Aero has launched as a unified decentralized exchange infrastructure platform spanning seven blockchain networks, bringing together Aerodrome and Velodrome under one liquidity network and the upgraded AERO token. The project aims to attract deeper liquidity by increasing compensation for liquidity providers and directing 100% of exchange revenue to sAERO holders who allocate liquidity rewards.
The launch took place at 8:00 p.m. Eastern Daylight Time on October 21, equivalent to 00:00 UTC on October 22. According to the project, the new system is designed to coordinate onchain trading across Ethereum Mainnet, Base, OP Mainnet, Arbitrum, Robinhood Chain, Ink, and Arc.
Aero Unites Two Established DeFi Exchanges
Aero combines the operations of Aerodrome and Velodrome, two decentralized exchanges that have built substantial trading activity on Ethereum layer-2 networks. The project says the two platforms have collectively distributed more than $580 million to token stakers and captured the majority of trading volume on Base and OP Mainnet combined.
The new AERO token replaces the previous token arrangements, while existing veAERO and veVELO positions transition to sAERO. The upgraded token supply is allocated entirely to existing holders, with 94.5% assigned to the Aerodrome community and 5.5% to the Velodrome community. The distribution reflects each protocol’s share of combined revenue during the 52 weeks preceding the Aero announcement.
Aero says it has launched without venture capital backing or a token sale. It also states that the upgrade does not create additional token allocations for the team or venture investors, positioning the transition as a consolidation of existing communities rather than a conventional fundraising event.
The platform enters a market where decentralized spot exchanges generated a reported $3.1 billion in fees over the previous 12 months, according to Aero’s launch announcement. Its strategy is to compete by distributing more economic value to liquidity providers and token operators rather than relying solely on trading fees generated by individual transactions.
AERO Introduces Dynamic Rewards and Revenue Sharing
A central feature of Aero is its approach to liquidity incentives. Instead of calculating rewards exclusively around fixed, backward-looking trading activity, the protocol says it will calculate AERO rewards in dollar terms and adjust pool reward limits more frequently using projected revenue. Rewards that exceed a pool’s cap will not be minted, according to the announcement.
Aero is also introducing Slipstream V3, a concentrated-liquidity automated market maker with dynamic trading fees designed to increase during periods of rapid market movement. On supported layer-2 networks, the system can also recapture certain forms of maximum extractable value, potentially creating additional revenue for the exchange.
The platform’s cross-chain design aims to reduce liquidity fragmentation by allowing trading activity across its supported networks to draw on a unified liquidity system. Metaswaps are intended to combine bridging, routing, and swapping into a single transaction, while onchain data contracts are designed to help wallets, aggregators, and AI agents integrate with the exchange.
Under Aero’s revenue model, users who stake AERO as sAERO can allocate rewards toward selected markets. When liquidity providers choose AERO incentives, the associated trading fees become exchange revenue distributed to participating token operators. The project also plans programmable fee rebates and additional revenue streams as its product range develops.
Aero’s Predictive Allocation system is designed to reward token operators who direct incentives toward productive markets before their revenue potential becomes clear. The project argues that this approach can move liquidity toward emerging demand, although its success will depend on actual trading activity, execution, and the incentives available to participants.
The Aero Foundation’s Momentum Fund is intended to support the token economy through contributor grants, strategic market allocations, and market-aware buybacks and burns. The project says its contracts underwent five audit engagements involving Sherlock and ChainSecurity, followed by a three-week public audit contest on Sherlock. As with other DeFi protocols, audits do not eliminate smart-contract or market risks.
The launch gives Aerodrome and Velodrome users a new route to participate in a shared exchange ecosystem, but adoption will ultimately depend on liquidity depth, trading volume, revenue generation, and whether the new incentive structure performs as intended. The token upgrade and migration instructions are available through Aero’s official upgrade resources.
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