What is Aerodrome Finance?
Aerodrome Finance is a decentralized exchange (DEX) and automated market maker (AMM) built on the Base Layer 2 network, which is part of the broader Ethereum ecosystem. Launched in August 2023, Aerodrome leverages technology from Velodrome, a leading DEX on the Optimism network, to offer deep liquidity, low slippage, and competitive fees, positioning itself as the central liquidity hub for the Base blockchain.
The platform combines elements from successful DeFi projects like Curve, Convex, and Uniswap to create an advanced liquidity generation and trading environment. Aerodrome utilizes a vote-escrowed governance model where users can lock their AERO tokens to receive veAERO NFTs, granting them voting power on protocol decisions, including emission rates and fee structures. This governance model incentivizes long-term participation and active involvement in the platform's growth.
Aerodrome plays a crucial role in the Base ecosystem by supporting liquidity for key assets like USDC and liquid staked tokens (e.g., cbETH, wstETH), enhancing their utility and adoption. Through strategic partnerships and integrations with DEX aggregators like Odos and KyberSwap, Aerodrome has expanded its liquidity reach and trading volume, further solidifying its importance within the DeFi space on Base.