Aerodrome Finance and Velodrome Finance, two of the most widely used liquidity hubs in decentralized finance, are merging into a single platform called Aero. Aerodrome has operated as the leading decentralized exchange on Base, the Coinbase-developed Layer-2, while Velodrome holds the same position on Optimism, meaning the merger unites the dominant liquidity venues of two major Ethereum scaling networks. According to the announcement, the combined protocol will expand its addressable market from $7 billion to more than $63 billion in total value locked, and will serve chains that together handle $135 billion in monthly trading volume.

What the Merger Involves

The consolidation was announced in mid-November 2025, with the integration scheduled to go live in October 2026. The end product is designed to be simple on the surface: users get one token and one interface instead of two of each.

Under the hood, Aero combines the ve(3,3)-style tokenomics that both Aerodrome and Velodrome currently run. Both protocols emerged from the Solidly design, the vote-escrow exchange launched on Fantom in early 2022. Under that model, holders lock up tokens for a period of time, receive voting power in return, and use that power to steer where new token rewards flow. Merging the two systems means a single set of voters will direct incentives across a much larger footprint.

The unified protocol is planned to operate across chains including Base, Optimism, and Ethereum mainnet.

What Happens to VELO Holders

The central question for VELO holders is the token swap. VELO is expected to convert into AERO at a defined ratio, with one proposed ratio set at 0.55:1 — under that proposal, each VELO token would become 0.55 AERO. The figure remains a draft rather than a signed term, so holders should treat the ratio as subject to change.

Why Fragmentation Is the Target

The stated goal of the merger is to reduce the inefficiencies created by fragmentation across Layer-2 ecosystems. Layer-2 networks are separate chains built on top of Ethereum to make transactions cheaper and faster, but each tends to develop its own pool of liquidity. Capital sitting on one chain does not automatically help a trader on another. Aerodrome and Velodrome were themselves products of that dynamic, each built to concentrate liquidity on a single network. Decentralized exchanges have more typically responded to new chains by launching standalone deployments, an approach that adds separate tokens and governance bodies with each launch rather than consolidating them.

Aero is positioning itself as a single liquidity layer for Ethereum-aligned chains, rather than a scattered collection of smaller pools.

What It Means for Traders and the DEX Landscape

For liquidity providers, the draw is scale. A protocol that can tap into chains carrying $135 billion in monthly trading volume offers far more fee-generating opportunities than one confined to a narrower footprint.

That assumption carries caveats. Serving chains with $135 billion in monthly trading volume is not the same as processing $135 billion in monthly trading volume; the figure describes the size of the pond, not the size of the catch. The same logic applies to the $63 billion number, which reflects the total value locked across the markets Aero intends to serve, not deposits Aero already holds.

For AERO and VELO holders, the practical items to watch are clear: whether the conversion ratio is finalized as proposed, how the merged ve(3,3) voting system is structured, and how quickly liquidity actually materializes on new chains once Aero goes live in October 2026.