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How did LidoFinance generate over $260K in AERO rewards in Epoch 33, by only deploying $7.3K in wstETH incentives?

Read on to see how Lido maximizes its impact on Aerodrome to attract over $20M in wstETH liquidity.

The central trading and liquidity marketplace on BASE

https://aerodrome.finance

First, a TL;DR on the Aerodrome Flywheel.

Each week, veAERO voters direct AERO emissions to their desired liquidity pools.

In return for their vote, they receive the swap fees and any additional incentives from the pools they choose.

As AERO rewards flow to pools, liquidity follows, leading to increased volumes and fees.

Fees attract more veAERO votes, extending the cycle; thus, the Aerodrome flywheel kicks off.

More can be seen in the video here:

Lido was an early adopter of the Aerodrome flywheel, starting incentives in Epoch 10 for the WETH/wstETH and AERO/wstETH pools.

As liquidity grew, trading fees increased and encouraged more votes from veAERO lockers, which lead to more $AERO rewards and deeper liquidity.

In Epoch 32, wstETH pools received $47.6K in swap fees, representing 6.5X the value of Lido's own voting incentives.

Swap fees ensure consistent votes from veAERO lockers, more AERO emissions for LPs, and thus deepening liquidity.

Additionally, Lido uses Relay to automatically vote for its pools and compound rewards into veAERO, qualifying them for veAERO airdrops as part of the Flight School program.

So far, Lido has accumulated a total of 645K veAERO (over $1M value) at no cost to the protocol.

Lido's strategy delivered close to $260.8K in AERO rewards in Epoch 33, turning $7.3K wstETH into a 35X boosted rewards on their incentives.

A masterclass in using ecosystem dynamics for massive impact.

Cumulatively, Lido's strategy has resulted in:

• $2.4M in AERO to wstETH pools
• $1.1M veAERO airdrops to Lido
• $0.5M fees to wstETH pool voters

The total incentives committed by Lido were just $0.2M, incredible results.

By leveraging incentives, POL, and veAERO, protocols can build self-sustaining liquidity programs at low/no cost.

LidoFinance are experts at using the Aerodrome flywheel.

Care to explore the potential at Aerodrome? Let us know. 

As AERO rewards flow to pools, liquidity follows, leading to increased volumes and fees.

Fees attract more veAERO votes, extending the cycle; thus, the Aerodrome flywheel kicks off.

More can be seen in the video here:

https://twitter.com/aerodromefi/status/1782469383539061092