Surge of Value on Base Network

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

Dominance of Aerodrome

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

Leading the Market

According to DeFiLlama, Aerodrome is the largest decentralized exchange protocol on Base, leading in total value locked, volume, and fees, surpassing major DeFi players such as Uniswap and Aave.

Trading Volume Analysis

Analysis from The Block shows that Aerodrome processed $9.02 billion in on-chain swap volume last month. This volume is comparable to Solana DEXs like Orca and Raydium, which had volumes in the $9-$10 billion range. However, Aerodrome’s volume is still lower than platforms like Uniswap (Ethereum mainnet) and PancakeSwap (BNB Chain).

Origin and Governance

The development team from Velodrome Finance, a decentralized exchange on OP Mainnet, launched Aerodrome on Base as a forked version in September 2023. It has become a major player facilitating on-chain swaps on the Base network, similar to Velodrome’s strategy on OP Mainnet, which includes leveraging decentralized finance incentives and vote-escrowed governance.

This governance model encourages users to stake the AERO governance token to receive veAERO, a token that entitles holders to a share of protocol fees proportional to their votes.

Forked Innovations

Velodrome and Aerodrome are both forks of Solidly, utilizing Andre Cronje’s ve (3,3) design.