Aero CEO: Aiming for Leading Onchain Spot Exchange for Tokenized Stocks

Aero Aims to Dominate On-Chain Spot Trading with Tokenized Assets

Aero is positioning itself to become the premier on-chain spot exchange for tokenized stocks and other financial instruments, according to Alex Cutler, co-founder and CEO of Dromos Labs. This ambition comes as Aero officially launched across seven blockchain networks on Wednesday, unifying its predecessor platforms, Aerodrome and Velodrome, into a single decentralized exchange.

The Crucial Role of Liquidity

“Prices are anchored in spot markets, traders hedge against them, and they absorb liquidations,” Cutler explained to Crypto Briefing. He emphasized that without robust liquidity, other on-chain markets struggle to function effectively. Cutler cited Hyperliquid as an example of how derivatives trading can successfully consolidate around a single, deeply liquid venue. “Nobody has done that for spot yet, and that’s what Aero is building toward,” he stated.

These remarks build upon an earlier interview with The Rollup, where Cutler argued that the cryptocurrency market requires an on-chain equivalent to traditional giants like the New York Stock Exchange or Nasdaq, alongside derivatives venues comparable to the Chicago Mercantile Exchange.

Unlike traditional stock exchanges with fixed trading hours, tokenized stocks can be traded around the clock. This necessitates liquid spot markets capable of supporting price discovery even when underlying traditional exchanges are closed.

Rapid Growth and Incentive Models

Cutler highlighted that Aerodrome, Aero’s predecessor on the Base network, captured 55% of tokenized stock trading volume across Ethereum and its layer 2 networks, according to Blockworks data. This represents a significant leap from approximately 2% in early September. Cutler attributed this surge to an incentive model designed to attract liquidity providers and trading activity to newly launched assets.

Under this model, issuers offer incentives to encourage tokenholder allocations, thereby motivating liquidity providers to support their markets. Deeper liquidity, in turn, attracts further trading, generating fees that are distributed to staked AERO holders. These holders can then direct additional incentives toward active markets.

“Tokenized stocks have roughly quadrupled this year, and it’s still early,” Cutler noted, adding that new issuers require immediate liquidity from day one. He also pointed out that Aerodrome had already secured a leading position in Bitcoin dollar trading pairs and on-chain foreign exchange markets.

The company asserts that spot exchanges have generated more on-chain value over the past 12 months than derivatives, liquid staking, lending protocols, or blockchains.

Expansion and Unified Incentives

Aero’s expansion to seven networks—Ethereum, Base, OP Mainnet, Arbitrum, Arc, Ink, and Robinhood Chain—on Wednesday, October 21, consolidates Aerodrome and Velodrome under a single AERO token. Collectively, these networks handle approximately $120 billion in monthly decentralized exchange trading volume, according to the company’s launch materials.

During the third quarter, Aerodrome accounted for 58% of decentralized exchange volume on Base, while Velodrome represented 60% of trading on OP Mainnet. The new platform introduces a unified liquidity incentive system, enabling staked AERO holders to allocate rewards to markets they anticipate will generate trading fees.

All exchange revenue at launch will be distributed to staked AERO holders. The project has launched without venture funding or a token sale. Cutler explained that the incentive model is designed to attract liquidity providers from competing exchanges by offering rewards beyond standard trading fees. He suggested that competitors reducing liquidity provider earnings could make it easier for Aero to attract capital.

These developments align with a broader trend of decentralized exchanges exploring mechanisms to direct portions of trading fees toward tokenholders, such as Uniswap’s fee switch. Aero reports that Aerodrome and Velodrome have collectively distributed $578 million in revenue and incentives to tokenholders, including trading fees and liquidity rewards.

Cutler expressed the company’s goal to at least double its share of on-chain spot trading volume by the end of the year. “Exchanges are winner-take-most markets and we intend to take the most,” he concluded.