Aerodrome Founder Denies that Coinbase 'Stabbed Them in the Back'

Aerodrome Finance founder Alex Cutler says Coinbase’s decision to launch its new verified pools on Uniswap rather than Aerodrome was no stab in the back. Rather, it was Aerodrome’s decision not to participate.

The publicly traded U.S. cryptocurrency exchange launched its Coinbase Verified Pools on March 18, offering institutional and retail traders a trusted way to access onchain liquidity in the decentralized finance (DeFi) ecosystem.

In the product, liquidity providers have undergone Know Your Customer (KYC) identity verification. This is intended to interest institutional buyers who want in on DeFi but are worried about dealing with potentially bad actors.

Some in the community saw Coinbase's decision to build its Verified Pools on the Uniswap V4 protocol as a betrayal of Aerodrome, one of the biggest DApps on Coinbase’s Base Layer 2 ecosystem.

Cutler told The Defiant that Coinbase had reached out to Aerodrome last summer, early in the development process, but that Aerodrome “chose to not immediately prioritize building things out.”

“We see long-term opportunity with verified pools, but in the short to medium term their ability to attract meaningful usage is still unproven as we've seen with products like AAVE Arc,” Cutlet said in an interview. “This is just the start of the institutional DeFi experiment and our focus is always on being best to market, not first to market.”

Base Liquidity Hub

Founded in August 2023, Aerodrome is an automated market maker on Base, intended to be the Layer-2 network’s central liquidity hub. It has a total value locked (TVL) of $875 million and a 24-hour volume of $30 million. Uniswap has a TVL of $4.1 billion and volume of $266 million.

In February 2024, Aerodrome received funding from the Base Ecosystem fund, led by Coinbase Ventures, that caused its AERO token to spike from $0.09 to $0.62 in a week. It’s currently at $0.53, having dropped from an all-time high of $2.21 in December at the height of the bull market.

No Betrayal

“People think this is @coinbase stabbing @AerodromeFi in the back,” wrote David Hoffman, co-founder of media company Bankless and general partner at Bankless Ventures. “Aerodrome is one of the biggest apps on @base, with a hugely supportive community. Yet Coinbase chooses Uni V4 for its liquidity, not Aerodrome.”

Hoffman suggested that, rather than a snub, the problem might be that Aerodrome doesn’t have the capacity to build it.

That’s not true either, Cutler told The Defiant.

“Aerodrome's design is completely modular so we can add new pool types that seamlessly tap into Coinbase KYC attestations,” he said. “And we can do it without the fragmentation created by UniV4 hooks.”

Aerodrome remains “in total alignment with Coinbase, we speak to them multiple times every day, they are one of the largest lockers of our token, and they are active users of the protocol,” Cutler added. “That is why they engaged us early on verified pools and why we'll stay close to their development.”