The Rise of 1inch: A Dominant Player in the DEX Aggregator Market

The Rise of 1inch: A Dominant Player in the DEX Aggregator Market

In the fourth quarter of last year, 1inch witnessed a significant surge in volumes and market dominance, reflecting the overall resurgence of the market. According to a recent report by Messari, the popular DEX aggregator recorded over $30 billion in executed volume, capturing a commanding 64% share of the Ethereum DEX aggregator market. This substantial growth in volumes from external sources signifies the increased adoption of 1inch as a backend solution and the expansion of aggregator platforms.

The impressive transaction growth can be primarily attributed to the introduction of new products offered by 1inch. The report highlights increased activity in the Limit Order Protocol (LOP) and 1inch Fusion as key contributors to the surge in transactions. However, it is worth noting that transactions in the Aggregation Protocol experienced a decline during the quarter.

A noteworthy development during the fourth quarter was the increase in 1inch trades conducted on Uniswap V3 and V2. The share of trades on Uniswap V3 and V2 saw an 8% and 3% increase, respectively, accounting for 40% of trades and 8% of trade volume. The volume generated by 1inch on these two Uniswap versions also witnessed substantial growth, rising from $5.6 billion in Q3 to $10 billion in Q4.

While 1inch enjoyed significant growth, it faced competition from emerging players. CoW Swap emerged as a significant competitor by gaining 11% of the aggregator volume on Ethereum during the quarter. ParaSwap and 0x also held considerable market share, with 11% and 10% of the aggregator volume, respectively, in Q4.

Throughout Q4, the 1inch DAO focused on strategic treasury management. The DAO diversified its stablecoin holdings by swapping one million USDC for DAI. These funds were then deposited to earn interest as sDAI, marking the first reallocation since the Q2 deposit of one million USDC in Aave for interest.

On the expenditure front, the 1inch DAO utilized slightly over $1 million in three distinct transactions. Notably, on December 30, $890,000 USDC was allocated to fund support services for users within the 1inch Network. This investment demonstrates 1inch’s commitment to providing a seamless user experience and enhancing its network.

1inch experienced remarkable volume growth compared to its competitors in Q4, leading to an expansion of its market share from 59% in Q3 to 63% in Q4. With its growing dominance, expanding product offerings, and strategic treasury management, 1inch is well-positioned to continue its growth trajectory and solidify its position as a dominant player in the DEX aggregator market.

1inch’s surge in volumes and market dominance in the fourth quarter of last year highlights its growing popularity and adoption as a backend solution. With a focus on developing innovative products, expanding its presence on popular platforms like Uniswap, and strategic treasury management, 1inch has established itself as a leading player in the DEX aggregator market.

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