
GM. This is Milk Road, the crypto newsletter that’s more satisfying than popping bubble wrap.
In case you missed it, something massive happened just before Christmas!

This wasn’t just another headline about tokenized stocks. This may have been the moment everything changes…forever.
And there are two big reasons why:
- These tokenized shares will have the exact same legal rights as traditional ones.
- The player who just got the green light is the biggest player in the world - DTCC.
This isn’t a synthetic asset. It’s not a wrapped IOU from some offshore platform.
These are real securities, in token form, issued by the same institution that holds 83% of all U.S. equity assets.
Yes, really. This isn’t just any approval. It’s a game-changer that takes things to a whole new level.
You might not have heard of DTCC before, but here’s why this matters.
DTCC is the infrastructure behind nearly every stock, bond, and securities transaction in the U.S. They’re the engine that quietly powers global markets.
It’s a private, user-owned utility that handles clearing, settlement, and custody for almost everything that moves on Wall Street.
Still sounds a bit abstract? Let’s break it down with numbers:
- Roughly $3-4 quadrillion in transactions are processed each year.
- Around $99 trillion in assets under custody.
- More than 100 million transactions are handled daily.
In short, the biggest player in traditional finance is stepping into tokenization, which means that tokenized assets could start rolling out as early as the second half of 2026.
In fact, you can already see their product in action with a live demo here. It might be coming even sooner than anyone expects.
So how might it change the game?
Well, we already talked about tokenization in a recent Crypto PRO report. One key takeaway was clear: tokenized stocks will bring serious volume onchain.
And when that happens, existing DEXs could be some of the biggest winners. There’s one particular DEX that’s caught our attention recently: Aerodrome.
So…
- What’s the story with Aerodrome?
- Why did they catch our attention?
- How could they benefit from this big announcement?
- What’s their deal with Coinbase?
- Did they really just become profitable?
- And most importantly… could AERO be one of the best ways to ride this new wave of tokenized finance?
Let’s dive in.
WHAT IS AERODROME
To really understand Aerodrome, we need to take a quick step back and start with Velodrome.
Why? Because that’s where it all began. Here’s the story.
When L2s like Arbitrum and Optimism started gaining traction in 2022, Velodrome quickly became the dominant DEX on Optimism.
It captured the majority of the chain’s trading volume and total value locked (TVL), becoming the go-to exchange for DeFi activity there.
If you're not familiar with DEXs, think of them as open marketplaces for crypto trading:
- On one side, you have users who want to swap tokens.
- On the other, there are liquidity providers, also known as LPs. These are people who supply tokens to the platform so trades can happen.
👉 In return, LPs earn a share of the trading fees that come from those swaps.
It’s like setting up a vending machine.
You fill it with products, and every time someone makes a purchase, you earn a portion of the payment.
✅ Now that you understand what a DEX is and how Velodrome became the top platform on Optimism, let’s move forward.
In August 2023, Coinbase launched its own L2 called Base.
The team behind Velodrome immediately saw a big opportunity.
✍️ With tens of millions of users already in the Coinbase ecosystem, the potential for trading activity on Base was much higher.
So they took what they had built, forked the code, and launched Aerodrome on Base.
And guess what? They quickly became the leading DEX there too.

Aerodrome has around 50% of the market share on Base, processing roughly $2B in trading volume each month.
Now, Aerodrome isn’t just bigger than Velodrome. It’s way ahead. Why? Because, just like they predicted, Base sees around 40 times more DEX trading volume than Optimism.
So how did Velodrome and now Aerodrome manage to pull it off? What helped them climb to the top and become the leading DEX on not just one but two major L2 networks?
Once we break that down, we’ll connect the dots back to Velodrome and explore how their relationship could shape what’s next.
WHAT SETS THEM APART
We already went over how DEXs work at a high level, but to really understand what sets Aerodrome (and Velodrome) apart, we need to go a bit deeper.
It’s easy to say that a DEX connects liquidity providers with traders, but the real challenge is attracting and sustaining those LPs in the first place.
Every DEX runs into the same cold start problem. It is a classic chicken and egg problem.
If there’s no liquidity, traders won’t use your DEX. And if there are no traders, LPs have no reason to join:
- But once a DEX builds up enough liquidity, traders begin to show up.
- As trading volume increases, fees go up.
- LPs earn more, and that draws in even more liquidity.
- Prices improve, volume keeps growing, and the whole flywheel starts to turn.
This dynamic isn’t unique to DEXs. It’s the same for any marketplace.
Think about Uber or Amazon.
Once there are enough drivers on the road or sellers listing products, users start showing up.
And as users pay for the service, the ecosystem grows and becomes more attractive for others to join on both sides.
👉 More providers show up, more users come in, and the cycle continues.
This brings us to the business model that Aerodrome uses to attract liquidity providers and more importantly, to keep them around.
It’s called the veModel.
For those who were active in DeFi back in 2021, you might recognize this model as it was first introduced by Curve back then.
This model is known for using its native token as ongoing incentives. In the case of Aerodrome, it is AERO.
Here’s how it works:
1. AERO holders lock their tokens: Users who hold AERO can lock their tokens to receive veAERO, a voting-escrowed version of the token.
2. veAERO holders get voting power: With veAERO, holders can vote on where new AERO emissions (token rewards) should go.
3. New AERO is distributed based on votes: The protocol mints new AERO regularly, and veAERO holders decide which liquidity pools receive these new tokens. (Note: This new issuance does dilute existing AERO supply.)
4. LPs earn AERO rewards, not trading fees: Liquidity providers don’t earn trading fees directly. Instead, they receive AERO rewards based on how much was allocated to their pool through veAERO voting.
5. The protocol collects trading fees: All trading fees go to the protocol itself. These fees, along with other incentives (like bribes from other protocols), are collected by the DAO.
6. veAERO holders benefit from protocol revenue: The DAO collects trading fees and bribes, then distributes them to veAERO holders. This gives them both a share of the rewards and control over which pools get funded and drive the most revenue.
7. The flywheel effect kicks in: More volume means more fees. More fees make veAERO more valuable. That increases demand for AERO, encourages locking, and strengthens the entire ecosystem.
This model rewards long-term participation, gives power to active stakeholders, and creates a feedback loop that can grow the protocol over time.
Now that we understand how it works in theory, it’s completely fair to question it.
Feeling skeptical? That’s great. We actually encourage that kind of thinking.
Because yes, this setup does create constant sell pressure on the native token, and it’s a valid concern.
So let’s dig into the numbers.
Uh oh… 😧 The rest of this report is exclusive to Crypto PRO or PRO All Access members!
Already a Crypto PRO or PRO All Access member? Log in here.
WHAT’S LEFT INSIDE? 👀
- Are they making money or burning through cash?
- What could really unlock their growth potential?
- Is AERO priced right at the moment?
- And when would it actually be worth jumping in?
Upgrade your subscription today to unlock access to all of the milky insights above, PLUS:
- Weekly reports to help you manage investments, allocate capital, take profits, and stay ahead in crypto 📊
- Weekly “Where are we in the cycle?” indicators to help you spot the bull market top before it’s too late 📈
- Access to the PRO Community, where the Milk Road crew & 1000s of fellow PROs talk crypto. Don’t miss the monthly live events! 🫂
Already a Crypto PRO or PRO All Access member? Log in here.
WHAT CRYPTO PRO MEMBERS SAID LAST WEEK:






