Aerodrome DEX Leads Holder Revenue on Base
The decentralized exchange Aerodrome is leading all DEXs on the Base network in terms of revenue generated for its token holders. The protocol is also teasing a multi-L2 expansion called MetaDEX03. This performance serves as a strong signal for liquidity flows and protocol dominance on the rapidly growing Layer-2.
- The protocol's "holder revenue" model distributes 100% of trading fees and any protocol incentives (bribes) directly to users who lock AERO tokens for veAERO. This differs from models like Uniswap, which has historically not distributed fees to token holders. - To earn a share of revenue, holders must lock their AERO tokens for up to four years, receiving a non-transferable veAERO NFT in return. The longer the lock period, the greater the holder's voting power and claim on protocol fees. - Aerodrome has established itself as the dominant liquidity hub on Base, at times accounting for over 50% of the network's Total Value Locked (TVL) and processing approximately 57% of all DEX volume on the chain. - The protocol benefits from a strong alignment with Coinbase, which incubated the Base network. Coinbase Ventures holds a significant, market-acquired position in veAERO and actively participates in governance to deepen liquidity for its own products, such as its wrapped Bitcoin (cbBTC). - The teased "MetaDEX03" is a new operating system for a planned merger of Aerodrome and its sister protocol on Optimism, Velodrome. The unified, cross-chain DEX will be called Aero and is planned to expand to Ethereum and Circle's institutional Arc blockchain. - The transition to Aero, expected in the second quarter of 2026, will involve merging the AERO and VELO tokens into a single AERO token. The new token distribution will be allocated to existing holders with approximately 94.5% for AERO holders and 5.5% for VELO holders, based on current revenue splits. - Aerodrome's design is a fork of the "ve(3,3)" model, which combines mechanics from protocols like Curve, Convex, and Uniswap to create a liquidity marketplace where other protocols can offer incentives to veAERO voters to attract liquidity. - The upcoming MetaDEX03 system aims to increase protocol earnings by as much as 40% while reducing costs by internalizing revenue that is typically lost to MEV auctions.
