Aerodrome, Velodrome tokens plunge 20% following merger unveil

Aerodrome (AERO) and Velodrome (VELO) tokens both decline by 20% on Thursday following their parent organization Dromos Labs' announcement that it will merge both platforms through the launch of a new unified liquidity trading platform.

Dromos Labs unveils new trading platform Aero, plans expansion to Ethereum and Arc

Dromos Labs, developer of decentralized exchanges (DEX) Aerodrome, on Coinbase-backed Layer 2 Base, and Velodrome on Optimism, announced the launch of Aero.

Aero will serve as a unified trading system that addresses liquidity fragmentation by merging Aerodrome and Velodrome into a single platform.

While Base will be the central hub for Aero, it will expand to the Ethereum mainnet and Circle's Layer 1 network Arc. It is also built for easy integration into other Ethereum Virtual Machine (EVM) chains.

"Aerodrome has been successful on Base and is excited to expand to effectively service other Ethereum networks via Aero," said Dromos Labs CEO Alexander Cutler during a speech at its 'New Horizon' event on Wednesday. "Just as the world came online, it is now coming onchain. Aero is at the vanguard of a financial system better, faster, and cheaper than the incumbent."

Dromos Labs also unveiled the latest version of its DEX operating system, MetaDEX 03, introducing a "dual engine model" to prevent value leakage. The new OS is expected to reduce costs and boost revenue. MetaDEX 03 also comes with a new feature, Slipstream V3, which aims to intercept Maximal Extractable Value (MEV) auctions and internalize the resulting revenue within its platform.

The new unified Aero platform will launch in Q2 2026, with a native token, AERO, that combines the existing AERO and VELO tokens. The token's distribution will be based on the current revenue split between Aerodrome and Velodrome. AERO investors will get 94.5%, while VELO holders will receive 5.5%, without "dilutions."

AERO, VELO takes a 20% dive following merger announcement

AERO is down 20% over the past 24 hours at the time of publication on Thursday. The token has declined below the confluence of its 50-day, 100-day and 200-day Exponential Moving Averages (EMAs).

AERO is approaching a short-term support level near the $0.90 psychological level, which it bounced off between October 26 and 28. A failure to hold this level could send its price toward the $0.70 key level. On the upside, AERO has to move above the EMAs' confluence to retest the $1.21 resistance.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) have declined below their neutral levels, indicating a dominant bearish momentum.

VELO, on the other hand, is down 20% over the past 24 hours, trading at $0.0374 at the time of publication on Thursday.