The DeFi world is buzzing with a potential paradigm shift. A new analysis challenges the long-held assumption of Uniswap as the undisputed DEX leader, suggesting 1inch might actually claim the crown, based on a nuanced perspective of trading activity.
A tweet thread by Cyrille Pastour, Co-Founder of Swaap Finance, explained how 1inch is the true king of DeFi trading. While traditional rankings prioritize raw volume, which favors Uniswap’s massive liquidity pool, this analysis digs deeper, focusing on frontend volume: trades initiated directly by human users. This metric bypasses bots and arbitrageurs who inflate total volume but don’t represent genuine user preference. Pastour also shared the methodology of his findings in the in a subsequent tweet.
Full Scope Ranking and Bluechip Assets Ranking are two different ways to measure the trading volume of DEXs. Each method focuses on different aspects of trading activity to provide a more nuanced picture of DEX performance.
Full Scope Ranking considers all trading volume on a DEX, regardless of its origin. This includes trades initiated by human users through the platform’s interface, as well as trades made by bots and arbitrageurs. While Bluechip Assets Ranking focuses on trading volume specifically involving blue-chip assets. These are established and highly liquid cryptocurrencies like Bitcoin, Ethereum, and stablecoins.
The market share of Decentralized Exchanges (DEXs) and DEX aggregators by trading volume, as of December 20, 2023, showcases that Uniswap dominates the market with a 49.7% share, likely due to its established brand, deep liquidity pool, and diverse range of trading pairs. While 1inch emerges as a strong contender with a 12.5% share, driven by its aggregator model that searches multiple DEXs for the best price, appealing to cost-conscious traders.
Apart from that, Pastour shared surprising findings. 1inch surpasses Uniswap in frontend volume, potentially reflecting growing user preference for aggregator platforms like 1inch that search multiple DEXes for the best price, maximizing profits and minimizing fees. Uniswap’s recent frontend fee likely contributed to this trend, pushing cost-conscious users towards alternatives.
However, Uniswap maintains a strong presence i.e. second in blue-chip assets volume. Its dominance in established cryptocurrencies indicates trust and stability, attracting “serious” traders. It has impressive frontend volume with the fact that even in a bear market, its user base remains significant, showcasing resilience and value recognition. The new feature “Uniswap X” aims to compete with aggregators, potentially reshaping the DEX landscape by combining Uniswap’s liquidity with a more user-friendly interface.
