Slipstream
Slipstream is Aero's concentrated-liquidity AMM. Concentrated liquidity allows liquidity providers to specify a price range where their capital operates, rather than spreading it across the entire price curve. By concentrating capital into a narrower band, liquidity providers can earn more per dollar deployed on the price ranges where trading actually occurs.
This page covers Slipstream's distinctive features: ranges, dynamic fees, and MEV capture.
How it works
A Slipstream pool divides the price curve into discrete levels called ticks. A deposit is defined by a lower and an upper tick and supplies liquidity to every tick between them. As trades move the price through ticks, the deposits whose range covers the current price are the ones filling those trades and accruing the pool's fees.
Within each tick range, Slipstream prices trades on the same constant-product curve as a Basic Pool: x * y = L^2, where L is the liquidity active in that range, computed on virtual reserves (the balances the range would hold if it spanned the whole curve). The more liquidity active at the current price, the less a given trade moves it, which is why a deep, well-placed range fills trades with less slippage than a larger thinly spread pool.
Concentrating liquidity into a narrow band makes Slipstream capital-efficient. The same capital backs deeper liquidity at the prices that actually trade, earning more per dollar than a full-range deposit would. The cost of that efficiency is range management: a deposit works only while price stays inside it.
Price ranges and capital efficiency
Slipstream's defining feature is the price range. A liquidity provider chooses a lower and upper price bound where their capital operates. Narrow ranges concentrate capital and earn more per dollar but can fall out of range sooner; wide ranges earn less but stay active longer. A full-range Slipstream deposit behaves like a Basic Pool, and for that case, a Basic Pool is usually the more direct choice.
Tick spacing sets range granularity: tighter for stable pairs, wider for volatile. When price leaves a range, the liquidity provider must widen, shift, or wait for it to return.
Tick spacing determines how finely a liquidity provider can set their price range. Tighter spacing (like CL1) allows narrower ranges, concentrating capital into tight price bands for higher capital efficiency. Wider spacing (like CL2000) forces broader ranges, which require less management but spread capital across more prices, earning less per dollar.
Aero offers five tick-spacing classes, each suited to different pair types and LP strategies:
| Class | Tick spacing | Width | Typical pairs |
|---|---|---|---|
| CL1 | 1 | 0.01% | Stable pairs (USDC, USDT) |
| CL50 | 50 | 0.5% | LST / underlying (wstETH-WETH) |
| CL100 | 100 | 1% | Blue-chip volatile (WETH, BTC) |
| CL200 | 200 | 2% | Wider-band alternative to CL100 |
| CL2000 | 2000 | 20% | Emerging / illiquid (New launches) |
Note that new pool spacing can be added in the future.
Full-range comparison
A full-range Slipstream deposit (spanning the entire price curve) behaves identically to a Basic Pool because it earns from every price and requires no management.
A pool's tick spacing sets the minimum width for any range: CL1 allows ranges as narrow as 0.01%, while CL2000 requires ranges of roughly 20%. The range picker snaps to these predefined intervals rather than allowing arbitrary prices. Spacing is fixed when a pool is created and cannot change.
Dynamic fees
Slipstream prices include trading through a dynamic fee module.
A volatility multiplier scales that base fee up in high-volatility regimes and relaxes it toward the base rate when the market is calm, so liquidity providers are better compensated for the arbitrage risk (LVR) that comes with enabling liquidity across different volatility regimes.
MEV capture
Most AMMs leak MEV to external searchers and sequencers. Slipstream instead captures MEV inside the pool, converting what would otherwise be lost to external actors into additional pool revenue. The mechanism differs by network. On select networks, a trade whose priority fee exceeds a threshold pays an extra fee that rises with the priority fee, up to a cap.
Aero's MEV capture identifies MEV activity when the priority fee of the transaction doing a trade (the priority fee is what determines transaction ordering within a block) is above a defined threshold. The tax is then a fee charged (on top of the existing trade fee), which is a multiple of the priority fee value above the threshold.
The captured value accrues as ordinary pool fees and follows the same routing as trading fees. It goes to Token Operators on AERO-earning liquidity and to LPs on fee-earning liquidity.
Slipstream's integration with Aero's core systems
Slipstream integrates with Aero's core systems to optimize LP returns and capital efficiency.
- Pool Tape. Records fee, volume, and volatility data per network at a governance-set cadence. Predictive Allocation, the dynamic fee module, gauge-cap automation, and external integrations read from it directly; no off-network infrastructure required.
- Exchange depth. Slipstream pools are a core source of depth behind trading. Metaswaps can route cross-network trades into them, so an LP can earn from flow that originated on another network Aero operates on.
- AERO Rewards. Set continuously by Token Operators who direct their Allocation Power to the pool.
Risks
Concentrated liquidity offers higher returns but carries distinct risks:
- Impermanent loss (IL). When the two tokens' prices diverge, a withdrawn deposit can be worth less than holding the tokens would have been. Concentration can intensify this within the range.
- Loss-versus-rebalancing (LVR). Concentrated deposits are the most exposed to the opportunity cost of trading against better-informed flow. Slipstream's dynamic fees and MEV capture are designed to offset this cost.
- Out-of-range deposits earn nothing. A deposit outside its range is idle (no fees, no AERO Rewards) until price returns or the range is moved.
- Early-exit forfeit. Switching a deposit out of AERO-earning, or withdrawing it, before a minimum holding period forfeits a portion of its AERO Rewards. Both the holding period and the forfeited portion are dynamic rates set by economic policy.
Advanced
Deposits are NFTs
Each Slipstream deposit is an ERC-721 token with its own ID, holding its range, liquidity and uncollected trading fees. Adding to an existing range uses the deposit-management tools rather than merging balances the way a fungible LP token would.
Getting started
The Liquidity tab displays available Slipstream pools. Liquidity providers set the deposit amount and price range (considering conviction on price movement and tolerance for management) and confirm. The deposit appears in the Portfolio and begins earning immediately. For detailed range-setting guidance and step-by-step instructions, see the Liquidity Management guide.
For integrators and developers, the technical documentation lives in Aero's GitHub repositories.