Aerodrome

What fees exist, and who gets paid?

Aerodrome Slipstream 2 is currently structured so liquidity providers do not receive swap fees directly:

• LP share of fees: 0.0%
• Protocol take rate: 100.0%
• Fees (24h): $206.5K
• Protocol revenue (24h): $206.5K (fees and revenue match → 100% fee capture)
• Fees (7d): $1.0M
• Fees (30d): $4.9M
• Fees (all-time): $220.0M (and $220.0M all-time revenue)

In practice, Aerodrome routes the trading-fee value to veAERO voters, not unstaked LP positions. Per the docs: “veAERO Voters are rewarded… with 100% of the protocol trading fees from the previous epoch and any additional voters incentives.” Epochs run weekly (Thu 00:00 UTC → Wed 23:59 UTC).

Fee trend snapshot (recent vs trailing)

Using the fee history aggregates:

• 30d average fees/day ≈ $4.9M / 30 = $163K/day
• 7d average fees/day ≈ $1.0M / 7 = $143K/day
• Latest 24h fees: $206.5K

That places the last day ~27% above the trailing 30-day daily average, consistent with Aerodrome’s high current activity ($525.0M 24h volume, $9.60B 30d volume, $197.6M TVL on Base).

How LPs earn on Aerodrome

LP returns on Aerodrome are predominantly emissions-driven: only liquidity that is staked in gauges receives AERO emissions (docs). This is why pool APY is typically split into base APY + reward APY.

Top pools by TVL (return + risk context)

Below are the largest pools and their current yield breakdowns.

Risk-adjusted notes (who these suit)

• More conservative (lower IL): MSUSD-USDC (stable/stable) at 4.0% APY is structurally lower impermanent-loss exposure than volatile pairs.
• Balanced: WETH-USDC at 50.2% APY is attractive, but carries meaningful IL risk if ETH trends.
• Aggressive: the smaller USDC-CBBTC pool showing 1333.7% APY is extremely incentive-heavy relative to TVL ($4.4M); treat as high volatility in rewards and positioning risk.

Protocol-wide context: Aerodrome shows 246 pools with median APY 80.2% and a weighted average APY 709.3% (skewed by very high outliers).

Two core “passive income” paths

Aerodrome’s passive yield is centered on (1) staking LP liquidity into gauges to receive emissions, and (2) locking AERO into veAERO to receive fee distributions and vote incentives.

1) Stake LP positions (emissions)

• Per docs: “Only staked (in the protocol gauges) liquidity receives emissions.”
• Emissions are allocated weekly: “Every epoch liquidity providers receive $AERO token emissions proportionally to the votes the pools accumulate.”
• Practically, this means you provide liquidity, then deposit/stake the position in the gauge for that pool to access the reward APY component.

2) Lock AERO → veAERO (fee + incentives)

Locking converts AERO into a governance NFT (veNFT):

• Max lock: up to 4 years
• Voting power scales linearly:
  • 100 AERO locked for 4 years → 100 veAERO
  • 100 AERO locked for 1 year → 25 veAERO
• Auto-Max Lock option: treated as a perpetual 4-year lock with non-decaying voting power (toggleable per lock).

What veAERO earns:

• 100% of protocol trading fees from the previous epoch (weekly)
• “Any additional voters incentives” from the current epoch (commonly used to attract votes to specific pools)

What’s missing (for yield forecasting)

Aerodrome discloses fee totals (e.g., $4.9M in 30d fees) but does not provide, here, the total veAERO locked or per-vote ROI—so your personal veAERO APR depends on how much veAERO supply is competing for those fees and incentives each epoch.

1) Weekly emissions (core incentive engine)

Aerodrome’s primary incentive program is its vote-directed emissions:

• Weekly epochs (Thu → Wed)
• LP emissions: “Every epoch liquidity providers receive $AERO token emissions proportionally to the votes the pools accumulate.”
• Eligibility: “Only staked (in the protocol gauges) liquidity receives emissions.”

This design creates an incentives marketplace: pools compete for votes; LPs follow emissions; voters earn fees and incentives.

2) veAERO fee distribution (direct share of protocol revenue)

Unlike many DEXs where LPs receive swap fees, Aerodrome directs trading fee value to voters:

• veAERO voters are rewarded with “100% of the protocol trading fees from the previous epoch”.
• This is consistent with the current accounting: LP share 0.0% and protocol take rate 100.0%, with $206.5K fees = $206.5K revenue in the last 24h.

3) Flight School (recurring bonus veAERO program)

Aerodrome also runs a structured locker rewards program called Flight School:

• Bonus cadence: “Every four weeks… distributes bonus veAERO to qualifying users.”
• Qualification rule: “create a new lock of at least 2,500 veAERO within that class period (four weeks).”
• Distribution rule: proportional to your share of qualifying veAERO in that class (e.g., 5% share → 5% of the class bonus).
• Boost: Coinbase One members’ locks are weighted 1.3x for bonus calculations.
• Track record: since launch, Flight School has bought back and distributed over 42.6M AERO to lockers as veAERO.

4) Voter incentives (bribes)

The docs explicitly mention voters also receive “additional voters incentives” in the current epoch, on top of fee distributions—these are typically used by protocols/teams to direct votes to their pools.

🛡️ Conservative (capital preservation focus)

Goal: minimize impermanent loss, accept lower yields.
1) Provide liquidity to a stable pool like MSUSD-USDC (stablecoin pool) with 4.0% APY (30d avg 6.8%).

2) Stake the position in the pool’s gauge (emissions require staking).

3) If you want fee exposure without LP price risk, consider locking AERO to veAERO to earn weekly fee distributions (amount varies by epoch).

Expected APY range: roughly 3–8% on stable LPs (based on shown stable pool APYs), plus variable veAERO fee/incentive income.

⚖️ Balanced (moderate risk/reward)

Goal: blend emissions with manageable IL.
1) Split capital across 2 pools: e.g., WETH-USDC (50.2% APY) and a lower-volatility ETH derivative pool like WETH-MSETH (3.1% APY).

2) Stake both in gauges to access reward APY components (e.g., WETH-USDC reward APY 29.9%).

3) Lock some AERO to veAERO and vote toward the pools you LP to potentially “double dip” (LP emissions + voter fees/incentives).

Expected APY range: roughly 20–70%, anchored by large-pool examples like WETH-USDC 50.2% and WETH-CBBTC 44.9%.

🔥 Aggressive (max yield focus)

Goal: maximize emissions/incentives; accept high volatility and active management.
1) Target high-incentive pools such as USDC-CBBTC with 121.4% APY (or smaller pools showing extreme rates like 1333.7% APY on $4.4M TVL).

2) Use tighter/concentrated positioning (Slipstream) only if you can monitor ranges—out-of-range liquidity can reduce realized returns.

3) Lock AERO with Auto-Max Lock to maintain maximum voting power and pursue epochs with stronger “voters incentives.”

Expected APY range: roughly 80% to 1000%+ where incentives are unusually high (noting these can change quickly epoch-to-epoch).

Audits and code lineage

• Audit count: 3 (firms and report links not listed here).
• Aerodrome states it inherits the contract architecture and full security maintenance from Velodrome V2, which “has been audited and runs a bug-bounty program.” (Bounty terms/amounts are not specified in the available materials.)

Governance / admin risk controls

Aerodrome discloses an Emergency Council with explicit powers:

• can kill a gauge / revive a gauge
• can set a new emergencyCouncil
• can set custom name/symbol for a pool

Key addresses are published, including:

• Emergency Council: 0x99249b10593fCa1Ae9DAE6D4819F1A6dae5C013D
• Foundation & incentives multisig: 0xBDE0c70BdC242577c52dFAD53389F82fd149EA5a
• Public Goods Fund multisig: 0x834C0DA026d5F933C2c18Fa9F8Ba7f1f792fDa52

On-chain maturity indicators

• Launch date: 28 Aug 2023 (docs)
• Fee history: 688 days of data
• Scale: $197.6M TVL, $9.60B 30d volume, and $220.0M all-time fees

Impermanent loss (IL) estimates for top volatile pairs

Pool-level IL stats aren’t provided (7d IL is N/A), so use scenario math for constant-product exposure:

• If a volatile pair (e.g., WETH-USDC, USDC-CBBTC, WETH-CBBTC) moves +50% (price ratio r=1.5), IL ≈ 2.0%.
• If it doubles (r=2), IL ≈ 5.7%.
• If it triples (r=3), IL ≈ 13.4%.

Slipstream’s concentrated liquidity can increase sensitivity if your range is narrow—so higher APY pools should be evaluated alongside range-management and price-risk.

Aero Launch: earn fees as a token/project (not just as an LP)

Aerodrome includes Aero Launch, a guided launch flow for creating new liquidity pools with economics geared toward project treasuries.

Key mechanics explicitly advertised:

• “Create a liquidity pool in minutes” (permissionless)
• “Earn 100% of swap fees—no platform cut” for the launcher
• Native, fee-free liquidity locking: “Locking liquidity is simple, natively supported, and fee-free.”
• Visibility tooling: tokens can be flagged as “Emerging” alongside Listed tokens
• Optional pool types: “Deploy a basic or concentrated pool” and deposit “as a pair or single-sided.”

Why this matters for earners

This is a distinct earning path for teams/communities:
1) Launch the pool and become the fee recipient (project revenue stream).

2) Optionally use those fees to bootstrap incentives or grow treasury (“Fee-based APRs attract additional LPs”).

3) If the pool graduates to emissions-based pools, it can access the weekly vote/emissions flywheel.

This mechanism is separate from standard LPing and is most relevant to founders, DAOs, or communities that want recurring swap-fee income tied to their token’s trading activity.

Aerodrome is a high-activity Base DEX (TVL $197.6M, 30d volume $9.60B) where earning is optimized around (a) emissions to staked LPs and (b) fee + incentive capture by veAERO voters, not swap fees paid directly to LPs.

Top 3 strengths

1) Strong real fee base to distribute: $4.9M fees in 30d and $220.0M all-time fees.
2) Clear fee routing to voters: 100% protocol take rate and docs stating veAERO receives 100% of prior-epoch trading fees.
3) Heavy incentive stack: median pool APY 80.2% (246 pools), plus Flight School distributing 42.6M+ AERO to lockers as veAERO.

Top 3 weaknesses

1) LPs receive 0% swap fees directly (LP share 0.0%), making returns more dependent on emissions/incentives.
2) Lock complexity & duration risk: veAERO locks up to 4 years (or Auto-Max mechanics) and ROI varies by epoch.
3) IL and active management risk: volatile and concentrated positions can incur meaningful IL (e.g., ~5.7% IL on a 2× move for constant-product exposure).

One-sentence recommendation

Best for users willing to engage with vote-escrow (veAERO) + gauge staking to capture fees and incentives; less ideal for “set-and-forget LPs” expecting swap-fee income.