Aerodrome developers announce a brand new protocol Aero, aiming to challenge the Uniswap DEX throne?

On November 12, 2025, the Aerodrome development team Dromos Labs announced the launch of a new decentralized exchange protocol Aero and its accompanying token on the Ethereum Mainnet in the second quarter of 2026. This strategic move marks the first entry of the largest DEX on the Base on-chain into the Ethereum Mainnet, directly challenging Uniswap, which has long dominated this ecosystem.

The new protocol will integrate cross-chain exchange functionality, optimize liquidity incentive models, and introduce compliance tools required by traditional financial institutions. Dromos Labs CEO Alexander Cutler views Uniswap's recent fee allocation proposal as a significant strategic misstep that presents a competitive opportunity.

Aero Protocol Architecture and Technical Innovation

The core innovation of the Aero protocol lies in its integrated cross-chain exchange architecture. Traditional cross-chain transactions require users to complete cross-chain bridging and target chain exchange operations across multiple interfaces, whereas the built-in cross-chain bridge technology in Aero allows users to complete asset exchanges between different blockchains with a single click. This seamless experience significantly improves the user operation process and reduces trading friction by aggregating previously fragmented market liquidity.

Key Technical Features of Aero Protocol

Cross-Chain Engine: Built-in cross-chain bridge supports direct exchange between multiple chains.

Incentive Model: MEV and other additional income included in liquidity rewards

Compliance Level: Supports KYC pools to meet institutional needs.

Token issuance: Layered launch platform adapts to different project parties

Buyback mechanism: The momentum fund automatically repurchases based on market conditions.

The innovation of the liquidity incentive mechanism is another highlight. Aero will create a more efficient capital return system by capturing additional income sources such as Maximal Extractable Value (MEV) and distributing it to token holders who vote in support of specific liquidity pools. Dromos Labs executive Luis Alberto emphasized, “Directing all value to liquidity providers through tokens is the winning strategy.” This design stands in stark contrast to Uniswap's recent proposal to shift part of the protocol revenue from liquidity providers to token holders.

Aero Market Competition Landscape and Ecological Positioning

Aero entering the Ethereum Mainnet will directly face Uniswap's dominance. As of October 2025, Uniswap handled over $123 billion in trading volume, while Aerodrome and its sister protocol Velodrome had a total trading volume of $26 billion during the same period. Although the scale gap is significant, the Dromos Labs team believes that Uniswap's fee distribution proposal will weaken its liquidity advantage, creating an opportunity window for challengers.

Aerodrome and Velodrome dominate in the Base and Optimism Ethereum Layer 2 networks, and this successful experience provides confidence for their expansion into the Mainnet. The Base chain, with its close integration with Coinbase and user-friendly onboarding experience, has become one of the fastest-growing Layer 2 networks, while Aerodrome, as the core liquidity hub of the ecosystem, has accumulated valuable protocol operational experience.

Aero Liquidity Migration and Governance Economics

Liquidity migration will be a key challenge for Aero. To attract existing Uniswap liquidity providers to switch to the new protocol, Aero needs to offer a significantly more attractive yield structure. The governance token economic model of the protocol design allows holders to earn protocol revenue sharing through staking and voting. This model, which directly links value accumulation with liquidity incentives, has been validated on Velodrome and Aerodrome.

The establishment of the Momentum Fund is another innovative attempt. By merging resources from the Aerodrome and Velodrome foundations, the fund will automatically execute token buybacks based on market conditions, providing support for the token price. This mechanism is similar to stock buyback programs of listed companies, but is still a frontier exploration in the field of Decentralization Finance.

Aero Organization Adopts Compliance Framework

The compatibility design of the Aero protocol with traditional financial institutions reflects the evolution trend of the market. Some liquidity pools will support background check functions to meet the compliance requirements for regulated entities to participate in DeFi. This layered approach preserves the original spirit of permissionless DeFi while opening the door for broader mainstream adoption.

The layered structure of the token issuance platform also reflects this concept. From completely permissionless platforms like Pump.fun to launch pads designed for highly regulated financial institutions, Aero aims to cover the entire spectrum of digital asset issuance needs. This inclusive strategy may help it find a differentiated position in the increasingly crowded DEX market.

Aero Technology Risks and Implementation Challenges

Despite its grand vision, Aero's success faces multiple challenges. The competitive intensity of the Ethereum Mainnet far exceeds that of layer two networks, and Uniswap's brand recognition and network effects create significant entry barriers. At the same time, the cross-chain bridge technology itself still poses security risks, with historical cross-chain bridge hacking incidents reminding users and developers of the potential costs associated with vulnerabilities.

Smart contract security is another key consideration. The complexity and novelty of new protocol code increase the difficulty of audits, and any undiscovered vulnerabilities could lead to catastrophic financial losses. Dromos Labs needs to invest significant resources in code audits and vulnerability reward programs to establish a security reputation comparable to its competitors.

Industry Impact and Future Outlook

The launch of Aero represents a new phase in the evolution of DEX. From single-chain exchanges to cross-chain liquidity aggregation, from purely permissionless to compliant with regulatory requirements, decentralized exchanges are undergoing a dual upgrade in functionality and usability. This evolution will ultimately bring DeFi closer to its original vision of serving global financial needs.

From a more macro perspective, the competitive boundary between DEX and Centralized Exchanges is becoming blurred. When decentralized protocols can provide user experiences comparable to centralized platforms while maintaining self-custody and non-custodial advantages, the entire digital asset trading ecosystem may face a restructuring. Whether Aero can become a catalyst for this transformation will depend on its technical execution and market acceptance.