AERO and sAERO

AERO is Aero's native token. sAERO is the token created when AERO is staked. sAERO carries the right to direct AERO rewards and earn Exchange Revenue in return.

sAERO holders earn 100% of the Exchange Revenue. This ensures participants steering the protocol benefit directly from their contribution. The system is open: anyone can acquire AERO, stake as sAERO, and participate.

AERO moves value through the system in three ways

Attracting liquidity for the most productive pools
Connecting activity across networks
Earning 100% of Exchange Revenue when sAERO is allocated to direct emissions

The revenue shared this way expands beyond trading fees to include MEV capture, Liquidity Payments, Launch Payments and other protocol income. Revenue flows to sAERO holders continuously as it accrues, creating faster feedback and more responsive capital redeployment than fixed-schedule distributions.

Incentive alignment

Aero generates value through fees, which flow to Token Operators (sAERO holders) and Liquidity Providers who act in the protocol's interest. sAERO directs where that value flows, and AERO is the vehicle of distribution.

Other token models distribute passive yields. sAERO ties earnings to active participation: directing AERO Rewards to optimize liquidity flow. Token Operators use Predictive Allocation to determine where liquidity is needed, and direct new emissions toward those pools.

This creates powerful alignment: Token Operators earn protocol revenue as they direct rewards, attracting deeper liquidity across the protocol. The participants receiving the most value are the same participants steering the protocol's growth. This ensures continuous engagement and rewards holders for accurately predicting where trading volume will flow next.

AERO (liquid)

AERO is the unified token used across all networks where Aero operates. New AERO enters circulation through emissions, the protocol's continuous reward distribution to liquidity pools. Staking is the action that turns a liquid AERO balance into an sAERO stake.

sAERO (staked)

sAERO is the stake a holder receives when they stake AERO. It represents the right to allocate AERO Rewards to liquidity pools and to earn a share of the Exchange Revenue generated by those pools.

Allocation Power: When a user stakes AERO, the protocol records both the amount staked and the staking period. Together, these determine the Allocation Power (staking weight). Longer staking periods earn more weight. A six-month stake carries less weight than a four-year stake, and Perpetual Stakes carry the maximum weight possible for each token amount. An sAERO Stake's weight declines over time as its term runs down, unless the holder stakes permanently.

Decay rate = Amount Staked / 4 years
Weight = Decay rate x Time Remaining

The decay rate is per unit time, for a fixed amount of staked AERO, and is recalculated if the staked amount changes.

A decaying stake has no early exit: the staked AERO becomes available to withdraw only once its Staking Period fully expires. An existing Staking Period can be extended, but never shortened. At expiry, Staking Weight drops to zero and the stake stops earning Exchange Revenue; the sAERO stake itself doesn't disappear automatically, though. The holder withdraws the underlying AERO to return it to a liquid balance. A Perpetual Stake never expires on its own. Converting it back to a decaying stake sets the clock to the full four-year maximum.

Using sAERO: allocation

By directing their Allocation Power toward specific liquidity pools, Token Operators signal where they believe trading volume will flow next. This is called Predictive Allocation. In exchange they earn a pro rata share of the Exchange Revenue accrued to the pools they allocate to. Allocation occurs continuously, on a short cooldown per Stake, allowing Token Allocators to adjust their predictions based on real-time market conditions. Token Operators who want an automated approach may place their sAERO into Autopilot which allocates, claims, and compounds or converts on their behalf.

Advanced: issuance

Aero is designed to mint new AERO tokens only when users claim emissions, preventing unclaimed rewards from inflating the circulating supply. This creates cleaner token economics without artificial dilution.

xAERO (receipt tokens)

Aero runs on several networks, but AERO itself only exists on Base. On every other network, AERO rewards are paid in xAERO, a standard ERC-20 receipt token that stands in for AERO on that network.

AERO rewards are claimable on all networks. Liquidity providers may choose to claim AERO rewards on Base, or on the network where they are providing liquidity. Base is the network for the AERO token, xAERO is claimable on all other networks. Liquidity pools for AERO may not exist on every network, but all xAERO can be bridged back to Base for more efficient trading.

xAERO will be identified as AERO on every network in wallets and contract addresses.
Each xAERO can always be redeemed for exactly one AERO on Base.
xAERO tokens are minted on a network only when an LP claims AERO rewards there.
xAERO is a regular token. It can be held, traded or staked like AERO.
xAERO is not a crosschain token. It can always be bridged back to Base, but cannot be bridged to another network.

To swap the xAERO receipt token for AERO on Base, select the xAERO in the Trade interface and choose AERO on Base as the corresponding trade token. When traded, the xAERO is burned and the same amount of AERO is minted on Base.

On Aero, each token only ever exists in one place: as xAERO on a network other than Base, or as AERO on Base. This prevents the need for bridged tokens to be held in a vault, putting two claims on the same token.