# Aerodrome accounts for most of the trading volume on Base—why can’t AERO be judged only by protocol strength?

Many people interpret Aerodrome as another decentralized exchange on Base. That understanding is only half right. The real problem it solves is how a new chain can coordinate traders, liquidity providers, and deep-pocket project teams over the long term—not by relying on a one-time subsidy to temporarily pull in funds.

## How does this mechanism work

Users complete swaps in the trade pool and pay the fees; liquidity providers receive AERO emissions. After AERO is locked, it becomes veAERO. Voters decide the direction of emissions for the next round and claim the fees and project incentives from the corresponding pool. Projects proactively attract votes to secure deeper liquidity. Trading, emissions, voting, and fees therefore form a loop.

This is also Aerodrome’s most important advantage: it not only provides trading products, but also organizes liquidity demand on the Base. In this round of publicly recorded data, daily trading volume exceeded $300 million, accounting for about two-thirds of Base decentralized spot trading; real users and demand have already reached scale.

## Protocol revenue is not the same as ordinary AERO token holder income

Here’s an easily overlooked value-capture boundary. Liquid AERO does not automatically receive protocol fees. Holders must lock into veAERO, accept a maximum four-year liquidity restriction, and participate in voting in order to claim the corresponding economic rights.

Therefore, “protocol fees are high” cannot directly imply that “buying AERO at any price is reasonable.” People who aren’t willing to lock tokens long term bear the token price risk and ongoing dilution, yet they do not receive full fee entitlements. When truly comparing valuation, you must factor in the cost of locking.

## No large unlock date doesn’t mean there’s no supply pressure

AERO uses weekly emissions, and the annualized level disclosed by the project is about one-tenth. Rewards mainly go into liquidity, with part of them sold to cover capital costs; the team’s fixed share is locked long term. It doesn’t have the traditional event of a sudden large token expiry, but there is dilution accumulating every day.

The key to assessing supply risk is not searching for a specific unlock date, but whether fee growth and new locking can stay faster than emissions. If trading volume, fees, and locking all grow together, new supply can be absorbed. If fees stall, emissions will gradually dilute the value of each token.

## Competition and upgrades determine the next phase

Uniswap and PancakeSwap compete for cross-chain liquidity; aggregators and other trading entry points let users bypass any single protocol. Aerodrome’s advantage is that the Base local flywheel is already spinning. The risks are network concentration and the long-term locking threshold.

The next-gen Aero has already published the first batch of core code, though it’s still in the audit wrap-up stage. It plans to make liquidity allocation more automated and expand to more networks and assets. Releasing code increases the likelihood of delivery, but it can’t be counted as revenue in advance; only after formal deployment—bringing sustained trading, fees, and locking—will the upgrade truly add value.

## My view

I think Aerodrome is a good protocol worth tracking long term, but the current pricing hasn’t yet fully compensated for ongoing emissions, locking restrictions, and migration risk. You should judge the protocol’s competitive strength and the token’s buy-side odds separately—this is one of the most important lines of inquiry for researching AERO.

Next, I’ll keep updating Aero’s official deployments, fee share, and changes in emissions and locking. Do you care more about the Base dominance it has already formed, or are you more concerned about the long-term emission and locking costs?