Aerodrome – central trading and liquidity marketplace. Here are the features of the ecosystem and direct access to its website.
Aerodrome Finance is a next-generation AMM designed to serve as Base’s central liquidity hub, combining a powerful liquidity incentive engine, vote-lock governance model, and friendly user experience.
If you like to keep up with the latest crypto news, then this project should interest you.
Aerodrome, features summarized in 4 points:
- The protocol is designed to enable token swaps and generate fees (from Traders) by attracting liquidity.
- Every epoch liquidity providers (LPs) receive $AERO token emissions proportionally to the votes the pools accumulate. Only staked (in the protocol gauges) liquidity receive emissions.
- Participants can lock their $AERO to be able to vote on the next epoch distribution of emissions, becoming veAERO Voters.
- veAERO Voters are rewarded (proportionally to locked amounts) for their votes with 100% of the protocol trading fees from the previous epoch and any additional voters incentives from the current epoch.
Aerodrome Finance uses two tokens to manage its utility and governance:
$AERO — ERC-20 utility token of the protocol
$veAERO — ERC-721 governance token in the form of an NFT (non-fungible token)
$AERO is distributed to liquidity providers through emissions.
$veAERO is used for governance. Any $AERO holder can vote-escrow their tokens and receive a $veAERO (also known as Lock or veNFT) in exchange. Additional tokens can be added to the $veAERO NFT at any time.
The lock period (also known as vote-escrowed period, hence the ve prefix) can be up to 4 years, following the linear relationship shown below:
100 $AERO locked for 4 years will become 100 $veAERO
100 $AERO locked for 1 year will become 25 $veAERO
The longer the vesting time, the higher the voting power (voting weight) of the underlying locked balance.
Additionally, Aerodrome Locks (veNFTs) can be set into Auto-Max Lock, which are treated by the protocol as being locked for the maximum duration of 4 years, and their voting power does not decay. The Auto-Max Lock feature can be turned on and off for each Lock (veNFT).