Aerodrome
The protocol in one breath
Aerodrome is an AMM where liquidity providers earn from swap fees and AERO token holders earn from voting. Each week, voters decide which pools receive freshly minted AERO. Pools that attract votes route their swap fees to those voters in return — turning every gauge into a weekly auction for liquidity.
The four moving parts
| Part | What it is | Who interacts with it |
|---|---|---|
| AMM pools | Classic v2 (stable + volatile) and Slipstream concentrated liquidity. | Traders, LPs |
| veAERO | Vote-escrow NFT representing AERO locked up to 4 years. | Token holders |
| Gauges | One per pool. Mints and routes AERO emissions to LPs. | LPs (stake here), voters (point emissions here) |
| Incentives market | A bribe layer attached to each gauge. Third parties pay to attract votes. | Protocols, voters |
Every action above is keyed to a weekly epoch, snapping shut every Thursday at 00:00 UTC.
The weekly clock
A single epoch in chronological order:
- Thursday 00:00 UTC — epoch flips. The previous epoch's fees, incentives, and AERO emissions become claimable. Vote weights reset; a new voting window opens.
- Days 0–6 — incentives accumulate. Third-party protocols deposit ERC-20 tokens onto the gauges they want to attract votes for. veAERO holders cast (or change) their votes at any time.
- Wednesday 23:59 UTC — voting closes. Whichever vote weights are in place at this snapshot are final for the epoch.
- Thursday 00:00 UTC — payout + repeat. AERO emissions for the just-closed epoch are distributed across gauges by vote share. Swap fees and incentives from that epoch flow to voters of each gauged pool. The next epoch opens.
Trading: two AMMs in parallel
| AMM | Invariant | Best for |
|---|---|---|
| Classic — stable pool | x³y + y³x = k (Curve-style) | Stablecoin pairs, LST/ETH, pegged assets |
| Classic — volatile pool | x · y = k (Uniswap v2-style) | Any uncorrelated pair |
| Slipstream | Concentrated liquidity (Uniswap v3-derived) | Tighter ranges, higher capital efficiency |
Classic pools take a flat fee set at pool creation. Slipstream pools have governance-set fee tiers and tick spacings — LPs supply liquidity to a chosen price band, and capital outside that band earns nothing. Slipstream positions are ERC-721 NFTs; staking the NFT into the pool's gauge unlocks AERO emissions on top of swap fees. A "Slipstream V2" upgrade shipped in November 2025 with refined fee tiers.
Who earns what
This is the load-bearing table for understanding the protocol.
| Pool state | LP receives | Voter receives |
|---|---|---|
| Gauged + voted on | AERO emissions (only if the LP position is staked in the gauge) | 100% of pool swap fees + all incentives deposited on that gauge |
| Gauged but no votes | Swap fees (no emissions; no redirect) | Nothing for that gauge |
| No gauge at all | Swap fees | — |
Two consequences worth internalizing:
- An unstaked LP position in a gauged, voted pool earns nothing. Fees go to voters, emissions require staking. You have to actively stake the position into its gauge.
- Voters and LPs are paid from different revenue lines. Voters get the fee stream + bribes; LPs get the inflation subsidy. Different risks, different yields, same pool.
veAERO — locking AERO for governance
Lock AERO for any duration up to 4 years. You receive a transferable veAERO NFT whose voting power is the product of the locked amount and the remaining lock time. Both decay linearly toward zero as the lock unwinds.
A veAERO NFT can be:
- Extended — refresh the lock duration
- Merged — combine two veNFTs into one
- Split — divide into smaller veNFTs
- Transferred — veAERO is an ERC-721, freely tradable
When the lock expires the underlying AERO becomes withdrawable.
Incentives ("bribes")
A market, not a feature. Anyone can deposit any ERC-20 onto a gauge's incentive contract during an epoch. At epoch close those tokens go to voters of that gauge, pro-rata to vote weight.
The economic logic: a protocol that wants AERO emissions directed to its liquidity pool pays veAERO holders to vote that way. The dollars paid per veAERO-vote-attracted is the protocol's effective cost of liquidity.
Rebases
A small slice of each epoch's AERO emissions is paid back to veAERO holders as a rebase — partially offsetting the dilution that would otherwise come from emissions flowing to non-locked supply. The rebase scales with the ratio of locked AERO to circulating supply.
Relays — passive veAERO
A Relay pools many users' veAERO into one bloc and votes it on a defined strategy. After each epoch the Relay:
- Claims fees + incentives earned by its votes.
- Either auto-compounds them into more locked AERO (growing voting power) or converts them for withdrawal.
The protocol-run veAERO MAXI Relay is the compounding reference implementation. Third-party Relays exist with alternate strategies (USDC payout, partial compound, etc.).
Emissions schedule
AERO supply is not fixed. Emissions follow three phases:
| Phase | Mechanic |
|---|---|
| Growth (weeks 1–14) | Starts at 10M AERO / week (2% of initial supply), increases 3% per week. |
| Decay | Weekly emissions decrease 1% per week. |
| Tail — "Aero Fed" | Once emissions fall below ~6M / week, the protocol emits a percentage of circulating supply (initially 0.003 / week). The rate can be adjusted within bounded steps by EpochGovernor votes. |
Governance
- veAERO votes direct emissions, every epoch.
- EpochGovernor adjusts the tail-emissions rate within bounded steps.
- Protocol Governor controls higher-level parameters (gauge whitelisting, contract upgrades, treasury actions).
Both governance bodies are vote-weighted by veAERO.
Adjacent surface
- Mini app — Aerodrome ships a Farcaster mini at
/minifor in-feed swaps. - Liquid wrappers — third-party protocols (e.g. iAero) issue transferable wrappers of locked AERO, giving holders veAERO-style yield without managing the lock directly. These are not part of Aerodrome but interact with it.
Takeaways
- Aerodrome is a ve(3,3) DEX on Base combining classic AMM pools (stable + volatile), Slipstream concentrated liquidity, vote-escrow governance, and a weekly incentive market.
- Every economic action — voting, fee payout, incentive distribution, emission allocation — is keyed to a single epoch that closes Thursday 00:00 UTC.
- In a gauged pool that received votes, 100% of swap fees flow to voters; LPs earn AERO emissions instead — but only if the LP position is staked into the gauge.
- veAERO is a transferable NFT representing AERO locked up to 4 years. Voting power = locked amount × remaining lock time, decaying linearly to zero.
- Incentives are an open market: anyone deposits ERC-20s on a gauge, voters of that gauge collect them pro-rata.
- Emissions run a 14-week growth phase, then a 1%/week decay phase, then a tail "Aero Fed" regime emitting a governance-adjustable percentage of circulating supply.
- Relays pool and delegate veAERO voting with auto-compound or conversion strategies; veAERO MAXI is the protocol-run reference.
- Slipstream is a Uniswap v3-derived CL AMM with governance-set fee tiers and tick spacings; positions are NFTs stakeable in the pool's gauge.