How Aerodrome Plans to Fix DeFi’s Broken Tokenomics

When Alex Cutler says the token is “the biggest revolution that we’ve seen around coordination since the invention of the firm,” he’s not exaggerating. He’s talking about reinventing the very incentive structure that governs crypto — and, in his words, fixing how DeFi “made the excesses of traditional firms even worse.”

As the co-founder of Aerodrome, Cutler has helped build one of the fastest-growing decentralized exchanges on Base, Coinbase’s layer-2 network. It’s part of a broader movement reshaping DeFi’s architecture — one that challenges the old Uniswap-era orthodoxy and brings new economic design to crypto’s foundational layer.

“Aerodrome is at its essence a metaDEX,” Cutler explained. “It’s the technological and economic operating system of liquidity networks.” That means it’s not just another trading venue, but the layer that makes the entire on-chain economy function — “the foundation of the base economy.”

The difference, he argues, comes down to how value is shared. “You need a token at the center of it that is maximally useful,” he said. “[One that] captures and redistributes value to align the different stakeholders in the system, which are traders, liquidity providers, and token operators.” The model ensures everyone benefits: “Traders get the best execution… liquidity providers get the best reward… and token operators get rewarded maximally with 100% of the protocol’s current and future revenue.”

In Cutler’s view, that’s a radical break from the past. “What came before… the token was a fundamentally separate thing. It’s not connected to the core economics of the protocol.” Instead of being used to fund insiders or subsidize early costs, Aerodrome’s tokenomics tie value creation directly to community participation.

That commitment to fairness isn’t just philosophical. “Shared systems should create shared value,” he said. “Ethereum being neutral, the ownership aspect of onchain economies… these are essential to its competitiveness against traditional systems.”

So instead of raising venture rounds or handing out team tokens, Aerodrome took the opposite approach. “You don’t need to go out and raise money,” Cutler said. “You don’t even need to give tokens to your own team that, you know, one day, six months later… they can go sell out on the market, buy some mansions, and forget about this protocol they built in the first place.”

That structure has helped Aerodrome dominate Base. According to Cutler, “Airdrome is doing like 60% of all the volume on the chain,” a staggering share that outpaces Uniswap and other established players. “It’s far more powerful than what you can get on Uniswap… it’s totally changed the DEX landscape.”

And the next step may be even bigger. Aerodrome recently launched Aero Ignition, a new on-chain launch model that lets projects bootstrap liquidity without giving away 10% of their supply to centralized market makers. “It’s ten-times more efficient than the traditional launch model,” Cutler said. “You get deep liquidity day one… and you get trading on Coinbase day one.”

That synergy with Coinbase’s Base ecosystem — where anyone deploying can reach “100 million customers on Coinbase” — could be what finally brings DeFi mainstream. As Cutler put it: “We’re building a product that has never been seen before. That’s better for builders, better for DeFi users, better for centralized exchange users. Everybody wins.”

Aerodrome plans to unveil more at an event at Lincoln Center in New York next month.

“Let’s return DeFi to its core principles,” Cutler said. “Let’s show that a little scrappy team who didn’t raise any money can disrupt the biggest, most well-funded incumbents and reset the whole industry in doing so.”

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