Introducing Aerodrome
The Superchain is coming, Coinbase’s Base will be its first frontier.
The Layer 2 Revolution
Growth on Ethereum Layer 2s is accelerating, and users and builders are moving to L2s to take advantage of lower gas fees, faster transactions, and shared security. In the last 3 months, daily transactions on L2s have surpassed those on Eth Mainnet by up to 2X, and TVL on Optimism and Arbitrum alone now amount to 11% of the L1 Ethereum TVL.
While multi-chain DEXs struggle to meaningfully impact L2s, ecosystem-focused protocols like Optimism’s Velodrome have shown themselves to be growth engines for emergent ecosystems.
Velodrome is a leading L2 DEX with approximately $250M in TVL and over $5.9B in cumulative volume. As Optimism’s central liquidity hub, Velodrome is dedicated solely to the ecosystem’s growth. It is Optimism’s largest and most active economic and business development engine.
Focusing entirely on serving Optimism has given Velodrome a unique competitive advantage. Velodrome’s incentives are fully aligned with its broader ecosystem, allowing it to capture a disproportionate share of activity and maximize the impact of collective flywheel participation.
Base needs its own Velodrome.
A Based Optimistic Vision
While L2 networks offer a promising solution to Ethereum’s scalability challenges, the fragmented user experience poses a significant hurdle. Users transacting across different L2 ecosystems often need to bridge funds and change network settings on their wallets before completing the process. This fragmentation introduces complexity and creates friction for users.
To enable the interoperability, scalability and seamless user experience needed to unlock mass adoption of on-chain services, Optimism has embarked on a journey to create the Superchain, a network of Layer 2 environments sharing security, communication, and infrastructure development to enable global-level scale.
Two foundational building blocks of the Superchain will be the Optimism Mainnet and Coinbase’s Base, a secure, low-cost, developer-friendly Ethereum L2 built on the OP Stack. As the underlying technology powering a unified Superchain experience develops, it will be critical for the chains and ecosystems built on the OP Stack to grow and thrive.
Both Optimism and Base need native solutions to service ecosystem liquidity needs, support economic development, and fund public goods.
Introducing Aerodrome
This is why we’re excited to announce Velodrome’s new initiative with the Base team and our partners in developing and launching Aerodrome, Base’s central AMM and liquidity layer.
By taking the playbook Velodrome invented and running it on Base, Aerodrome protocol will represent the latest in ve(3,3) technology and is planned to include features such as the Night Ride UI, concentrated liquidity, and a dynamic AERO FED.
Like Velodrome, Aerodrome will act as a business development layer for the Base ecosystem, supporting projects as they launch, onboarding the next generation of protocols, and generating liquidity for the ecosystem.
Supporting the Foundations
The Aerodrome Team believes in the public goods vision developed and implemented by the Optimism Collective, where public goods act as a propellant for the growth of the collective economy. Base, prior to its integration to the upcoming Superchain, is in itself a sovereign ecosystem. It has its own unique needs, goals, community, user and developer base; without a native token network, it is critical that protocols take ownership of kickstarting and sustaining a public goods flywheel.
To that end, a public goods jet engine is built directly into Aerodrome. In this system, 25% of Aerodrome’s initial votepower is reserved for Ecosystem Goods. This will help power liquidity on assets crucial to ecosystem success, whilst fees earned from these pairs will be used for public goods funding (PGF) and public goods votepower.
Optimism, through their OP token, have been experimenting in Retroactive PGF distribution with a focus on education. BASE has a firm focus on application development and user experience, so we’ll work with the BASE ecosystem to build a system using AERO that directs PGF toward work that supports that develop and user focus, further expanding the ecosystem and fueling the Aerodrome flywheel.
Just as Optimism has OP to fund public goods, Base will have AERO.
Back to Base
Aerodrome will be the home airbase for liquidity and public goods on Base; it’s an ecosystem-maxi project designed to kickstart and fuel the combustion of what may well evolve to be the world’s most prominent on-chain user onboarding engine.
Aerodrome and Velodrome will partner closely while serving as the primary hubs of their respective ecosystems, developing and growing the two most important terminals of the Superchain.
As the primary stakeholders in the Velodrome model, veVELO lockers will receive the only community allocation and the single largest allocation of the initial veAERO distribution via a launch airdrop. That means that 40% of the intial veAERO will be distributed to veVELO lockers after a (timing TBA) pre-launch snapshot of veVELO lockers.* This will give Velodrome’s most committed lockers, those already deeply familiar with ve(3,3) mechanics, the opportunity to kickstart the Aerodrome flywheel.
We’ll share more details in the coming weeks and months.
*Note: The snapshot will only include new locks of VELO by individuals and non-aggregation-layer protocols that occurred following the launch of Velodrome through the TBA snapshot date. This means granted veVELO balances that went to the Velodrome Team or launch partners will not be included in the airdrop. Likewise, secondary $veVELO layers that accepted user deposits of VELO and locked it on their behalf will not be included. We estimate this means roughly 141M veVELO (~20%) will not be included, increasing the proportion of the drop for all other lockers.
