Aerodrome tops $1 billion in deposits, dominating DeFi on Base

Base, a Layer 2 Ethereum network incubated at Coinbase, saw its total value locked (or user deposits) surge to $2 billion — over five times the network’s deposits year-to-date.

Decentralized exchange Aerodrome accounts for almost half of Base’s TVL, contributing over $1 billion in deposits, up from $120 million in January. Its deposits make up more than 50% of the total TVL within the DeFi ecosystem on Base.

DeFiLlama data shows that Aerodrome is the largest decentralized exchange protocol on Base, not only in terms of total value locked but also in terms of volume and fees, surpassing DeFi giants such as Uniswap and Aave on the network.

Analyzing Aerodrome across all chains in terms of on-chain swap volume, The Block’s data dashboard shows it processed $9.02 billion last month — comparable to Solana DEXs like Orca and Raydium, which each recorded volumes in the $9-$10 billion range. However, Aerodrome’s volume remains lower than that of others, such as Uniswap (on Ethereum mainnet) and PancakeSwap (on BNB Chain).

The development team at Velodrome Finance (a decentralized exchange on OP Mainnet) first developed Aerodrome on Base as a forked version in September 2023, leveraging reward mechanics inspired by Curve Finance.

Since then, it has facilitated a large portion of on-chain swaps on the Base network. This approach is similar to its strategy on OP Mainnet with Velodrome, which involves using a set of decentralized finance incentives and vote-escrowed governance.

This system incentivizes users to stake the AERO -0.27% governance token for veAERO, another token that gives holders the right to receive a share of the protocol fees proportional to their votes.