AERO (AERO)

Aerodrome is changing how it pays for liquidity. Emissions are paid in AERO while fees come in as dollars, so when AERO rises, the protocol gets less profitable if fees don't outpace the price. Every week it mints new tokens that are paid to liquidity providers, which is a real cost to the business. Aerodrome aims to fix this with the AER Engine, which pegs emissions to revenue instead of the token price and caps inflation within a set band. Spend follows what the protocol earns rather than what the token does, so a rising AERO price no longer mechanically pushes earnings down. It also changes the shape of the cost line. A fixed weekly mint held spending flat regardless of what the protocol brought in. Linking emissions to fees replaces that with a cost that scales with the business.

Read the full report here. https://t.co/wLExJ4X4Xi

Aerodrome is frequently criticized for emitting more than it earns. But much of this supply is locked away and doesn’t reach the market. Aerodrome pays for its liquidity in newly minted AERO, which used to be a fixed weekly amount. The AER Engine changes that by tying emissions to the fees each pool generates. Under this, spending moves with revenue rather than staying flat regardless of what the protocol earns. It also matters where those emissions land. Nearly a quarter of total supply is permanently locked by the protocol, including the team, Flight School, and its aligned funds. Emissions that are re-locked into these positions don't reach the market. However, the lock rate rises and falls as outside holders decide whether to stay locked when their positions expire. The protocol-controlled locked share never moves and sets a real floor. Everything above that floor is an assumption.