1inch Witnesses Surge in Volumes and Market Dominance
In the last quarter of 2023, 1inch experienced a significant increase in trading volumes and market dominance. According to Messari’s report, the decentralized exchange (DEX) aggregator saw over $30 billion in executed volume, capturing a commanding 64% share of the Ethereum DEX aggregator market. This surge in volume suggests greater adoption of 1inch as a backend solution and the expansion of aggregator platforms.
Increased Trading Activity in Q4
The growth in transactions can be attributed to new products introduced by 1inch. The Limit Order Protocol (LOP) and 1inch Fusion witnessed increased activity, while transactions in the Aggregation Protocol declined during the quarter.
Trades conducted on Uniswap V3 and V2 accounted for a larger share, constituting 40% of trades and 8% of trade volume, respectively. The volume generated by 1inch on these two Uniswap versions doubled from $5.6 billion in Q3 to $10 billion in Q4.
PancakeSwap remained a popular execution venue, receiving over $1 billion in trade volume from 1inch for the second consecutive quarter.
Expansion of Market Share
In Q4, 1inch experienced significant volume growth compared to its competitors, leading to an expansion of its market share from 59% to 63%. CoW Swap was the only competitor to gain market share during this period, holding 11% of the aggregator volume on Ethereum. ParaSwap and 0x held 11% and 10% of the aggregator volume, respectively.
Strategic Treasury Management by 1inch DAO
The 1inch DAO focused on diversifying its stablecoin holdings in Q4. It swapped a million USDC for DAI and deposited these funds as sDAI to earn interest. This marked the first reallocation since the Q2 deposit of 1 million USDC in Aave for interest.
On the expenditure side, the DAO allocated $890,000 USDC to fund support services for users within the 1inch Network on December 30. In total, slightly over $1 million was used in three distinct transactions.
The staked amount of 1INCH increased by 7% in the fourth quarter.
Hot Take: 1inch Emerges as Dominant DEX Aggregator
With its substantial surge in volumes and market dominance, 1inch has established itself as a leading DEX aggregator in the cryptocurrency market. The increased trading activity and expansion of market share highlight the growing adoption of 1inch as a backend solution. The strategic treasury management by the 1inch DAO further strengthens its position in the industry. As cryptocurrencies continue to gain popularity, platforms like 1inch play a crucial role in facilitating efficient and decentralized trading. With its impressive performance in Q4, 1inch is well-positioned for continued success in the future.
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