Uniswap's new proposal reduces LP earnings, but Aero integrates LP into the entire protocol's cash flow.
Written by: Sanqing, Foresight News
TL;DR
On November 12, Dromos announced the integration of Aerodrome and Velodrome into a unified entry point called Aero at the New Horizon launch event. This forms a central hub for cross-chain shared liquidity in a multi-chain environment.
The new plan covers Base, Optimism, the Ethereum mainnet, and the institutional chain Arc. Dromos positions Aero as a central scheduling layer for unified governance, incentives, and routing.
AERO and VELO will merge into a single token, with the original community shares mapped according to existing weights, and the new token corresponding to the future income of the entire cross-chain system.
MetaDEX 03 serves as a core upgrade, coordinating emissions and real income through a dual-engine approach, and introducing endogenous MEV auctions, dynamic fees, and cross-chain routing, forming a reusable multi-chain liquidity operating system.
Dromos plans to launch Aero on the Ethereum mainnet and Arc in the second quarter of 2026.
On November 12, Dromos held the New Horizon launch event. Just the day before, founder Alexander shared Uniswap's UNIfication proposal (initiating fee mechanisms, retroactive token burns… Will the new proposal help Uniswap reclaim its throne?), stating that competitors made significant mistakes at a critical moment and directed the discussion towards the launch event. During the event, Dromos introduced two core elements: first, the integration of Aerodrome and Velodrome into a unified liquidity entry point Aero, serving as a central hub for future expansion to more Ethereum-based chains; second, the release of the new MetaDEX 03 suite, aimed at upgrading the protocol layer's income structure, LP incentive mechanisms, and inter-chain liquidity scheduling. The focus of the entire launch was to consolidate the originally fragmented DEX system into a scalable liquidity operating network.
Dromos's Existing Dual Deployment on Base/Optimism
Before entering the new AERO, Dromos summarized its operations over the past two years on Base and Optimism. Aerodrome and Velodrome employ completely consistent mechanisms: the same MetaDEX core, the same ve model, the same gauge weight system, and the same bribe market. They are two deployments of the same system on two chains, with almost no difference in operational logic.
From an on-chain performance perspective, Aerodrome is fully focused on Base and has established a long-term stable advantage on that chain. According to data from DeFiLlama on the day of writing, its TVL is approximately $467 million, with annual fee income exceeding $170 million and a 30-day trading volume reaching $18.6 billion. Among DEXs on Base, Aerodrome consistently occupies a core position. In contrast, Velodrome's deployment center remains on OP Mainnet, but as the OP Stack ecosystem expands, it has extended to emerging chains such as Ink, Soneium, and Unichain. The current total TVL across all chains is approximately $57.79 million, with OP Mainnet accounting for nearly two-thirds. Its 30-day trading volume is about $1.386 billion, maintaining long-term activity within the DEX system on OP Mainnet. Both are among the top in trading volume within their respective ecosystems, with differences possibly stemming from the scale of the chains, user structure, and ecosystem maturity.
The core structure of both is a continuously operating incentive loop. The underlying AMM and routing are handled by MetaDEX, with the ve model binding LP earnings, incentive weights, and long-term locking together. If token issuers wish to enhance the liquidity of their pools, they will actively provide incentive budgets in the bribe market to attract ve votes. ve holders allocate votes based on bribe earnings, and the voting results determine the gauge weights of the pools; the higher the weight, the more AERO/VELO emissions the pool receives weekly. As emissions increase, the pool's APR rises, prompting LPs to migrate in to provide liquidity, forming a closed loop of "project parties providing incentives, ve distributing incentives, and LPs following the earnings."
Dromos summarizes the common pain points faced by the industry as the "DEX trilemma": traders need depth and stable execution, LPs need risk-controlled earnings, and protocols need sustainable incentive structures. Over the past two years, Aerodrome and Velodrome have consistently validated this playbook on two chains using the same set of mechanisms—by capturing core liquidity, coordinating incentives with ve + bribe, and continuously expanding the ecosystem, allowing DEXs to evolve from single-point products into on-chain infrastructure. Internal data also shows that stable ranges can be maintained solely through fee income, with TVL utilization efficiency ranking among the industry's top, and most value flowing back to stakers and LPs through veAERO/veVELO, aligning incentives with long-term value.
It is on this foundation of accumulation that Dromos positions the new Aero as a unified mapping of the entire DEX productivity, rather than a single token for a DEX on a specific chain.
Why Upgrade to Aero: Cross-Chain Liquidity Needs a Unified Scheduling Layer
After reviewing existing deployments, the launch event shifted focus back to Aero. This upgrade is not merely a simple merger of two DEX brands but aims to address the structural issues that have arisen in the Ethereum ecosystem following the parallel development of multiple chains.
The Ethereum ecosystem has evolved from the early "L1 + a few scaling chains" to a network composed of L1, multiple L2s, application chains, and institutional chains. For users, different chains mean different interfaces and fee rates; for project parties and LPs, the same asset needs to have pools and incentive designs replicated across multiple chains, with liquidity fragmented across several isolated environments.
Dromos pointed out during the live broadcast that if the approach of "one independent DEX per chain" continues, it can only replicate old models and cannot address the fragmentation of cross-chain liquidity. Therefore, the core goal of Aero is to establish a unified liquidity scheduling logic across multiple chains, including unified routing, unified incentive distribution, unified governance structure, and a cross-chain shared economic model.
The launch event also mentioned another important variable: Arc, a new L1 launched by USDC issuer Circle. Arc is an institutional-focused L1 that uses stablecoins as gas, primarily serving settlement and tokenized assets. Arc will provide a complete set of compliance and certification interfaces (including address verification, risk levels, KYC/KYB proof, source of funds proof, etc.) that external protocols can call as needed. Dromos emphasized that Aero will have the capability to integrate these interfaces, enabling it to adapt to both DeFi ecosystems and institutional scenarios.
On one side are public L2s like Base and Optimism, and on the other side is institutional chains like Arc. Between these two ends, Dromos positions Aero as a "central liquidity hub": unifying network-level liquidity and routing above, while deploying trading and incentives on different chains using the same logic below, and being compatible with the certification system of institutional chains.
Aero's Structure: Protocol Integration, Token Merger, and Deployment Roadmap
After establishing its role, the launch event presented the structural plan for Aero, involving protocol layer integration, token layer merger, and future deployment rhythm.
At the protocol level, Dromos stated that it will converge Aerodrome on Base and Velodrome on OP Stack into a unified framework. Front-end interactions will gradually unify under Aero, while the underlying will fully switch to MetaDEX 03 to handle trading, routing, liquidity, and settlement. During the transition period, both sites will continue to operate, but governance, incentive distribution, and cross-chain routing logic will be migrated to Aero's unified rules in phases.
At the token level, Dromos clearly announced the merger of AERO and VELO into a single AERO token, with no additional issuance, and the total supply fully mapped from the existing community. The distribution ratio is calculated based on the current TVL and income weights of the two protocols, with the data presented on-site showing approximately 94.5% for Aerodrome and about 5.5% for Velodrome. The new AERO will no longer be tied to a single-chain protocol but will correspond to the future output and cash flow of the entire Aero. The ve model will be retained, allowing users to lock the new AERO as veAERO, participate in voting and incentive distribution, and share in protocol income. The live broadcast described this as a "single economic system merge," emphasizing the unity of mechanisms and economic structures.
In terms of deployment rhythm, Dromos divided the work into several phases. The short-term task is to gradually enable the Aero brand and the core capabilities of MetaDEX 03 on Base and Optimism, ensuring a smooth transition for existing users and project parties. In the second quarter of 2026, Aero will be deployed to the Ethereum mainnet, placing core trading pairs and institution-sensitive assets in the mainnet pools. At the same time, the deployment of the Arc network will commence, enabling verified pools with address certification, whitelisting, and other rules. Aero will call upon the identity and compliance modules provided by Arc as needed to support institutional scenarios while maintaining its open characteristics on other chains.
In the latter half of the launch event, several protocols that have integrated MetaDEX 02 took the stage, including lending protocols, derivatives protocols, and cross-chain infrastructure. These teams believe that Aero is crucial for establishing unified and predictable underlying liquidity for them. MetaDEX provides external protocols with stable routing and depth, making liquidation, closing, or cross-chain execution more controllable; the unified incentive layer reduces the costs of duplicating pool creation and voting, allowing assets deployed across chains to maintain a consistent incentive structure. For these protocols, Aero centralizes governance, incentives, and routing into a cross-chain coordination layer, enabling them to obtain a more stable source of liquidity without changing their product structure, which is also why they choose to adapt in advance.
MetaDEX 03: Upgrading from AMM to "Liquidity Operating System"
In 2017, Bancor first implemented constant function market making, and in 2018, Uniswap became the default exchange layer for DeFi with its minimalist model and low integration costs. Sushi introduced liquidity mining, and Curve optimized curves for stablecoins and long-tail assets, but AMMs have always struggled to simultaneously meet the three parties' needs in terms of economic structure. Trading users require depth and stable execution, LPs need risk-controlled earnings, and protocols need sustainable positive net income. Most DEXs can only make trade-offs among these three.
MetaDEX 1 completed the definition of basic AMM and routing, allowing Velodrome to stably capture mainstream liquidity on Optimism. Building on this, MetaDEX 2 introduced the ve model, gauge weights, and bribe markets, combining LP incentives with project budgets through Aerodrome and Velodrome, forming a sustainable economic cycle in a single-chain environment. In this upgrade, Dromos positions MetaDEX 03 as a cross-chain reusable "liquidity OS," not just an AMM on a specific chain, but a unified market-making, routing, and incentive solution.
The economic structure of MetaDEX 03 consists of the AER engine and the REV engine. The former is responsible for incentive emissions, determining the emission amount for each cycle and distributing incentives to various pools based on ve votes; the latter is responsible for collecting and distributing protocol income, including fees, Slipstream MEV, and batch matching revenues. An "automatic stabilizer" within the protocol coordinates between the two, adjusting the emission pace based on the protocol's real income to keep the growth of token supply as aligned as possible with the growth of protocol income. Data from a week showcased during the live broadcast indicates that MetaDEX currently maintains a positive balance of over one million dollars after deducting LP incentives and bribes. According to simulations of the MetaDEX 03 model, this balance can be increased by approximately 2.8 times without raising inflation. The overall goal is to allow LPs to achieve comprehensive earnings higher than the fees they contribute while enabling the protocol to maintain positive net income across cycles.
The core technical upgrade comes from Slipstream V3. Currently, most MEV is captured by third-party auctions in the ordering layer, preventing DEXs and LPs from participating in revenue distribution. Slipstream V3 integrates an endogenous MEV auction and batch matching mechanism within the AMM, retaining some arbitrage and matching revenues within the protocol, which are then distributed according to rules to LPs, veAERO holders, and the protocol treasury, while striving to not increase or even reduce costs for users. Accompanying this is a more detailed dynamic fee structure that automatically lowers fees for pools with high depth and low volatility, while increasing fees for high-risk pools during extreme market conditions, covering risks with higher income. When combined with gauge caps and dynamic fee mechanisms, MetaDEX 03 significantly enhances its ability to adjust capital efficiency.
Surrounding trading paths and operational tools, MetaDEX 03 also integrates MetaSwaps, Autopilot, a solver market, and verified pools. MetaSwaps is a unified cross-chain swap interface for users. Users only need to select assets and target chains, and the backend will automatically split orders and route them between Base, Optimism, the Ethereum mainnet, and Arc, finding the path with the lowest overall cost. It does not recreate cross-chain bridges but collaborates with multi-chain messaging infrastructures like Hyperlane. Autopilot is aimed at LPs and project parties, supporting one-click establishment of complex positions, automatic reinvestment, automatic management of bribe budgets, and cross-chain incentive structures. The solver market is targeted at professional market makers and MEV participants, providing a unified interface and settlement rules for Aero, allowing these participants to connect their algorithms to participate in batch matching and MEV auctions, converting external computing power into internal protocol services.
The institutional aspect is handled by verified pools. Aero can enable pools with KYC and whitelisting rules in environments like Arc, and call upon compliance modules provided by Arc as needed, allowing institutions to participate in market making and trading while meeting regulatory requirements. MetaDEX 03 also reserves the capability for integration with external identity systems, such as Coinbase and World ID, to add an extra layer of security for large or sensitive funds and provide more advanced analytical tools.
In Dromos's vision, regulation is shifting towards stablecoins and tokenized assets. Through MetaDEX 03, Aero aims to provide a scalable unified core for both open liquidity and institutional liquidity without sacrificing the native openness of DeFi.
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