Aerodrome Finance: The Decentralized Exchange on Base

What Is Aerodrome Finance?

Aerodrome Finance is a decentralized exchange (DEX) and liquidity hub built on Base, Coinbase’s Layer 2 blockchain powered by Optimism. Aerodrome offers low-fee token swaps, deep liquidity incentives, and a vote-escrow (veToken) governance model — all aimed at maximizing capital efficiency and community-driven incentives.

It is an evolution of Velodrome Finance, adapted for the Base ecosystem, making it a central piece of DeFi infrastructure on one of the fastest-growing Layer 2 networks.

Core Features of Aerodrome

1. Efficient Automated Market Maker (AMM)

Aerodrome utilizes a next-generation AMM optimized for:

• Low slippage swaps
• Efficient stablecoin trading
• Dual pool types: volatile pools for uncorrelated assets, and stable pools for correlated assets (e.g., stablecoins)

Its model supports a curve-like pricing formula for stable assets, helping users execute large trades with minimal slippage.

2. Vote-Escrow Tokenomics (veAERO)

The heart of Aerodrome’s governance is the veAERO model:

• Users lock AERO tokens for veAERO (vote-escrowed AERO)
• veAERO holders vote on which liquidity pools receive emissions
• Bribe markets allow protocols to incentivize voters with rewards

This structure ensures decentralized control over emissions and gives long-term holders a say in the protocol’s future — aligning incentives between liquidity providers, voters, and projects.

3. Liquidity Incentives & Bribing

Aerodrome’s emissions model is designed to attract deep liquidity. Projects can:

• Offer bribes to veAERO holders to direct emissions to their pools
• Boost trading volume and price stability through incentives
• Build liquidity without relying on unsustainable token inflation

This makes Aerodrome attractive for both protocols launching on Base and investors seeking yield opportunities.

4. Optimized for the Base Network

Aerodrome is tailor-made for Base, Coinbase’s low-cost, scalable Layer 2:

• Near-zero gas fees
• Seamless integration with Coinbase ecosystem
• High transaction throughput and developer-friendly environment

As Base continues to grow, Aerodrome is poised to become its flagship DEX.

How to Use Aerodrome

For Traders:

• Access low-slippage swaps across major Base tokens
• Trade stablecoin pairs with high efficiency
• Use native Base assets without bridging from Ethereum

For Liquidity Providers:

• Add liquidity to earn trading fees and AERO incentives
• Stake LP tokens to earn veAERO rewards
• Participate in ecosystem governance and voting

For Protocols:

• Launch tokens with incentivized liquidity
• Bribe veAERO holders to direct emissions
• Grow sustainable, protocol-owned liquidity on Base

Governance and Token Utility

The AERO token serves multiple purposes:

• Governance voting through veAERO
• Fee distribution to veAERO holders
• Bribe participation and revenue sharing
• Locking incentives to reduce token sell pressure

Aerodrome’s governance model empowers its community to steer the protocol’s evolution and reward long-term contributors.

Final Thoughts

Aerodrome Finance is a key DeFi primitive on the Base Layer 2 network. By combining an efficient AMM, robust veToken governance, and protocol-friendly emissions, Aerodrome aims to replicate — and surpass — the success of its Velodrome predecessor on Optimism.

For users and builders looking to leverage the full power of Base DeFi, Aerodrome is the launchpad of choice.