The last year has witnessed significant changes for decentralized exchange (DEX) aggregators on the Ethereum blockchain. This market, which was previously dominated by a single protocol, now offers a much more dispersed competitive picture. The rise of Kyber in particular draws attention.
New distribution in market shares
Kyber currently stands out with around 31 percent market share. While CowSwap follows it with 22 percent, the share of 1inch, which has been the market leader for a long time, decreased from 30 percent to 15 percent. This chart indicates that, contrary to the trend of consolidation and concentration in most subheadings in the crypto industry, diversity among DEX aggregators is increasing.
1inch controlled most of the market, especially in the 2021-2022 period. In those years, aggressive liquidity mining campaigns were being carried out in the DeFi space. But after these incentives ended, 1inch’s market share shrank rapidly. Industry watchers have again raised the question of how much of aggregators’ transaction volume reflects actual user preference and how much reflects incentives offered.
What does the data measure?
Current statistics only cover the volume that end users send directly to aggregator protocols. If a user first initiates a transaction from one aggregator and that transaction is passed through another aggregator, that volume is only counted at the first point. Additionally, flash loan transactions are not included in the figures. This method may not fully reflect the transportation power of protocols, especially those that provide infrastructure to other aggregators.
It should be noted that the data only covers transactions made directly through the collector, and the actual volume of the protocols providing infrastructure services may be higher.
Experts in the industry state that whether these new balances in the market are permanent will become clear depending on the maturation of token reward and incentive programs over time.
Competition is taking shape again
Competition between aggregator protocols on Ethereum has reached its highest level in recent years. In an area where there were only a handful of players before, many protocols are now in competition. The era when a single name held most of the market is over.
Kyber is one of the prominent names in this field. Kyber Network, known for the liquidity it offers to different projects in the decentralized finance world, has recently taken the leadership of the sector by increasing its transaction volume and number of users.
CowSwap, on the other hand, attracts the attention of users especially with its low transaction fees. The platform, which has achieved a rapid increase in its market share in recent months, has managed to create a space for itself in the sector with its different business model.
1inch, on the other hand, is having difficulty maintaining the advantages and size it gained in the early periods of the market. It is observed that after the decrease in incentives, there is a change in user trends and the market is increasingly divided into more protocols.
In short, it can be clearly seen that market shares are dispersed and competition is reshaped among Ethereum DEX aggregators.
