AERO inherits token model and value-capturing mechanisms first appeared in Velodrome (VELO). AERO has a single Value-Capturing Mechanism composed of two OoVs (Future Cashflow and Governance) conditioned on Risk Exposure-activated Conditional Action and one OoV (Future Cashflow) conditioned only on Risk Exposure (veAERO lock-up). The value-capturing mechanism operates through a dual-track value capture system: - First, users lock AERO to veAERO (the lock-up condition) - Then, the AERO-veAERO lock-up unlocks two distinct value streams The first stream requires active participation through voting or delegation to capture both governance benefits over emission distribution and associated rewards from fees and incentives. The second stream automatically generates value through rebases based solely on the locked position, creating a baseline reward for lock-up commitment. This architecture creates a balanced system that rewards both passive commitment and active protocol participation, while ensuring that maximum value capture requires full engagement with protocol governance.

Aerodrome uses a portion of its fee proceedings to finance AERO buybacks through various programs. The bought-back tokens are not burned, but rather, locked to veAERO, which decreases the liquid supply but increases the supply of revenue-generating tokens. This does not engender a deflationary appreciation in the usual way.