Introduction to Aerodrome Finance

Aerodrome Finance is the flagship decentralized exchange (DEX) and automated market maker (AMM) on Coinbase’s Layer-2 blockchain, Base. Designed as a spiritual successor to Velodrome on Optimism, Aerodrome combines ultra-low gas fees, deep liquidity, and vote-escrow tokenomics (veTokenomics) to create a capital-efficient DeFi hub. It aims to solve liquidity fragmentation while offering sustainable yields to liquidity providers (LPs) and governance power to token holders.

Core Features

• Advanced AMM Pools:
  • Supports stablecoin pairs (low slippage) and volatile asset pools.
  • Customizable fees (0.01%–1%) tailored to asset volatility.
• veTokenomics (AERO):
  • Stake AERO tokens to receive vlAERO (vote-locked governance tokens).
  • vlAERO holders direct emissions to pools, earning bribes and trading fees.
• Bribe Marketplace:
  • Projects incentivize vlAERO holders to allocate emissions to their pools via bribes (e.g., USDC, AERO tokens).
• Gauges System:
  • Liquidity mining rewards distributed based on vlAERO voting weight.
• Gas Efficiency:
  • Built on Base L2, reducing transaction costs by 10–100x vs. Ethereum.

How Aerodrome Works

• For Traders:
  • Swap tokens at near-zero fees with minimal slippage via concentrated liquidity.
  • Route trades across multiple pools for optimal pricing.
• For Liquidity Providers (LPs):
  1. Deposit tokens into pools (e.g., ETH/USDC).
  2. Earn 0.01–0.05% trading fees + AERO emissions.
  3. Boost yields by locking AERO for vlAERO (up to 4x rewards).
• For Voters (vlAERO holders):
  • Vote on pool emissions weekly to earn bribes from DeFi projects.

Benefits of Using Aerodrome

• High Capital Efficiency:
  • Liquidity concentrated around market prices maximizes fee generation.
• Sustainable Rewards:
  • Long-term vlAERO lockers earn >50% of protocol fees + bribes.
• Ecosystem Dominance:
  90% of Base Chain’s TVL (Total Value Locked), exceeding $1B.
• Native Integration:
  • Backed by Coinbase, Base, and top DeFi protocols (e.g., Aave, Frax).

Getting Started

1. Connect Wallet:
   • Use Coinbase Wallet, Metamask, or Rabby on Base Network.
2. Fund Wallet:
   • Bridge ETH/USDC from Ethereum via Base Bridge.
3. Participate:
   • Trade: Swap tokens instantly.
   • Provide Liquidity: Add to pools and stake LP tokens.
   • Govern: Lock AERO → vlAERO → vote/earn bribes.

Tokenomics (AERO)

• Max Supply: 500M tokens.
• Distribution:
  • Liquidity mining (50%), veAERO lockers (40%), Treasury (10%).
• Locking Mechanics:
  • Lock AERO for 1–4 years; longer locks = higher vlAERO power.

Risks & Security

• Audits: By Code4rena and Sherlock (no critical issues).
• Smart Contract Risk: Non-upgradeable contracts minimize exploits.
• Centralization Risk: Admin keys burned; fully governed by vlAERO.

Future Roadmap

• V3 Upgrades: Concentrated liquidity (like Uniswap V3).
• Cross-Chain Expansion: Multi-chain deployments.
• Institutional Tools: On-ramps for enterprises.

Why Choose Aerodrome?

Aerodrome dominates Base Chain as its deepest liquidity layer, offering traders the best rates, LPs amplified yields, and voters passive income via bribes. Its flywheel of liquidity → volume → fees → bribes creates a self-reinforcing ecosystem poised to lead the next wave of DeFi adoption.

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