Last Updated on September 1, 2023 by Bitfinsider
Just one day after going live, a platform that offers prizes and the ability to transfer tokens for cheap fees attracted almost $150 million, increasing the locked value of the DeFi ecosystem on the Base blockchain by 80%.
In order to serve as a “business development protocol” for the Base ecosystem, Velodrome and Base engineers created Aerodrome. This product will support companies throughout their launch, onboard new projects and tokens, and create liquidity for the network.
The platform’s designers aspire to replicate the apparent success of Velodrome, which is among the most popular platforms on the Optimism network and has over $288 million in locked value. Similar to Velodrome, Aerodrome gives its AERO tokens to users of the network that do swaps, offer liquidity, or take part in governance.
Developer materials state that there is a 500 million token supply of AERO, of which 450 million are locked for four years. The 50 million tokens set out for voter incentives and initial liquidity are the only liquid AERO at launch.
Decentralised exchanges encounter a significant issue when incentives emitted are linked to overall liquidity instead of trading volume, resulting in protocol costs. Products like Aerodrome, which exchange AERO for veAERO, a vested AERO token, enable holders of its native token, AERO, to lock their holdings for a period of time ranging from one week to four years.
A longer lock gives the user more veAERO, which increases their ability to vote on governance issues. The Velodrome uses the same principle.
The locked veAERO can be exchanged on several NFT exchanges, as they are represented as NFTs. Instead than needing to buy tokens, lock them up, and maintain that position, other users can then buy these NFTs to get full exposure to the ecosystem.
With the veAERO tokens, users can participate in platform governance and, more significantly, influence the trading pool reward structures that are made available on the platform. These voters are compensated with 100% of all fees and bribes obtained by the particular pools for whom they cast ballots.
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