🥛 UNI got its 40% week. Is AERO next? 📈

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Here’s what we’ve got for you today:

✍️ Uniswap got its 40% week. Is Aerodrome next?
🎙️ The Milk Road Show: Nexo’s Big U.S. Comeback: Why Crypto Lending Is Booming Again.
🍪 Over the past 24 hours Robinhood Chain collected a record $4.45M in fees.

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UNISWAP GOT ITS 40% WEEK. IS AERODROME NEXT? 📈

We've been talking a lot about tokenized stocks on Robinhood Chain, and how all of that Uniswap-hosted trading has been pushing the UNI token up…

It's worked out nicely, too.

Our PRO analyst John Gillen bought UNI on August 28 at ~$4.45, and it's traded above $6 since (+40%).

But Robinhood and Uniswap aren't the only games in town.

On August 24, Coinbase launched its own tokenized stocks on Base, with its own DEX of choice: Aerodrome.

Before we get to Aerodrome though, we should cover why the UNI trade worked in the first place - because it isn’t JUST about the stock-memecoin pairings we covered yesterday…

The U.S. stock market is open 6.5 hours a day, 5 days a week, which leaves over 80% of the week with no market at all (even though news keeps breaking through all of it).

Tokenized stocks fill in those hours.

About 60% of Robinhood Chain's stock token trading now happens outside regular market hours, when no traditional market maker is quoting a price at all.

Source: Token Terminal

That's an entirely new trading session, and whoever hosts the liquidity for it collects the fees.

Uniswap ended up holding 99% of the stock token liquidity on Robinhood Chain, and the volume running through it has tripled in a fortnight, from $1B cumulative on August 21 to over $3B by September 2.

And as we covered yesterday - those fees feed a mechanism that buys UNI on the open market and burns it (hence the +40% week).

Then Coinbase turned up.

Its version put tokenized Nvidia, Apple, Meta and Alphabet shares on Base, each backed 1:1 by real shares sitting in regulated custody (not a synthetic proxy tracking a price).

Aerodrome got day-one liquidity, and roughly $103M flowed through its pools in the first few days, peaking near $27M in a single day.

That's off four stocks, in week one.

Uniswap has been doing closer to $127M a day, but it's had a two-month head start - plus, a much longer list of stocks and ETFs to trade against.

… and Coinbase says more tokenized stocks are landing in the coming weeks.

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UNISWAP GOT ITS 40% WEEK. IS AERODROME NEXT? (P2) 📈

Aerodrome is already the dominant DEX on Base, typically handling 50%+ of the chain's trading volume.

100% of the revenue it generates goes to holders who lock their tokens up (which converts them into veAERO).

That's running at roughly $60M a year against a market cap under $500M, so about 13% of the protocol's entire value reaches lockers annually, with roughly half the supply locked at an average of 3.8 years.

The downside being, if you hold AERO without locking it, you're handing your cut of revenue to everyone who staked.

There's also this…

Source: Blockworks

Those new tokens pay liquidity providers to park capital in Aerodrome's pools, which is what keeps trading there cheap. It's the cost of being Base's liquidity hub.

Unfortunately, for those of you that hold AERO, it means the protocol has been shrinking your slice of the pie faster than it's been paying you.

But this isn’t permanent. Issuance is down ~61% from a year ago, so that cost is falling.

The proper fix is Aero, an upgrade that merges Aerodrome with sister protocol Velodrome and ties new issuance to actual revenue instead of a preset schedule (it was slated for Q2, but still hasn't shipped).

All told, we've got a pretty clean setup here.

AERO sits ~9% lower over the past week while UNI ran 40%:

Similar story to UNI (capturing the tokenized stock trade).
One-eighth of the market cap.
No re-rating yet.

The bull case needs Coinbase's next batch of stocks to arrive and trade in size, so revenue grows into the issuance.

John's take is that the volume is coming for Aerodrome, and with it, gains (hopefully).

In fact, he's already started buying in preparation. 😉

John’s UNI call was six days ago and it's up over 35% since, if you don’t want to miss his next entry on AERO, join Milk Road PRO for a buck for 7 days.

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Woah! Over the past 24 hours Robinhood Chain collected a record $4.45M in fees. That's more than three times Solana, Ethereum, Base and Hyperliquid COMBINED.

Alex Cutler: "Market making" is one of the most exclusive clubs in finance. But on Aerodrome, anyone can come onchain and be the market maker.

Kyle Reidhead: Crypto equities are better than raw tokens, because when crypto chops sideways, the businesses of these companies keep compounding anyway.