Written by: Sanqing, Foresight News
On October 22 at 8:00, emissions for Aerodrome and Velodrome will stop simultaneously, and the merged Aero will launch at the same time, covering seven chains: Base, Ethereum Mainnet, OP Mainnet, Arc, Ink, Arbitrum, and Robinhood Chain.
On the conversion ratio, old AERO converts to new AERO at 1:1, and 1 VELO converts to 0.044 new AERO; among the new tokens, Aerodrome holders account for about 94.5%, and Velodrome holders account for about 5.5%. Self-custodied tokens must be manually upgraded through the official upgrade portal, and the operation is irreversible; tokens held on exchanges will be converted uniformly by the platforms.
This merger plan was announced at the New Horizon launch event in November 2025. It was originally planned to launch on Ethereum Mainnet and Arc in Q2 2026, after which the target was first adjusted to September, and then set for October due to an extended audit cycle. Over the course of a year, the plan itself has also undergone many changes.
Weekly voting is replaced by "prediction"
In the old mechanism of Aerodrome and Velodrome, ve holders voted once a week, deciding where the next week's token emissions would flow based on each pool's fee performance in the previous week.
At last year's launch event, the development team Dromos said it would retain the ve(3,3) model. This launch plan has changed to "staking": veAERO and veVELO convert to sAERO, with the remaining term preserved and rounded up to whole weeks, permanent locks converted to the maximum staking period, and unstaking is not allowed before expiry. Unlike before, sAERO no longer rebases and is transferable.
The weekly voting mechanism will be replaced by the newly launched Predictive Allocation, with rewards continuously flowing into each pool. sAERO holders no longer need to wait for a centralized weekly vote; they can adjust allocations multiple times within a week (in the initial launch period, each position must wait 47 hours between adjustments), and simultaneously earn income from the selected pools.
Token issuers can pay allocators through Liquidity Payments and Launch Payments. Because sAERO itself is deployed on Base, holders only need to initiate one transaction on Base to allocate rewards to pools on any of the seven chains, without needing to operate chain by chain.
Aero posted on X that allocators are not betting on whether the token will rise or fall, but on whether a certain market will generate trading. The incentive logic thus shifts from paying out based on last week's performance to betting in advance.
Emissions begin to follow revenue
An economic model article published by Aero on October 19 shows that in the four weeks of September 2026, revenue flowing to veAERO holders was $14.9 million (including $6.1 million in trading fees and $8.9 million in Liquidity and Launch Payments), while the value of AERO paid to LPs under the fixed emissions schedule during the same period was $10.5 million.
But the problem is that in the past, token emissions were released only according to a fixed schedule, with no direct relationship to protocol revenue.
Last year's launch event only mentioned that emissions would be adjusted according to protocol revenue; this time specific parameters were given. Gauge Caps tie each pool's reward cap to its projected revenue, with the long-term goal that the exchange-wide average reward is about 1.2 times projected revenue; AERO exceeding the cap will not be minted.
At the same time, rewards are minted only upon claim, and LPs who withdraw before completing the minimum staking period lose their rewards, which likewise will not be minted.
According to Aero's estimates, AERO's current annual issuance rate is about 11% of supply; based on the 1.2 times cap and current revenue, it is about 8%, with an annualized inflation cap of 20%. In addition, the Momentum Fund, integrated from the original buyback plan, has cumulatively repurchased or locked about 110 million AERO.
While making issuance depend on revenue, the revenue side has also been adjusted. Slipstream concentrated liquidity pools have launched dynamic fees, raising fees during market volatility and lowering them during calm periods.
Aero backtested 9 sets of data from three pools during calm and volatile periods in August and September 2026; under the premise of the same average fee rate, dynamic fees generated higher revenue than fixed fees in all cases. Another MEV tax will also be gradually introduced: transactions whose priority fees exceed the threshold for ordinary retail transactions must pay an additional fee, and this revenue is distributed to LPs or sAERO holders in the same way as trading fees.
Revenue is concentrated on Base; how can Aero break through?
According to Aero's Dune data page, as of mid-October 2026, the two protocols had cumulative revenue of about $580 million, of which Aerodrome, deployed only on Base, accounted for about $510 million, and Velodrome across multiple chains including OP Mainnet totaled about $69.8 million, with OP Mainnet alone accounting for $64.8 million.
But new sources of trading have emerged on Base. Tokenized stocks issued by Coinbase launched on Aerodrome on August 24, and Aero disclosed that its share of EVM tokenized stock trading volume rose from 2% on September 6 to 34% on October 4.
Although revenue is almost entirely concentrated on one chain, Aero is still trying to expand market share through the entry points of seven chains. Aero says the chains where the original two protocols are located account for about 17% of EVM spot trading volume, and after all seven chains are live, this proportion is expected to expand to about three times.
To compete for liquidity on new chains, Aero has set the platform take rate for unstaked LPs at 0% on Ethereum Mainnet, Arbitrum, and Robinhood Chain, and 5% on the other four chains. The cross-chain swap feature Metaswaps has also launched simultaneously, allowing users to complete swaps between supported chains within a single app.
Beyond expansion to new chains, the previously supported chains have not completely stopped. Velodrome's pools on Celo, Fraxtal, Soneium, and Unichain remain tradable, but no longer have AERO incentives, while deposits on Lisk must be withdrawn before October 31.
According to Aero's arrangements, the first round of Predictive Allocation will take place at 0:00 on October 23, and sAERO staked before then will begin earning returns from this round.