Launch New Aero Fed and Velo Fed

Proposal to Launch New Aero Fed and Velo Fed


This proposal seeks to launch new cross-chain AMM Feds that are directed at the DOLA/USDC pool on Aerodrome and the DOLA/USDC pool on Velodrome. There are some changes to accommodate the use of native USDC.

Background and Rationale

The Transparency Portal reveals that the existing Aero and Velo Feds contribute over 62% of total on-chain Fed Revenue, through DOLA/USDC pairs utilizing bridged USDC. Recent initiatives by Circle (USDC issuer), Velodrome, and Aerodrome have favored the integration of native USDC, bolstered by matching incentives for liquidity migration. This shift promises improved economic benefits and capital efficiency compared to the bridged USDC pools.

Current liquidity data illustrates a significant engagement with native USDC:

  • Velodrome: $3.92M TVL in native USDC vs. $400K in bridged USDC
  • Aerodrome: $31.3M TVL in native USDC vs. $61.1M in bridged USDC

To capitalize fully on this shift, dedicated Feds are proposed to direct focus and resources towards these more lucrative native USDC pools, thereby maximizing returns and incentivizing further participation through enhanced voting mechanisms.

Technical Impementation

Integration with Circle’s Cross-Chain Transfer Protocol (CCTP) will facilitate swift 1:1 USDC transfers across chains within 20-30 minutes. Legacy support for bridged USDC will remain as a precaution against potential disruptions caused by future updates to CCTP.

  • Layer 2 Enhancements: New functionalities will enable the Feds to toggle between native and bridged USDC to maintain flexibility and operational continuity.

Deployed Contracts

Optimism - Velodrome

Base - Aerodrome

On-Chain Actions

Note: the Aero Fed v1 will not be decommissioned yet (DOLA minter removed), since this pool and Fed have a large TVL, so there is strategic value in keeping some Fed TVL here with the Aerodrome ecosystem still so strong.

  • Remove OptiFedV2 as DOLA minter
  • Add OptiFedCCTP as DOLA minter
  • Accept gov on OptiFedCCTP
  • Accept gov on VeloFarmerMessengerV3
  • Add BaseFedCCTP as DOLA minter
  • Accept gov on BaseFedCCTP
  • Accept gov on AeroFarmerMessengerV2
1 Like

Geat update. Looks like a no brainer.