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Summary and prospect of DEX aggregation trading platform



With the popularity of DeFi, the number of decentralized exchanges (DEX) has risen rapidly, and the importance of DEX aggregation trading platforms has also increased. The DEX aggregation platform (1inch, 0x API, DEX.AG, Paraswap, Totle) integrates the decentralized liquidity of each dex, providing the best price, the best depth, and a clear and concise interface. It can be called the last stop for DEX players.

The DEX aggregation platform has many functions, deep aggregation, and simplified smart contract operations. Now the transaction volume of these aggregation platforms has increased several times dramatically this year. 0x’s API was launched in January, and through the API, orders including 0x Mesh, Uniswap, and Kyber can be obtained as liquidity. In June, 0x’s API transaction volume reached 120 million US dollars.

Blockstream and Sevenlabs cooperated to launch the decentralized bitcoin exchange XDEX: Golden Finance News, Blockstream, Sevenlabs and Poseidon Group cooperated to launch the decentralized exchange XDEX of bitcoin and securities assets. XDEX is built on the open source protocol TDEX and is expected to be launched on IOS and Android in the fourth quarter of 2022. (Nasdaq) [2022/9/3 13:06:45]

But currently the aggregation exchange with the largest trading volume in the market is 1inch, which has traded 1.5 billion US dollars so far. 1inch basically connects all the large DEXs in the market, but uses a combination of centralized off-chain order book transactions and on-chain exchanges with OneSplit.

One of the biggest advantages of 1inch is that it supports real-time aggregation of the depth of each exchange, which is now a killer level when farming is so hot. 1inch also launched its own AMM decentralized exchange, Mooniswap, where market makers can profit from slippage. Mooniswap has been integrated into 1inch, and it has begun to use mooniswap for horizontal monopoly.

PeckShield: AscendEX attackers have transferred 265,000 DAI to Kucoin and 10,000 DAI to an unknown wallet: Jinse Finance reported that, according to PeckShield monitoring, AscendEX attackers (address 0x733...B8b) have transferred 265,000 DAI Transfer DAI to Kucoin, and transfer 10,000 DAI to an unknown wallet (address 0xb61...510).

It was previously reported that AscendEX attackers transferred 500,000 DAI to a new address. [2022/8/11 12:19:21]

However, aggregate trading platforms such as DEX.AG, Totle, and Paraswap have not gained much market share.

Aggregated exchanges accounted for a growing share of total DEX capacity this year. At its peak in June, it accounted for 45% of total DEX volume, but has since dropped to 8%.

Cosmos ecological DEX Junoswap will open RAW Token collection on May 1: On April 19, Cosmos ecological DEX Junoswap announced that it will open the collection of "Fairdrop" Token RAW distributed to the community on May 1, with a window period of one month. By the end of June 1st, unclaimed Tokens will be sent back to the DAO for future distribution. It is reported that the total amount of RAW is 1 billion, of which 20% are distributed to the community as "Fairdrop", which are divided into three categories: JunoSwapLP (a total of 100 million RAW), JUNO pledgers (a total of 80 million RAW), OsmosisLP (a total of 2000 10,000 pieces of RAW). [2022/4/19 14:32:41]

The average transaction size is an important indicator for measuring exchanges. Comparing the two top aggregation trading platforms 1inch and 0x API, the average transaction volume of both is increasing. However, compared to users who traded using the 0x API, the average transaction volume of 1inch users was about $5,000 higher. User growth trends are also different. 1inch is the only aggregator whose number of users transacting has increased month-on-month since January, while the number of users of 0x API reached a peak of 330 in March.

DEX aggregator 1inch collected 165,000 1INCH tokens in the past week and distributed them to the community as governance rewards: According to news on March 10, DEX aggregator 1inch said that it collected more than 732,000 US dollars (165,000 1INCH tokens) in the past week as Governance rewards are distributed to the community. [2021/3/10 18:32:40]

Combining the data of 0x API and 1inch's above three indicators (transaction volume, average transaction volume, number of users) in one graph can provide a more in-depth and intuitive understanding of the evolution of each aggregated trading platform over time. Like we mentioned before, 0x API transaction volumes showed impressive growth in July, but lacked a clear and consistent pattern of growth in any of the three metrics.

Korean virtual currency exchange KDEX recruits blockchain-related talents: Korean cryptocurrency exchange KDEX said it will recruit newcomers interested in cryptocurrency or blockchain and professionals with experience in financial institutions. KDEX expressed its intention to continue to expand the business territory of the cryptocurrency exchange through this recruitment. [2018/4/23]

In contrast, the movement of the bubble to the upper right and the increase in bubble size over time indicate a clearer growth pattern for 1inch. This indicates that 1inch's products may have met the market's requirements.

1inch attempts to mitigate the problem of costly correlation of many different smart contracts caused by order splitting. 1inch integrates GasToken directly into its own smart contract, which allows users to mint Gastokens and store them when they are cheap, and consume them during periods of high gas fees.

Integrating GasToken means that users can use efficient transactions while reducing overall transaction fees. Users can use the older Gastoken (GST2) until June when 1inch developers roll out an improved token called CHI. In short, CHI improves the efficiency of smart contract address size and consumption. As a result of use, CHI produces 1% more efficiently and consumes 10% more efficiently.

Just like GST2, CHI can be deployed in any smart contract in a relatively simple way using Deployer.eth, which means that other aggregation platforms can integrate CHI to save their own users, including 0x API. At present, most of CHI is used through 1inch, and the number of CHI addresses exceeds 1600.

So how has usage been since Chi launched? As expected, as can be seen in the graph below, when gas prices started to rise in mid-July, CHI production activity ceased, while CHI released steadily. Despite rising gas fees, the release of CHI provided key support for 1inch’s ability to increase volume by 94% in July.

To date, 1inch users have saved a total of $300,000 by using GST2 and CHI, with the largest savings since CHI was introduced (from June). In total, users saved $154,000 in July. It is important to note here that, starting in June, the cost savings for users may be due to improvements in CHI's architectural design and wider adoption of the 1inch aggregated trading platform by the general public.

With the continuous growth and decentralization of liquidity in DeFi, DEX aggregation trading platforms can provide users with a better experience through improved UI and evolved tools. In this market, 1inch has become the leader (Note: 1inch recently completed a $2.8 million seed round of financing led by Binance). As differences in liquidity aggregation may become irrelevant between DEX aggregation trading platforms, 1inch may design a token economic model to encourage long-term participation and ensure its market dominance is maintained.

DEX aggregated trading platforms are an exciting but challenging area of future development that will revolve around interoperability (cross-chain) - the ability to securely leverage liquidity outside the Ethereum ecosystem (e.g. Tezos or Cosmos). In this sense, the next biggest opportunity for these projects will come from realizing that liquidity is not only fragmented at the DEX layer, but also exists between different protocol platforms.


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Summary and prospect of DEX aggregation trading platform

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