeFi aggregator
These partnerships will help drive activity and expand Aerodrome’s offerings from day one. More partnerships are planned based on community feedback.
The Road Ahead
With its launch on Base imminent, Aerodrome has laid out a detailed roadmap:
Q3 2023:
- Token generation
- Bootstrap pools for core tokens
- Basic money markets for stablecoin lending
Q4 2023:
- AMM with consolidated liquidity pools
- Expanded money markets
- Initial governance capabilities
2024 onwards:
- Decentralized governance transition
- Support for structured products
- Advanced NFT integrations and futures
As the roadmap indicates, Aerodrome plans to rollout features gradually but ambitiously. The goal is to keep evolving into the most sophisticated and user-friendly DeFi ecosystem on Base.
Conclusion
Aerodrome Finance is one of the most promising DeFi launches, with an array of features designed for an optimal user experience. Between its airdrop, voting incentives, partnerships, and roadmap, Aerodrome checks all the right boxes.
The project has already generated a buzz leading up to launch. As Aerodrome takes flight, it is positioned to deliver on its vision to be the go-to DeFi hub on Base.
With the runway cleared, Aerodrome is ready for takeoff. Fasten your seatbelts and get ready for the next generation of DeFi. The skies will never be the same again.
