Tokens & rewards
A short guide to how AERO, sAERO, fees, and emissions fit together, and what each participant earns.
What is the difference between AERO and sAERO?
AERO is the protocol's liquid native token, the asset traded, held, or received as AERO Rewards. sAERO is staked AERO that carries staking weight, earns Exchange Revenue, and is committed for the length of the stake. AERO holders can remain liquid; staking AERO into sAERO makes the staker a Token Operator, who allocates AERO Rewards across pools and earns Exchange Revenue. See AERO and sAERO.
Where do swap fees go?
It depends on the deposit. On an AERO-earning liquidity deposit, 100% of that specific deposit's swap fees route to the Token Operators who are actively allocating to the pool, and the LP earns AERO Rewards. A Fee-earning liquidity deposit keeps most (or all depending on the pool) of the fees it generates with a portion routed to Token Operators.
How are emissions and rewards decided? (Predictive Allocation)
AERO Rewards flow to pools continuously, determined by Token Operators directing emissions through Predictive Allocation. Pools with more allocated weight receive greater AERO Rewards. There is no weekly vote: allocation runs continuously and updates as Token Operators adjust. See Predictive Allocation.
Where do AERO Rewards come from?
AERO Rewards are newly emitted AERO, released by the protocol. The emission rate is not flat: the AER Engine calibrates emissions to real activity, trimming rewards to pools that stop producing fees and holding each pool under a dynamically updated cap. Rewards concentrate where trading actually happens. See Predictive Allocation.
How to start earning rewards?
How to earn as an LP
Liquidity provided in a pool and set to AERO-earning receives a stream of AERO Rewards directed to the pool by Token Operators. A pool qualifies to receive AERO Rewards once its gauge has been activated (which requires that both tokens are listed); the deposit screen shows the expected APR. Fee-earning deposits keep a portion of trading fees instead. See Liquidity Management.
How to earn as a Token Operator
To earn Exchange Revenue, AERO is staked into sAERO and Allocation Power is allocated to pools expected to be productive.
Exchange Revenue is generated per-pool from that pool's trading activity: trading fees, MEV capture, Liquidity Payments, and Launch Payments. It flows only to Token Operators actively allocating Allocation Power to that pool, distributed continuously in proportion to each operator's allocation.
For example: if a pool generates $100 in fees and two operators have allocated equally to it, each receives $50. If one operator increases their allocation while the other decreases, the revenue split shifts accordingly; only active allocators at the time the revenue is generated receive it.
Revenue earned this way flows directly to Token Operators. Longer staking periods and higher allocations to productive pools increase earnings. See Staking and allocating.
How long is AERO staked, and how can it be withdrawn?
A staking period is set when AERO is staked, from 6 months to 4 years. A longer period gives more Allocation Power, the weight behind every allocation, and that power decays steadily as the period winds down. A token operator can instead set the stake to Perpetual Stake, which holds Allocation Power at maximum with no decay until the mode is turned off. When a time-based stake reaches the end of its period, its Allocation Power drops to zero and the underlying AERO becomes withdrawable. The AERO can be withdrawn when the stake duration has fully elapsed.
Is there a cooldown on allocation?
Yes. After an sAERO stake is allocated, there is a 47-hour wait before that stake's allocation can be changed again. The cooldown is per stake, so if multiple stakes are held, each can be adjusted on its own schedule. See Predictive Allocation.