Aerodrome

About Aerodrome token

Aerodrome Finance is a cutting-edge Automated Market Maker (AMM) launched on August 28, 2023, on the Base network. Designed to serve as the Base’s central liquidity hub, Aerodrome combines a powerful liquidity incentive engine, a vote-lock governance model, and a user-friendly experience. Inheriting the latest features from Velodrome V2, Aerodrome aims to revolutionize the way liquidity is managed and traded in the DeFi space.
**Project Overview:**
**Aerodrome Mechanics:**
– **Low Slippage:** Aerodrome is optimized to minimize slippage during token swaps, providing a more efficient trading experience.
– **Fees:** The protocol generates fees from traders, which are distributed among veAERO voters.
– **AERO Emissions:** Liquidity providers (LPs) receive $AERO token emissions based on the votes their pools accumulate each epoch. Only staked liquidity in the protocol gauges qualifies for these emissions.
– **Liquidity Incentives:** The protocol incentivizes liquidity provision through a robust emissions distribution mechanism.
**Participants:**
– **veAERO Voters:** Participants who lock their $AERO tokens to vote on the distribution of emissions for the next epoch. These voters are rewarded with 100% of the protocol trading fees from the previous epoch and any additional voter incentives from the current epoch.
– **Traders:** Users who engage in token swaps on the Aerodrome platform.
– **Protocols:** Projects that integrate with Aerodrome for liquidity provision.
– **LPs:** Liquidity providers who stake their tokens in the protocol gauges to earn $AERO emissions.
**Tokenomics:**
Aerodrome Finance employs two tokens for utility and governance:
1. **$AERO (ERC-20 Utility Token):**
– Distributed to liquidity providers through emissions.
– Used within the protocol for various utilities.
2. **$veAERO (ERC-721 Governance Token):**
– Created by vote-escrowing $AERO tokens, resulting in a non-fungible token (NFT) known as a veNFT.
– The lock period for $AERO can be up to 4 years, with longer locks yielding higher voting power. For example:
– 100 $AERO locked for 4 years becomes 100 $veAERO.
– 100 $AERO locked for one year becomes 25 $veAERO.
– The Auto-Max Lock feature allows veNFTs to be treated as if they are locked for the maximum duration of 4 years, preventing decay in voting power.
**Governance and Rewards:**
– **Vote-Lock Governance Model:** Enables participants to lock their $AERO tokens and receive veAERO in return, allowing them to vote on emissions distribution.
– **Rewards:** veAERO voters are rewarded with protocol trading fees and additional incentives, promoting active participation in governance.
**User Experience:**
– Aerodrome prioritizes a seamless and user-friendly interface, making it accessible to a wide range of users, from traders to liquidity providers and governance participants.