Predictive Allocation
Predictive Allocation enables Token Operators to earn Exchange Revenue by directing their sAERO to pools expected to generate trading volume. As AERO Rewards stream continuously to those pools, Token Operators earn a pro rata share of the Exchange Revenue.
What it is
Token Operators direct rewards in real time as market conditions change, unlocking a new market where LPs are informed by real market signals from participants who anticipate liquidity needs.
How each user participates in Predictive Allocation:
| Token Operators | Allocation is a live deposit. AERO Rewards stream to the pools they back, Exchange Revenue accrues as fees are generated and can be claimed on demand. Earnings reward accurate predictions on where trading volume is expected to flow. |
| LPs | AERO Rewards follow predicted volume. Token Operators signal real market needs so liquidity is paid to be where trading is expected before it happens, not where it used to be. LPs can expect their AERO Rewards to closely track realized trading activity. |
| Traders | Rewards that anticipate volume pull liquidity toward the pools that need depth next, which keeps quotes competitive as markets move. This enables better execution on their trades. |
For token issuers and new pools, support can arrive at the moment it matters. Token Operators can allocate to a token at the exact moment rewards would do the most to bootstrap its liquidity.
By the time rewards arrive, market conditions have shifted and capital flows to pools that may no longer be productive. Predictive Allocation responds immediately to market conditions creating a tighter loop between signal and response.
How it works
Allocation Power is the measure of sAERO staking weight applied to a pool. The more Allocation Power directed to a pool, the higher that pool's AERO Rewards rate. A Token Operator's share of a pool's Exchange Revenue is calculated as their Allocation Power divided by the total Allocation Power allocated to that pool.
Token Operators direct rewards to pools continuously. Allocations apply immediately and persist until changed, subject to a 47-hour cooldown.
Token Operators earn 100% of the Exchange Revenue on Aero. Each individual Token Operator earns a pro rata share of the revenue generated by their Allocation.
Predictive Allocation strategy
Token Operators are active participants. They create a market signal through Predictive Allocation that draws productive liquidity where needed. All allocators have a role to play in directing the stability and potential of the Aero system.
When Allocation Power is directed to a pool, the Token Operator is predicting that pool will generate trading volume and therefore revenue back to their position. Predictions naturally have variance, especially over shorter windows.
Individual Token Operators can expect variable performance versus other participants since each Token Operator is creating their Allocation strategy independent of the market.
How to allocate
sAERO weight can be allocated across any pools on any network Aero is deployed on. Allocations apply immediately and persist until changed.
- Which pools to back. Allocation Power can be split across multiple pools to diversify allocation, or concentrated in a single pool for maximum influence.
- How much Allocation Power for each deposit. Each Token Operator decides their Allocation Power to each pool. Each pool's AERO Rewards are distributed proportionally to the total Allocation to it.
- Allocation cooldown. Allocations can change at any time, but adjustments on the same deposit are subject to a 47-hour minimum between changes. The cooldown prevents rapid reallocation that could cause instability. This cooldown period could be lowered over time.
- Cap status. Pools that have reached their cap will not generate additional AERO Rewards from new allocations until the cap rises. Gauge caps are updated dynamically. This creates an incentive to allocate to underutilized pools where rewards are not capped. Each pool's gauge cap status is visible in the Markets view.
- Claim cadence. Exchange Revenue and Liquidity Payments stream continuously and can be claimed on demand.
- Markets view. The Markets surface is where sAERO weight is allocated to pools manually. Allocations made there propagate cross-network automatically.
Key capabilities
| Capability | What it enables |
|---|---|
| Market signal from independent predictions | Token Operators predict where volume will flow. The aggregate of those predictions sets each pool's reward rate. |
| Continuous, on-demand allocation | Token Operators adjust allocations in real time (subject to a 47-hour cooldown), not on a fixed schedule. Rewards and revenue stream continuously as they accrue. |
| Revenue flowing to accurate allocators | Token Operators earn a share of Exchange Revenue from every pool they allocate to, rewarding predictions about volume flow. |
| Cross-network by default | A single sAERO stake can allocate to pools on any network Aero is deployed on. Rewards and revenue settle on the appropriate network automatically. |
| Automation Tools available | Token Operators who prefer a more hands-off approach can utilize Autopilot, which automates pool selection, allocation, claims, and compounding. |
Getting started
Allocating requires an sAERO stake. Open the Markets view in the Aero app to allocate Allocation Power to pools. The view shows available pools, each pool's gauge cap status, and allocations by other Token Operators. For a managed approach where allocation decisions are automated, see Autopilot for Token Operators.