In this article, I will discuss What Blockchain Aerodrome uses and how it enhances its functionality.
The significance of blockchain technology is rising, especially regarding security, transparency, efficiency, and Aerodrome.
Knowing which blockchain is used will help understand the processes in executing the operations in Aerodrome and how user and partner experience in the company is elevated.
What is Aerodrome Finance?
Aerodrome Finance (AERO) is the next-generation Automated Market Maker (AMM), specially built as the central liquidity aggregator on the Base network.
A highly efficient liquidity incentive framework juxtaposed with a locking concept and a streamlined architecture inherited from Velodrome V2. In short, it’s AERODROME + AERODROME.
The nodal point is that AERODROME works on a two-token ecosystem, AERO (ERC-20) for liquidity providers and veAERO (ERC-721), for governing the protocol.
What Blockchain Does Aerodrome Use?
Aerodrome uses Base, which is a layer two by coinbase. Being a decentralized exchange (DEX), Aerodrome aims to become the main liquid centre of the Base ecosystem by implementing the AMM model to swap tokens without a centralized order book.
In contrast to Velodrome Finance, which Aerodrome imitates, Aerodrome effectively utilizes the basic functionality of the network to stimulate liquidity and participation.
Why Blockchain is Essential for Aerodrome
Aerodrome understands the criticality of incorporating blockchain technology in the following ways:
Decentralization
This also means that since Aerodrome is in a blockchain, there is no need for an overseer, which allows for secure transactions that cannot be interfered with or concealed.
Security
Users’ information and money are protected from hacking or fraud due to the advanced form of blockchain technology wherein encryption comes into play.
Transparency
The public aspect of the blockchain network ensures all its users can unquestioningly trust it as they can confirm each transaction that has taken place.
Efficiency
Unlike other banking systems for managing commerce, creating payments to providers, and shifting payments across the globe through a financial system that usually lasts several days, blockchain transactions are as instantaneous as they are cheaper.
Incentives
Smart contracts enable Aerodrome to structure and govern resources in a manner that entices other liquidity providers and traders, assisting the platform’s dynamism.
Which Blockchain Does Aerodrome Use?
Aerodrome uses Base, one of the layers of Coinbase’s Layer-2 technology.
This decentralized exchange (DEX) aspires to be the primary liquidity source in the Base ecosystem. It uses the automated market maker (AMM) structure without being bound to a centralized order book system for swap.
Aerodrome’s architecture and functionalities are built upon Velodrome Finance, particularly its innovation libe, allowing efficient liquidity on the Base network and stimulating its usage.
How Aerodrome’s Blockchain Integration Impacts Users
The incorporation of Aerodrome with the Base blockchain offers remarkable value to its users in the following ways:
High Efficiency of Token Exchange:
Thanks to Aerodrome, users can easily exchange tokens at low rates and earn rewards. This integration proved very liquid; over $ 150 million was deposited within the first day.
Distributed Revenues
More AERO tokens users will earn provide liquidity, swapping, and acting in governance. Leaving those tokens will allow you to earn veAERO, which offers more voting power and, in due time, more rewards12.
Voting Privileges
Platform users can hold veAERO tokens and vote on and influence recommendations on which projects and tokens will receive support and rewards through the platform.
This essentially offers an avenue for a community-based and participatory architecture of the platform’s development.
Oligopolistic Tendency
All the advisor mechanics are implemented on the chain to ensure this component is decentralised and liquid. This means there will be a liquidity reserve even during low trade volume.
Non-fungible Tokens Support
Entitled veAERO tokens are locked, i.e. staked, and representations of these tokens, such as NFTs, can be sold on marketplaces. This gives the users more options and ways to participate in the ecosystem.
Comparing Aerodrome’s Blockchain with Other Industry Solutions
| Feature/Aspect | Aerodrome (Base) | Uniswap (Ethereum) | PancakeSwap (Binance Smart Chain) | SushiSwap (Multiple Chains) |
|---|---|---|---|---|
| Blockchain | Base | Ethereum | Binance Smart Chain | Ethereum, BSC, Polygon, etc. |
| Liquidity Hub | Yes | Yes | Yes | Yes |
| Native Token | AERO | UNI | CAKE | SUSHI |
| Governance | veAERO (NFT-based) | UNI token holders | CAKE token holders | SUSHI token holders |
| Reward System | AERO and veAERO rewards | UNI rewards | CAKE rewards | SUSHI rewards |
| Decentralization | High | High | High | High |
| NFT Integration | Yes (veAERO as NFTs) | No | No | No |
| Total Value Locked (TVL) | $644.5 million | $3.5 billion | $2.5 billion | $1.2 billion |
| Daily Active Users | Low | High | High | Medium |
Conclusion
To sum up, the Aerodrome platform incorporates the Base blockchain to enhance its further features.
Thanks to this combination, users are provided with a reliable and distributed system for exchanging tokens and providing liquidity.
The Base blockchain also caters to the rest of Aerodrome’s intriguing aspects, which involve NFT governance and some form of rewards, making it a strong competitor in the DeFi space.
