Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Aerodrome developer Dromos Labs is set to launch a new protocol and token, Aero, on the Ethereum mainnet in the second quarter of 2026. This move marks the company’s first expansion to Ethereum, positioning it in direct competition with Uniswap, the long-standing dominant decentralized exchange (DEX) in the ecosystem.
The new Aero protocol aims to simplify the complex process of swapping tokens across different blockchains and enhance efficiency in attracting liquidity providers. By offering a more streamlined experience and better pricing for crypto traders, Dromos Labs seeks to challenge Uniswap’s market leadership.
Strategic Timing Amid Uniswap’s Overhaul
Dromos Labs’ announcement closely follows Uniswap’s proposed token overhaul, which includes a “fee switch” that would redirect a portion of protocol revenue from liquidity providers to tokenholders. Dromos Labs CEO Alexander Cutler publicly referred to this as a “mistake of this magnitude” for Uniswap.
Currently, Aerodrome is the largest DEX on Base, and its sister protocol, Velodrome, holds the top spot on Optimism. However, neither has operated on the Ethereum mainnet, where Uniswap processed over $123 billion in transactions in October, significantly outpacing Aerodrome and Velodrome’s combined $26 billion in the same period.
Competition with Uniswap
Dromos Labs executives view Uniswap’s fee switch proposal, despite its embrace by tokenholders, as a potential deterrent for liquidity providers. Luis Alberto, executive director of the Aerodrome and Velodrome Foundations, stated that Aero plans to win by “putting all the value into liquidity providers through the token.”
Uniswap’s leadership has proposed an upgrade, the Protocol Fee Discount Auction, to internalize Maximal Extractable Value (MEV) as a new source of protocol fees. Dromos Labs aims to differentiate by ensuring liquidity providers remain central to its value proposition.
Aero’s Technical Innovations
During a recent conference, Dromos Labs detailed Aero’s core upgrades. The protocol will feature a built-in “bridge” technology, enabling single-click cross-blockchain token trading, which typically involves multiple steps.
Aero also intends to boost incentives for traders and liquidity providers by capturing revenue from additional sources, such as MEV, and distributing it among Aero tokenholders who vote to reward specific trading pools. Furthermore, in a nod to institutional finance, some pools will incorporate background checks to meet regulatory requirements.
The new protocol will include a token launchpad with varying tiers, from a permissionless platform to one designed for regulated financial institutions. Additionally, the foundations supporting Aerodrome and Velodrome will merge initiatives into a “Momentum Fund” to facilitate Aero token buybacks based on market conditions.
Despite these innovations, Dromos Labs faces a significant challenge in unseating Uniswap, which benefits from years of incumbency and established brand trust. However, executives remain optimistic, believing that market-based competition driven by capital efficiency and optimal pricing will ultimately determine the dominant platform.
