A platform that lets customers swap tokens for low charges in trade for rewards, amongst different options, has attracted some $150 million only a day after going stay – bumping Base blockchain’s DeFi ecosystem by 80% by way of locked worth.
Aerodrome, a product by Velodrome in collaboration with Base builders, hopes to behave as a “enterprise growth protocol” for the Base ecosystem, supporting initiatives as they launch, onboarding new initiatives and tokens, and producing liquidity for the ecosystem.
Its creators hope to emulate the obvious success of Velodrome, one in all Optimism community’s most used platforms which holds over $288 million in locked worth. Like Velodrome, Aerodrome rewards its AERO tokens to platform customers who present liquidity, conduct swaps, or take part in governance.
AERO tokens have a complete provide of 500 million of which 450 million are locked for 4 years, as per developer paperwork. The one liquid AERO at launch are the 50 million tokens reserved for voter incentives and offering preliminary liquidity.
The way it works
A key downside confronted by decentralized exchanges is that rewards emissions are tied to complete liquidity, moderately than to buying and selling quantity, which generates charges for the protocol. To fight this, merchandise like Aerodrome enable holders of their native token, AERO, to lock their holdings for anyplace between one week to 4 years – in flip of veAERO, a vested AERO token.
The longer the lock, the extra veAERO the consumer receives, which grants them extra voting energy on governance issues. This is similar mechanism used on Velodrome.
These locked veAERO are represented as NFTs, which may then be traded on completely different NFT marketplaces. Different customers can then buy these NFTs to realize outright publicity to the ecosystem, as an alternative of getting to purchase tokens, locking them up and having to handle that place.
Customers can use the veAERO tokens to participate in platform governance, and, importantly, assist set the reward ranges of buying and selling swimming pools supplied on the platform. In return, these voters obtain 100% of all charges and bribes obtained by the precise swimming pools that they voted for.
Such options create a flywheel of liquidity, as customers are interested in rewards, buy extra AERO, and maintain the platform working by frequently voting on which undertaking’s tokens to help, add, and additional reward.
And the method appears to be working to this point. Velodrome, the Optimism undertaking, generated platform revenues of over $3 million prior to now month, knowledge reveals, of which $1.3 million had been paid out as charges to VELO holders and customers.
