Data and history prove that the safest and most productive crypto investing centers around Bitcoin (CRYPTO: BTC) along with some major altcoins such as Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL) .
This strategy typically minimizes risk in the already risky market of crypto, but for those investors seeking astronomical gains, they likely need to search somewhere else, as Bitcoin, Ethereum, and Solana have likely already passed their most explosive days.
Unfortunately, an exceptional level of risk usually comes with expanding beyond these household names, since it usually involves unproven assets without clear utility or fundamentals, as is common with meme coins. Fortunately, though, I might have found the ideal candidate that could be built for the long haul and is still early in its journey: Aerodrome (CRYPTO: AERO) .
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What is Aerodrome?
Aerodrome is a decentralized exchange (DEX) launched in 2023. It is beginning to be referred to as a MetaDex because it combines some of the best characteristics found across the most popular DEXs created to date, like Curve and Uniswap . Aerodrome's unique approach makes it stand out from the crowd.
The major difference between Aerodrome and incumbent DEXs is voting. Aerodrome has an incentive model that rewards participation among users. By locking the AERO token, users receive veAERO. They can then use this new token to vote on specific liquidity pools.
The more voting tokens users pledge to a pool, the more valuable the pool becomes -- and, in turn, the more AERO users receive for locking their tokens. This creates a self-reinforcing cycle, or a flywheel effect, driving more participation and liquidity.
With its attractive voting and incentive mechanisms, Aerodrome draws in not only users but also other cryptocurrencies looking to build liquidity, a vital component cryptos need for longevity. Subsequently, as more users and protocols engage with the platform, the value of Aerodrome's ecosystem grows. This growth, in turn, drives up the value of the AERO token.
The cherries on top
Unlike investing in random meme coins or other obscure cryptos in hopes of astronomical gains, Aerodrome offers solid fundamentals and clear utility in the market. And there are two more aspects that could bolster its long-term prospects.
The first bonus to Aerodrome's burgeoning potential is that it is built on Base , one of the most popular up-and-coming blockchains on the market. Launched by the crypto platform company Coinbase (NASDAQ: COIN) in August 2023, Base is known for its fast speeds, low fees, and compatibility with Ethereum.
In less than a year, Base has risen to become the sixth most valuable decentralized-finance ( DeFi ) blockchain, and as of the last count, Aerodrome makes up nearly half of that value, a share that keeps growing.
Then there is the second bonus. In early 2024, Coinbase Ventures said that it had invested in Aerodrome, which was viewed by many as a vote of confidence in the project due to Coinbase's expertise.
And it gets better. Coinbase has continued to invest in the project over the course of this year. According to data from the crypto research company Nansen, it has invested $2.7 million since the beginning of the year.
While perhaps a stretch, this could be compared to a prominent figure like Warren Buffett investing in a relatively unknown company. Coinbase's continued investment indicates that a major player in the crypto industry believes in the long-term potential of Aerodrome, which should be viewed as a bullish development.
Final words of advice
It should be reiterated that Aerodrome has a small market and is still in its infancy, meaning it carries a significant amount of risk. But if it were to maintain its current trajectory, it could mean great things, especially as this bull market progresses. Should it do so, a valuation similar to what SushiSwap (on the low end) or Uniswap (on the high end) hit in the last cycle would represent a gain of anywhere from fivefold to 43-fold from today's prices.
With the backing of Coinbase and one of the most innovative designs on the market, Aerodrome might just have what it takes to reach these valuations. Still, it's important to tread cautiously with this asset. By no means should Aerodrome make up the majority of your portfolio, but under the right circumstances, it just might be worthy of a small spot.
RJ Fulton has positions in Aerodrome Finance, Bitcoin, Coinbase Global, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, Solana, and Uniswap Protocol Token. The Motley Fool has a disclosure policy .
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