Decentralized finance (DeFi) continues to evolve at a rapid pace, and Aerodrome has emerged as a leading decentralized exchange (DEX) on the Base blockchain. As a Layer-2 scaling solution built on Ethereum, Base enables fast, low-cost transactions—making it an ideal environment for high-efficiency DeFi protocols. At the heart of this ecosystem is AERO, the native utility token powering Aerodrome’s innovative liquidity model, governance structure, and revenue-sharing mechanisms.
With over $100 billion in cumulative trading volume by 2025, Aerodrome has cemented its position as the central liquidity hub on Base. This guide dives into everything you need to know about AERO, including its tokenomics, technological foundation, use cases, and how to trade it securely on platforms like Phemex.
Quick Facts: AERO at a Glance
- Ticker Symbol: AERO
- Blockchain: Base (Ethereum Layer-2)
- Contract Address:
0x940181a94A35A4569E4529A3CDfB74e38FD98631 - Circulating Supply: ~614 million AERO
- Max Supply: No hard cap (inflationary model)
- Primary Use Cases: Governance, liquidity incentives, revenue sharing
- Market Cap: ~$1.2 billion (as of June 2025)
- Available For: Spot and futures trading
👉 Discover how to start trading AERO with low fees and advanced tools.
What Is AERO?
AERO is an ERC-20 utility token that powers Aerodrome Finance—a decentralized exchange and automated market maker (AMM) launched in August 2023 on the Base blockchain. Designed to consolidate fragmented liquidity across Base’s growing DeFi landscape, Aerodrome leverages cutting-edge technology to offer users efficient trading and attractive yields for liquidity providers.
At its core, AERO serves three critical functions: enabling decentralized governance through veAERO voting rights, incentivizing liquidity provision via weekly emissions, and distributing 100% of protocol fees to long-term stakeholders. The protocol’s flagship feature—Slipstream, a concentrated liquidity AMM inspired by Uniswap V3—accounts for more than 85% of its trading volume, offering superior capital efficiency compared to traditional AMMs.
By combining community-driven incentives with robust technical infrastructure, Aerodrome has become a cornerstone of Base’s DeFi ecosystem, attracting traders, developers, and yield seekers alike.
Understanding AERO Tokenomics
Unlike deflationary tokens with fixed supplies, AERO operates under an inflationary emission model designed to sustain long-term growth and participation. As of mid-2025, approximately 614 million AERO are in circulation, with no maximum supply cap.
The initial distribution included:
- 440 million AERO distributed as vote-escrowed tokens (veAERO)
- 60 million allocated for voter incentives and genesis liquidity
Weekly emissions began at 10 million AERO (2% of initial supply), following a dynamic schedule:
Emission Phases
- Take-off Phase (Weeks 1–14): Weekly emissions increased by 3% to stimulate early engagement.
- Cruise Phase (Post-Week 14): Emissions gradually decay by 1% per epoch to moderate inflation.
- Aero Fed Phase (~Week 67+): veAERO holders vote on future emission rates within a range of 0.01%–1% of total supply.
To counterbalance inflation, 30% of Aerodrome’s annual revenue—totaling around $285 million—is used for AERO buybacks, reducing circulating supply over time. There are no token burns or vesting unlocks from VCs or team members, minimizing sell pressure.
Additionally, veAERO holders benefit from a rebase mechanism tied to emission dynamics:
rebase = weeklyEmissions × (1 - veAERO.totalSupply ÷ AERO.totalSupply)² × 0.5This formula rewards users who lock their tokens during periods of lower participation, encouraging long-term commitment and ecosystem stability.
Key Functions of AERO
AERO is more than just a speculative asset—it plays a vital role in maintaining the health and decentralization of the Aerodrome protocol.
1. Governance via veAERO
Holders can lock AERO to receive veAERO, an ERC-721 NFT representing voting power. Lock durations range from 1 to 4 years:
- 100 AERO locked for 4 years = 100 veAERO
- Same amount locked for 1 year = 25 veAERO
Voting power influences how weekly AERO emissions are allocated across liquidity pools. The “Auto-Max Lock” option treats veAERO as permanently locked, maximizing voting weight.
2. Liquidity Incentives
Liquidity providers (LPs) earn AERO rewards based on their share of staked positions in active pools. Rewards are distributed proportionally each epoch according to voting power assigned to specific pools.
3. Revenue Sharing
All protocol fees generated—from swap charges and concentrated liquidity—are redistributed directly to veAERO holders. This creates a powerful alignment between long-term stakeholders and protocol success.
👉 Access real-time price data and begin your DeFi trading journey today.
AERO vs Bitcoin: Key Differences
While both are digital assets, AERO and Bitcoin serve fundamentally different roles in the crypto economy.
| Aspect | AERO | Bitcoin |
|---|---|---|
| Technology | Built on Base (Optimistic Rollup L2), inherits Ethereum's security | Standalone PoW blockchain |
| Transaction Speed & Cost | Near-instant, fees under $0.01 | ~10 minutes per block; fees spike during congestion |
| Primary Use Case | DeFi governance, yield farming, liquidity provision | Store of value, digital gold |
| Supply Model | Inflationary with buyback controls | Deflationary, capped at 21 million |
| Decentralization Level | Moderately decentralized, reliant on Ethereum base layer | Highly decentralized global mining network |
AERO excels in utility within DeFi ecosystems, while Bitcoin remains the gold standard for censorship-resistant value storage.
The Technology Behind Aerodrome
Aerodrome runs entirely on Base, an Ethereum Layer-2 developed by Coinbase using Optimistic Rollup technology. This allows for fast finality and ultra-low transaction costs while maintaining Ethereum’s security guarantees.
Its core innovation—Slipstream AMM—enables concentrated liquidity provisioning, allowing LPs to allocate capital within custom price ranges. This dramatically improves capital efficiency compared to constant-product models like Uniswap V2.
Slipstream now accounts for over 60% of all DEX volume on Base, highlighting its adoption and technical superiority.
Looking ahead, potential integration with zk-Rollups—as outlined in Base’s roadmap—could further enhance scalability and privacy.
Origins & Team Structure
Launched in August 2023 by a pseudonymous team, Aerodrome raised no external capital. There were no private sales, venture capital allocations, or pre-mine distributions—making it one of the most community-centric launches in DeFi history.
Initial distribution highlights:
- 40 million AERO for voter incentives
- 200 million veAERO airdropped to early Velodrome participants
- Allocations for public goods, foundation, and Flight School—all Auto-Max Locked
This fair-launch approach fostered immediate trust and organic growth, with the protocol achieving $200 million TVL within just 72 hours of launch.
Is AERO a Good Investment?
Disclaimer: Not financial advice. Always conduct your own research.
Evaluating AERO as an investment requires weighing several factors:
✅ Strengths
- Dominates Base DeFi with over 60% of DEX volume
- Strong community engagement with thousands participating in veAERO locking
- Revenue-sharing model benefits long-term holders
- Backed by Coinbase’s growing Base ecosystem
⚠️ Risks
- Annual inflation rate around 21%, partially offset by buybacks
- Regulatory uncertainty around DeFi tokens
- Market volatility inherent to crypto assets
While AERO’s fundamentals are strong, prospective investors should consider diversifying and remain aware of ongoing market conditions.
Frequently Asked Questions (FAQ)
Q: Can I stake AERO directly?
A: Not exactly—you lock AERO to receive veAERO, which grants voting rights and revenue share eligibility.
Q: Where can I trade AERO?
A: AERO is available on major exchanges including Phemex for spot and futures trading.
Q: Does AERO have a maximum supply?
A: No, AERO is inflationary with no hard cap. However, buybacks help manage supply growth.
Q: How are AERO rewards distributed?
A: Weekly emissions go to liquidity providers based on pool voting power determined by veAERO holders.
Q: Is Aerodrome secure?
A: Yes—it inherits Ethereum’s security via Base’s Optimistic Rollup design and has undergone third-party audits.
Q: What makes Slipstream different from other AMMs?
A: It allows concentrated liquidity positioning, increasing capital efficiency and LP returns significantly.
👉 Start trading AERO with advanced order types and deep liquidity now.