Aerodrome's native token, AERO, climbed approximately 19% to become one of the market's top daily gainers, supported by on-chain capital and exchange activity. However, weak protocol-level earnings have raised questions regarding whether the advance can be sustained.
TVL and Trading Activity Support Recovery
According to DeFiLlama data, Aerodrome's Total Value Locked (TVL) increased from $247.96 million on August 19 to $271.16 million six days later. Trading activity also saw improvements across the protocol, with decentralized trading volume reaching $663 million and trading fees totaling $2.53 million over a seven-day period. This measured TVL expansion pointed to steady demand rather than excessive capital inflows, potentially reducing the risk of sudden volatility.
Traders Take Bullish Positions
In the derivatives market, AERO's perpetual funding rate reached 0.0066% according to CoinGlass. Positive funding rates indicate that long-position traders paid short-position traders to maintain their contracts. Additionally, the Long/Short Ratio stood above the neutral level at 1.035, with exchanges including Binance and OKX displaying bullish positioning that suggested traders expected the recovery to continue. Nevertheless, analysts note that rising leverage could amplify downside risks should momentum weaken.
Protocol Earnings and User Growth
Despite improvements in market activity, Aerodrome's protocol-level earnings remained weak. DeFiLlama reported Q3 2026 earnings of negative $6.78 million, marking the protocol's largest quarterly loss since Q3 2025. These losses present a challenge to AERO's valuation following its recent price surge, as increased selling pressure could materialize if investors view the asset as overvalued.
At the same time, adoption metrics remained positive. New users totaled 2,334, accounting for more than 72% of the 3,227 daily active users, highlighting a central tension between improving user growth and declining protocol profitability.
