As a seasoned crypto investor with a knack for spotting promising projects, I must admit that Aerodrome has caught my attention like no other DeFi gem in recent memory. Having closely observed the meteoric rise of this DEX on the Base network, I can confidently say it’s not just a passing fad but a game-changer in the making.
As an analyst, I’m observing an extraordinary expansion in the Coinbase layer-2 network Base. The Total Value Locked (TVL) in this network has experienced a significant jump, surpassing the $2 billion mark – more than five times its value at the start of 2024. This impressive growth can be attributed primarily to Aerodrome, a decentralized exchange (DEX), whose influence on this development has been undeniably substantial and remarkable.
On the Base network, Aerodrome stands as a significant player in the DeFi landscape, being the largest Decentralized Exchange (DEX) and holding nearly half of the total value locked (TVL). Since starting with only $120 million in deposits back in January, it has accumulated over $1 billion in deposits, indicating a substantial growth.
Aerodrome: Origin and How It Became the Driving Force behind Base Network
The primary reason behind Aerodrome’s achievements can be linked back to its initial beginnings. To put it simply, it was established in September 2023, originating as a spin-off from Velodrome, a DEX on the OP Mainnet, which was developed by Velodrome Finance.
Notably, both Aerodrome and Velodrome incorporate the ve(3,3) design scheme, a creation of Andre Cronje, that offers user incentives via vote-secured administration.
Currently, the system motivates users to invest their Aerodrome’s AERO governance tokens to acquire veAERO. In time, those who possess veAERO could potentially be entitled to a portion of the protocol’s fee earnings.
Given the governance structure established, it wasn’t unexpected that Aerodrome climbed up the ladder swiftly. Not only did it draw substantial liquidity, but it also gained popularity among DeFi users eager to boost their earnings.
It’s worth noting that Aerodrome’s expansion hasn’t been limited in any direction, instead it’s been robust across all aspects. Remarkably, this platform has grown at a rapid pace to outperform other DeFi titans like Uniswap and Aave within the Base ecosystem.
Data from DeFiLlama proves this by showing that Aerodrome does not only lead in terms of TVL but also in the area of trading volume and fees generated.
Talking about trade volumes, Aerodrome handled a staggering $9.02 billion worth of transactions last month. This puts it on par with leading Solana-based DEXs like Orca and Raydium, which reported volumes between $9-$10 billion each.
As an analyst, I can affirm that although Aerodrome currently lags behind Uniswap on Ethereum and PancakeSwap on BNB Chain in terms of volume, there’s no question about its significant role in the DeFi landscape, especially on the Binance Smart Chain (Base network).
Based on Aerodrome’s impressive performances thus far, it appears that the exchange continues to hold significant sway and is expected to significantly boost the expansion of the Base network. This is especially true as users increasingly demand quicker, more flexible solutions for trading and liquidity provision.
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2024-10-03 12:28