Base Network’s DeFi Growth: Aerodrome Outperforms Major Competitors
Base Network, a Layer 2 Ethereum network developed by Coinbase, has experienced a remarkable increase in total value locked (TVL), reaching $2 billion. This marks a significant growth, with deposits soaring over five times compared to earlier this year.
Aerodrome Dominates Base’s DeFi Landscape
Decentralized exchange Aerodrome has been a key driver behind this surge, accounting for nearly half of Base’s TVL with over $1 billion in deposits. This is a dramatic increase from just $120 million in January, highlighting Aerodrome’s rapid rise in the DeFi ecosystem on Base Network. Currently, Aerodrome not only leads in total value locked but also outperforms major players like Uniswap and Aave in terms of trading volume and fees on the network.
Impressive On-Chain Swap Volumes
Recent data from The Block reveals that Aerodrome processed approximately $9.02 billion in on-chain swap volume last month. This figure puts it on par with Solana DEXs like Orca and Raydium, which recorded similar volumes in the $9-$10 billion range. However, Aerodrome’s volume still trails behind established platforms like Uniswap on the Ethereum mainnet and PancakeSwap on the BNB Chain. Launched as a fork of Velodrome Finance in September 2023, Aerodrome has quickly become a pivotal component of the Base network.
Innovative Incentive Structures Drive User Engagement
Aerodrome employs a unique set of decentralized finance incentives, including vote-escrowed governance to engage users. By staking the AERO governance token, users can obtain veAERO, which allows them to earn a share of the protocol fees proportional to their voting power. This innovative approach mirrors the strategy used by Velodrome on the Optimism Mainnet, leveraging the ve (3,3) design created by Andre Cronje.
With its impressive growth and strategic incentives, Base and Aerodrome are carving out a significant place in the decentralized finance landscape.
FAQs
What is the significance of Base reaching $2 billion in total value locked (TVL)?
Base reaching $2 billion in total value locked is significant as it indicates strong user confidence and activity within the network. This surge reflects the growing adoption of decentralized finance (DeFi) applications on Base, showcasing its potential as a competitive Layer 2 solution on Ethereum.
How does Aerodrome compare to other decentralized exchanges?
Aerodrome stands out as the largest decentralized exchange on Base, accounting for over $1 billion in deposits. It surpasses major competitors like Uniswap and Aave in terms of volume and fees on the Base network. However, while it has achieved impressive swap volumes, it still trails behind leading DEXs on other networks, such as Uniswap on Ethereum and PancakeSwap on BNB Chain.
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