Aerodrome Finance: what it is, how it worked and the move to Aero

What Aerodrome Finance is

Aerodrome Finance is a decentralized exchange (DEX) on Base, an Ethereum layer-2 network. It launched on 28 August 2023. Its smart contracts hold pools of paired tokens, price swaps against them and pay rewards to the people who provide the liquidity. It was built on the code of Velodrome V2, a DEX on Optimism, and its documentation describes it as inheriting that design. If you are new to layer-2 networks, our explainer on layer 2 rollups covers what Base is.

Aerodrome became Aero in October 2026

The most important current fact about Aerodrome is that it has been replaced. At 00:00 UTC on 22 October 2026, Aerodrome and Velodrome upgraded together into a new exchange called Aero, at aero.xyz. Aero launched on Base, Ethereum, OP Mainnet, Arc, Ink, Robinhood Chain and Arbitrum. According to Aero's upgrade hub:

• AERO emissions on Aerodrome stopped at launch, and all Aerodrome gauges (the contracts that paid AERO rewards to pools) were deactivated.
• The aerodrome.finance front end stays live to handle upgrades but may be shut down later.
• Holders convert 1 AERO to 1 new AERO, and 1 veAERO to 1 sAERO (staked AERO) with the remaining lock term unchanged. VELO converts at 0.044 AERO.
• There is no deadline and no penalty for waiting, but the upgrade cannot be reversed.

The rest of this page describes how Aerodrome worked, which is still what governs any position left on it, and who stands behind it.

Who runs Aerodrome

Two organizations are named in Aerodrome's own documents. The Aerodrome Foundation is the contracting party in the website's terms of use (last updated 28 July 2026) and is described as the protocol's "neutral steward". Dromos Labs is named as the core development company, the same team behind Velodrome. The project says it launched with no venture funding and no token sales.

Some powers sit with an Emergency Council, made up of Aerodrome team members and figures from the Optimism and Base communities, according to the security page. It can kill or revive a gauge, rename a pool and deactivate managed veNFTs. Separate multisig wallets hold the Aerodrome Foundation and Incentives funds and the Public Goods Fund. The terms send disputes to binding individual arbitration with JAMS and waive class actions.

How Aerodrome worked

Aerodrome uses a vote-escrow model, meaning its rewards are steered by people who lock its token. The cycle ran in seven-day epochs, from Thursday 00:00 UTC to Wednesday 23:59 UTC:

1. Traders swapped in stable pools (built for correlated assets such as stablecoins), volatile pools (x * y = k), or Slipstream concentrated-liquidity pools, where liquidity sits in a chosen price range.
2. Liquidity providers chose between staking their position in the pool's gauge to earn AERO emissions, or leaving it unstaked to earn swap fees directly. A deposit could not earn both.
3. veAERO voters locked AERO for up to four years: 100 AERO locked for four years gave 100 veAERO, and for one year, 25. Each week they voted on which pools received the next epoch's emissions. In return they received 100% of the swap fees from staked liquidity in those pools, plus any incentives projects deposited to attract votes.

For the trade-off between earning fees and earning token rewards, see staking vs liquidity providing. Our AMM explainer covers the pool math.

Fees

Aerodrome does not publish a fixed fee schedule. In the pool factory contract, new basic pools start at 0.05% for stable pools and 0.30% for volatile pools. A fee manager can change those defaults or set a custom fee for any pool, up to a hard cap of 3% written into the contract, and the documentation says Slipstream fees can be adjusted for market volatility. On a $1,000 swap through a volatile pool at the default 0.30%, the fee is $3.00, plus Base gas. The rate actually charged is the one shown in the swap preview.

Where that fee went depended on the liquidity. Fees from staked liquidity went to veAERO voters. Unstaked liquidity kept its fees, except that the protocol could take a share in emissions-eligible pools; the documentation gives the default as 10% in eligible Slipstream pools. The documentation also says 5% of weekly emissions went to a Dromos Labs team address, compounded into a max-locked position.

AERO supply

AERO launched with an initial supply of 500 million, 450 million of it distributed as locked veAERO. The largest slice, 200 million, was an airdrop to Velodrome's veVELO lockers. The public goods fund, team funding and "Flight School" allocations were all auto-max-locked. Weekly emissions started at 10 million AERO and were later set by veAERO votes. Aerodrome put total supply at about 1.88 billion in April 2026, and Aero's upgrade hub gives 2.01 billion at the October 2026 launch. Any AERO that is not upgraded will never reach circulation in the new system, according to the hub.

Security, licence and restrictions

Aerodrome is non-custodial: the terms state the Foundation never has custody of user assets. The contracts specification is precise about what can change. It calls the protocol "immutable", but notes that the factories are upgradable, so new factory versions can be released and users decide whether to migrate. Aerodrome's about page says the core contracts were audited by Spearbit and ChainSecurity, and it points to Velodrome's security page for audit reports and the bug bounty. Its Pool Launcher was audited by MixBytes between 12 September and 3 October 2025.

The contracts are under the Business Source License 1.1. The licence file names Perpetual Cyclist Services LLC as licensor and "Velodrome Smart Contracts" as the licensed work, converting to GPL-2.0-or-later on a change date published on-chain.

The terms bar residents of 35 listed countries, including China, Russia, Turkey, Ukraine, Iran, North Korea, Venezuela, Serbia and Moldova, as well as sanctioned persons. The United States is not on that list, but US persons may not access unregistered tokenized securities through the site. Residents of Australia, Singapore, the UK and Canada may not access securities at all.

The Aero upgrade is a likely target for phishing: fake "migration" pages ask users to sign approvals for their tokens. Reach the upgrade only from aerodrome.finance or aero.xyz, typed directly; our guide to avoiding wallet scams and phishing explains what to check before signing. The decentralized exchange ratings list the DEXs we cover, without this page grading any of them.