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Castle Labs šŸ°
@castle_labs
Digital Asset Research & Advisory
Joined August 2022
1.1K Following    16.1K Followers
Aerodrome and Velodrome merged to form Aero. With this merge, the product is now live across 7 chains, including Ethereum, Arbitrum, and Robinhood Chain, increasing its addressable market by 3-4x. To better understand this upgrade, we interviewed @wagmiAlexander, CEO of @DromosLabs, and core contributor Aero. Aerodrome leads in bitcoin-dollar pairs and onchain FX, and is becoming a core venue for tokenised stocks too. Hence, "the intention for Aero is to continue growing across all these different assets, leveraging greater liquidity and larger market sizes to build on this success." Aerodrome's share of tokenised-stock trading rose from around 2% in early September to ~55% by October across Ethereum and its L2s, while running only on Base. How does Aero plan to build on this? "New issuers will need liquidity from day one. Our model is built around a flywheel. An issuer pays incentives to attract stakers’ allocations to its market. That draws in liquidity, deeper liquidity brings in trading, and the fees captured as revenue from that trading go back to staked AERO holders, who then have a reason to keep backing the markets that perform." Expanding to new chains means bootstrapping liquidity from scratch. On Aero, Metaswaps handle this: "a trade on one network can be filled by Aero liquidity on another, so new pools strengthen the whole network, and new deployments can draw on liquidity we already have instead of starting from nothing." The design also keeps the growth of AI agents in mind: "We designed Aero expecting AI agents to become a meaningful part of its user base. Predictive Allocation gives them a natural role: read market data, allocate toward the markets they expect to generate revenue, and earn a share of that revenue in real time." Additionally, the sources of revenue expand with "trading fees across seven networks, liquidity payments from issuers, expanded dynamic fees, and MEV capture on supported L2 networks through Slipstream V3." sAERO holders receive the pool revenue, and "at today's reward targets and staking levels, the revenue it earns exceeds the dilution it absorbs."
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Aero is here. Get on board.