Add AERO Market on Base


Gauntlet proposes onboarding AERO as collateral on Moonwell Base deployment. Due to the market demand and growth of AERO liquidity on Base we think it is appropriate to list the asset.

This proposal has been meticulously developed in accordance with our Moonwell Asset Listing Framework v2, ensuring all critical details necessary for introducing a new asset are thoroughly addressed. Given that AERO is an established asset on Base with robust on-chain liquidity and DEX support, most required data points are readily available and included in this document.

In line with the procedures established by the Moonwell Asset Listing Framework v2, Gauntlet plans to submit this proposal for a Snapshot signal vote shortly. Should this vote pass, and following the implementation of our initial risk parameter recommendations, Gauntlet will work with other Moonwell contributors to help initiate the AERO market smart contract prior to the on-chain activation vote.

General Information

  • Asset Name: AERO
  • Address: 0x940181a94A35A4569E4529A3CDfB74e38FD98631
  • Project Description: Aerodrome Finance is a next-generation AMM designed to serve as Base’s central liquidity hub, combining a powerful liquidity incentive engine, vote-lock governance model, and friendly user experience. Aerodrome inherits the latest features from its sister protocol Velodrome V2Maybe a second bullet underneath that briefly describes AERO.
  • Token Description: AERO is the native utility token of Aerodrome Finance. Aero holders can vote-escrow their tokens (converting them to veAERO) for up to 4 years to participate in governance and earn protocol fees.
  • Benefits to Moonwell Community:
    • Expands Moonwell’s stable of supported assets.
    • Bolsters the synergy between Moonwell and Aerodrome, the top two DeFi projects in the Base ecosystem. This continued collaboration can lead to increased adoption through cross-pollination of user bases.
    • Allows WELL tokenholders providing liquidity on Aerodrome to utilize their earned AERO directly on Moonwell.
  • Resources:

Market Risk Assessment

Gauntlet has developed custom risk parameters for the AERO token launch, based on our models and best practices.

Parameters Values
CF 0% (Expected 70%)
Supply Cap 6,000,000 ($10,000,000)
Borrow Cap 3,000,000 ($5,000,000)
Protocol Seize Share 3%

IR Recommendations

IR Parameters Recommended
Base 0
Kink 0.45
Multiplier 0.07
Jump Multiplier 3.15
Reserve Factor 0.25

Supporting Data

Market Overview

Metric Value
Market Cap $675,508,415
30D AVG Volume (CEX+DEX) $44,710,212
Circulating Supply 402,444,318
Herfindahl Index 0.0284

Volatility & Max DD

The maximum and minimum daily log returns for AERO are 65.5% and -26.6% respectively over the past 60 days. We consider the minimum daily log returns as a suitable benchmark for setting Collateral Factor, giving the max CF at ~74% however, to be more conservative we recommend a starting CF of 0% to test the market and expect to reach an ideal state with CF of 70%.


The TVL of the protocol has grown exponentially to a total of $1.43bn, Aerodrome is the largest DEX on Base. Gauntlet deems this TVL adequate to classify AERO as an asset that has inherent value/use cases and to be a listable asset on Moonwell Base market.

Supply and Borrow Caps

Screenshot 2024-04Fila-16 at 10.20.21 AM

Borrow and supply caps are the primary parameter recommendations we can make to mitigate protocol risk when listing new assets. Gauntlet recommends setting the borrow and supply caps strategically with available liquidity on-chain. There is sufficient liquidity to trade upto $20M worth of AERO tokens with a slippage of 25% signalling a maximum cap setting of 12M AERO tokens. However, we recommend a more conservative supply cap of 6M AERO tokens and 3M AERO tokens for borrow cap to bootstrap the market. Gauntlet will continue to monitor these caps and increase them with respect to market demand and liquidity.

Token Concentration Risks

As with governance tokens, there have been incidents (Curve) where large sums of tokens were used as collateral to borrow on lending protocols. Gauntlet suggests that such risks can be averted by applying conservative Caps along with using the Herfindahl Index to gauge token concentration across wallets.

The Herfindahl Index serves as a measure of fund concentration within addresses on the network, offering insight into the distribution of funds among participants. In our context, the “market” encompasses the total supply held in externally owned accounts (EOAs), while the “market share” denotes the relative balance of each address compared to this total supply. Consequently, the Herfindahl Index condenses this information into a single value, reflecting the extent of token concentration across network addresses.

Scoring between 0 and 1, the Herfindahl Index provides a clear indication of supply concentration: higher scores signify significant concentration, whereas lower scores suggest a more balanced distribution of funds among addresses. Specifically, it aids in pinpointing tokens where a single entity holds a substantial portion of the token supply.

Our findings show that excluding major smart-contracts that are of either AMM or staking pools, the HI of AERO is 0.0284 suggesting a more evenly distributed ownership across the network.

IR Parameter Specifications

AERO IR Curves

Utilization Borrow APR Supply APR
0% 0 0
45% 3.15% 1.06%
100% 176.4% 132.3%

We recommend an IR curve similar to other assets on the protocols, with a kink at 45% and borrow APR of 3.15% at kink.

Smart Contract Risk

  • Github Repo
  • Contracts
  • Age of Token: 234 Days
  • Number of token contract transactions: 5,786,593
  • Is it upgradeable?
    • No, the token contract is not upgradeable. It does not use any proxy or upgradeability patterns.


  • Top 10 Holders
  • Privileged Roles:
    • ”minter” - The address that has the right to mint new tokens. Initially set to the contract deployer, and can be changed by the current minter using the setMinter function.
    • ”owner” - Set to the contract deployer. However, the owner variable is private and not used in any function, so it doesn’t have any special privileges in the current code.
  • Is the token pausable?*
    • No, the token is not pausable.
  • Does the token have a blacklist?
    • No, the token does not have a blacklist functionality.

Oracle Assessment

  • Oracle Price Feed:
    • The official Chainlink oracle price feed address for the $AERO token on the Base network is AERO/USD.
  • On what network does the underlying asset exist?
    • Base
  • Asset Nature:
    • The $AERO token is not a synthetic, wrapped, or staked version of any underlying asset. It operates independently on the Base network To access more detailed information about the $AERO token’s Chainlink oracle price feed, please visit the Chainlink price feed documentation page here.


The addition of AERO to Moonwell Base presents a strategic opportunity to enhance the diversity and robustness of protocol asset offerings. The risk analysis by Gauntlet, alongside the strong market performance and liquidity of AERO, supports a favorable risk profile. Implementing this recommendation could drive further integration within the Base ecosystem, benefiting Moonwell community and stakeholders by providing more options for investment and collateral. We recommend proceeding with the onboarding process, following the outlined risk parameters and monitoring the market response closely to make any necessary adjustments in the future.

Gauntlet invites the Moonwell community to delve into this proposal, share insights, and help shape our collective future. Your feedback is invaluable as we weigh the benefits and considerations of activating an AERO market on Moonwell. In the following days, Gauntlet and contributors will move forward with an off-chain signal vote to help further gauge community sentiment.


As specified in the Asset Listing Framework v2, Gauntlet does not cover smart contract risks or any technical risks. Any of the smart contract or technical risk references or guidelines provided in this document are provided as general best practices by either Gauntlet or the Moonwell community. We defer to auditors with expertise in smart contract risk to provide their assessment.

Onboarding new collateral assets is inherently a risky process and contains several strategic decisions the community has to make, with tools the community decides to use.


This is an exciting proposal. Aerodrome has been a strong partner project in the Base ecosystem and the market cap has grown significantly since launch last year. Moonwell also has the largest Aerodrome relayer, and WELL/WETH pools on Aerodrome have the deepest WELL liquidity on any exchange. The PoL flywheel created by Aerodrome benefits both of our communities:

  • WELL holders can LP on Aerodrome and earn AERO rewards
  • AERO holders would be able to supply on Moonwell and earn WELL, as well as borrow or leverage their AERO holdings
  • More AERO users in the Moonwell community also means we may earn more veAERO votes for our pools, further increasing the already attractive AERO rewards for LPs

I believe AERO holders will appreciate being able to borrow other assets against their collateral, and these assets could then be LP’d on Aerodrome, which further increases the shared benefits to both communities.

This proposal would strengthen the community bonds between the two strongest communities on Base; I’m a big supporter! Let’s get more Based together!


Yes please!! :star_struck::star_struck::star_struck: Love Aero!


This is fantastic for all the reasons mentioned in the “Benefits to Moonwell Community” section. All for it!


LGTM! Send it! :rocket::rocket::rocket::rocket:

Aerodrome looks like a solid project and a great partner.


It is a very good opportunity for both $WELL and $AERO