Aerodrome developer Dromos Labs will launch a new protocol and token in the second quarter of 2026 in a bid to supplant Uniswap as the dominant decentralised exchange in the Ethereum ecosystem.

The new protocol, Aero, will simplify the arduous process of swapping tokens across different blockchains and prove more efficient at luring the investors who provide liquidity, according to Dromos Labs executives. That liquidity, in turn, will allow Aero to offer crypto traders better prices than its competitors.

Aero will also launch on Ethereum, putting it in direct competition with Uniswap on the blockchain where it has long dominated.

Dromos’ announcement came just days after Uniswap leadership proposed a major overhaul of the protocol’s token. That overhaul includes the long-debated “fee switch,” an upgrade that would divert a portion of protocol revenue from liquidity providers to tokenholders.

“Never in my life did I believe, that on the eve of one the biggest days of my life … that we could ever be so lucky as to be gifted, by our biggest rival, a mistake of this magnitude,” Dromos Labs CEO Alexander Cutler wrote on X on Monday.

Aerodrome is the largest decentralised exchange, or DEX, on Base — by some measures the largest layer 2 blockchain on Ethereum. A sister protocol, Velodrome, is the largest DEX on Optimism, another L2.

But they have yet to expand to Ethereum, by far the largest smart contract blockchain in the world. There, Uniswap has long been dominant. In October, it processed transactions worth more than $123 billion, according to DefiLlama data.

In that same span, Aerodrome and Velodrome processed $26 billion in transactions.

Competition with Uniswap

Uniswap’s fee switch proposal was embraced by tokenholders, who have long clamored for a way to share in Uniswap’s success. But Dromos Labs executives see it as a blow to Uniswap’s liquidity providers, a concern raised by some members of the cooperative that ostensibly manages the protocol.

“What Uniswap is going to do is, they’re going to take a little cut from liquidity providers,” Luis Alberto, the executive director of the Aerodrome and Velodrome Foundations, told DL News.

“We now think that Aero, by putting all the value into liquidity providers through the token, is exactly how you win.”

In order to compensate liquidity providers, Uniswap leadership proposed an upgrade called the Protocol Fee Discount Auction, which would “add a new source of protocol fees by internalizing MEV that would otherwise go to searchers or validators.”

Under the hood

During a day-long conference in New York on Wednesday, Dromos Labs executives detailed Aero’s under-the-hood upgrades.

Aero will feature a built-in “bridge,” technology that allows traders to move tokens across blockchains. That will allow them to trade across blockchains — typically a multi-step process — with a single click.

The new protocol will also boost the incentives that draw traders and liquidity providers to DEXes, by capturing revenue from additional sources, such as MEV, and distributing it among Aero tokenholders who “vote” to reward investors who provide liquidity for certain trading pools.

In a nod to the growing influence of traditional financial firms in the crypto economy, some of those pools will be able to implement background checks — a nonnegotiable requirement for the risk-averse titans of “TradFi.”

“We’re aggregating these markets that were disconnected for the most part,” Alberto said. “You needed to use different UIs to swap a token, bridge, swap again on the new network, etc. And now you can just do it in one app, and also all that value comes to the token itself.”

Aero will include a token launchpad, with tiers ranging from a permissionless, Pump.fun-style platform to one targeted at regulated financial institutions.

Additionally, the foundations established to support the growth of Aerodrome and Velodrome will merge two initiatives into something called the Momentum Fund, which will buy back Aero tokens in response to market conditions.

Still, it will be an uphill battle to dethrone a competitor that enjoys the power of incumbency as well as brand trust built over the past seven years.

“We’re very excited for that markets-based competition, where it’s 100% about, ‘what is the most capital efficient?’” Alberto said.

“Even if you like the Uniswap brand, if you’re a trader, you’re going to take the most efficient route possible, because you want to trade the best price possible. And so it doesn’t matter who’s offering it.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.