The decentralized finance (DeFi) protocol landscape is awash with projects, many of which do indeed generate revenue (sometimes quite a bit of it).
But few manage to accomplish both: bringing in a lot of profit while maintaining a somewhat reasonable valuation in the market. Enter Aerodrome, a DeFi protocol that lives on the Base blockchain and has recently been punching above its weight class. Performance data suggest it might really be something to keep an eye on.
Aerodrome recently made waves by handling more trading volume on the USDC/USDT pair this month than it had over the previous three months combined. This remarkable uptick underlines surging user confidence in the protocol and a broader shift of stablecoin liquidity onto Base, Coinbase’s Layer 2 network. The USDC/USDT pair is the most traded stablecoin pair on Base, so the fact that Aerodrome is particularly dominant in this category makes its recent surge in trading volume all the more impressive.
This increase in trading volume isn’t just a figure to be proud of. It incorporates a number of solid fundamentals—deepening liquidity, higher user engagement, and an increasing number of traders who are using Aerodrome as their DEX of choice. The trend also seems to hold some significance as it connects to Base’s maturation as a DeFi ecosystem, with Aerodrome at the forefront.
The recent analysis of the leading DeFi projects, assessed according to their market cap-to-revenue ratios, casts a particularly vivid spotlight on Aerodrome. This is critical because that ratio indicates how much value a protocol generates relative to its valuation. In the case of Aerodrome, it’s generating a lot, to the point that when the analysis lopped off the top two DeFi projects, it was next in line.
Aerodrome has achieved a nearly $147 million revenue run rate, with a current market cap around $570 million. That equates to a market cap-to-revenue ratio of just 3.9x, which makes Aerodrome one of the more efficient protocols in the current DeFi market. This ratio is definitely a signal for both developers and investors: Aerodrome is not just a popular protocol; it’s a profitable one — and it has yet to be fully valued compared to some of its peers.
Unlike Stargate Finance, which casts a rather lopsided picture, other protocols present a more favorable financial depiction. Despite having a market cap around $190 million, Stargate has produced a meager $1.7 million in revenue. Consequently, Stargate—much like many other DeFi protocols—breathes an air of entitlement that bespeaks a glaring weakness within the DeFi ecosystem’s financial underpinnings.
Included in the analysis were other significant projects like these:
Of these, only Metaplex and Bifrost approach Aerodrome in operational efficiency, and even they fall well short.
The placement of Aerodrome in the market speaks very highly of its future growth potential. Its ability to attract truly large trading volumes — especially in stablecoins, which are traditionally seen as low-volatility, utility-driven assets — really does indicate that Aerodrome is an extremely fundamental project. The low cap-to-revenue ratio speaks both to profitability and to the fact that the market may not have priced in Aerodrome’s growth potential.
With the user shift to Base and burgeoning institutional interest in streamlined DeFi platforms, Aerodrome looks set to take an even bigger slice of the market. If its revenue continues on the current tear while sporting a still-calm valuation, it could very soon start being looked at by investors as an A-plus opportunity in the sector.
In a DeFi space that is frequently ruled by overzealous promotion and excessive valuations, Aerodrome is a protocol that stands out as being functional and revenue-generating. At present, it is a hidden gem but not for much longer.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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