Aerodrome and Velodrome will merge into a single decentralized exchange protocol, Aero, on Oct. 22, ending emissions from the two existing systems at 08:00 and replacing their weekly governance model with a faster allocation mechanism across seven networks.
Aero will launch on Base, Ethereum mainnet, OP Mainnet, Arc, Ink, Arbitrum and Robinhood Chain. The deployment follows two postponements since the merger was first outlined at the New Horizon event in November 2025, with the project citing a longer audit period as the reason for shifting the final launch from September to October.
The most consequential change for existing users is the replacement of weekly ve-token voting with “Predictive Allocation,” a system that lets staked token holders redirect liquidity incentives more often. Instead of casting a vote once a week based largely on pools’ previous fee generation, holders will be able to revise allocations several times during a week, subject to a 47-hour cooldown between adjustments in the initial rollout.
That change gives holders more flexibility to follow fee generation across Aero’s seven supported chains, while placing greater emphasis on active allocation decisions. Revenue from selected pools will flow to holders of the protocol’s new staking token, sAERO.
Token conversion begins with the Aero launch
The merger will consolidate AERO and VELO into one AERO token. Existing AERO will convert to the new AERO at a 1:1 rate, while each VELO will convert to 0.044 new AERO. Under that arrangement, former Aerodrome holders will represent about 94.5% of the new supply and former Velodrome holders about 5.5%.
People holding tokens in self-custody must use Aero’s official upgrade portal to complete the conversion. The transaction cannot be reversed once submitted. Centralized platforms holding AERO or VELO for customers are expected to conduct the conversion themselves.
The transition also changes the structure of locked governance positions. veAERO and veVELO will convert into transferable sAERO, with any remaining lock duration maintained and rounded up to the next full week. Permanent locks will move into the longest available sAERO staking term.
Unlike some prior vote-escrow designs, sAERO will not rebase. Holders will retain their stake until the underlying position reaches maturity, though the sAERO token itself can be transferred.
Aero has scheduled the first Predictive Allocation round for 00:00 on Oct. 23. sAERO positions staked before that point will begin earning returns in the first round.
A revenue-linked emissions model replaces open-ended incentives
Aero’s token model will connect emissions to protocol revenue through a mechanism called Gauge Caps. The protocol’s stated long-term objective is to keep average rewards across the exchange near 1.2 times expected revenue. AERO emissions above that level will not be minted.
The approach differs from systems that issue rewards on a fixed schedule regardless of trading activity. Under Aero’s structure, rewards are minted only when claimed. Liquidity providers leaving before a pool’s minimum staking period will forfeit their rewards, and those forfeited tokens will also remain unminted.
Aero estimates its current annual issuance rate at roughly 11% of supply. Using current revenue and the 1.2-times cap, it calculates issuance would be about 8%, although the protocol retains a maximum annual inflation ceiling of 20%.
The model places the exchange’s token incentives more directly alongside its ability to generate trading fees. That linkage could reduce token issuance during periods when liquidity rewards exceed the revenue pools are producing, while retaining room to increase incentives if on-chain activity grows.
Aero also said its consolidated Momentum Fund has bought back or locked about 110 million AERO to date through its repurchase-and-lock program.
Dynamic fees and MEV charge target liquidity-provider returns
The merged protocol will carry forward Slipstream concentrated-liquidity pools, which use dynamic trading fees. Fees rise during more volatile market periods and decline in calmer conditions, a design intended to compensate liquidity providers when price movements create a higher risk of impermanent loss.
Aero said it tested nine data sets across three pools from August through September 2026. In comparisons between calm and volatile windows, the protocol reported that dynamic fees generated more revenue than fixed fees when the average fee rate was held constant.
It also plans to introduce an MEV tax for transactions that use priority fees above a retail threshold. Maximal extractable value, or MEV, refers to the advantage gained by controlling or influencing transaction ordering. Under Aero’s proposal, the extra charge would be distributed in the same way as trading fees, to liquidity providers or sAERO holders.
Token issuers seeking liquidity will have additional ways to pay allocators. The new Liquidity Payments and Launch Payments features would allow projects to compensate sAERO holders for directing emissions toward selected pools.
Since sAERO is deployed on Base, its holders can route allocations to pools on all seven supported chains through a single transaction on Base. That setup avoids requiring users to bridge governance tokens or maintain voting positions separately on each network.
Base remains the dominant revenue source
Aero’s dashboard reports that Aerodrome and Velodrome had generated about $580 million in cumulative revenue by mid-October. Aerodrome, which operated on Base, accounted for about $510 million of that total. Velodrome generated roughly $69.8 million across several networks, including $64.8 million on OP Mainnet.
Base has also become a source of tokenized-stock trading volume for Aerodrome. Coinbase-issued tokenized stocks began trading on the exchange on Aug. 24, according to Aero. The protocol said its share of EVM-based tokenized-stock volume climbed from 2% on Sept. 6 to 34% on Oct. 4.
Aero will launch Metaswaps alongside the merger, allowing users to execute swaps across the supported networks through one application. Combined with tokenized-stock pools on Base, the feature is designed to connect liquidity fragmented across chains without requiring users to navigate separate exchange interfaces for each network.
To draw liquidity to newer deployments, Aero will charge no platform take on unstaked liquidity-provider positions on Ethereum mainnet, Arbitrum and Robinhood Chain. The platform take will be 5% on Base, OP Mainnet, Arc and Ink.
Older deployments lose AERO incentives
The seven-chain launch also formalizes the end of incentives on several existing Velodrome deployments. Pools on Celo, Fraxtal, Soneium and Unichain will remain available for trading but will no longer receive AERO rewards.
Users with deposits on Lisk face a more immediate deadline: assets must be withdrawn by Oct. 31. The merger documentation says those deposits will not be part of Aero’s supported-network rollout.
The transition turns Aerodrome and Velodrome from separate exchange systems into one multichain protocol with a shared token, shared staking structure and common incentive market. Its first weeks will test whether frequent allocation changes can direct liquidity more efficiently than the weekly voting cycle that defined both predecessors.
Want to explore tokenized stocks and on-chain equities after Aero’s upgrade? Learn more in this detailed guide.
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