Explosive Growth of DeFi Aggregators
2021 is shaping up to be a monumental year for decentralized finance aggregators, with year-to-date numbers hinting at a meteoric rise compared to 2020. Analyst
Ashwath Balakrishnan from Delphi Digital has made the exciting observation that the DeFi aggregator sector is on track to blow past last year’s figures. Just think about it: aggregators like 1inch, Matcha, and Paraswap combined for a mere $9.3 billion in 2020. Fast forward to February 16, 2021, when 1inch alone was already knocking on the door of $10 billion! Talk about a glow-up!
Why the Shift to Aggregators?
In the vibrant world of decentralized finance, liquidity reigns supreme. As competition for liquidity turns into a full-on gladiatorial match, a market for aggregators has emerged to please the user base. But what exactly is a DeFi aggregator? Simply put, it’s a platform that collects data and pricing from various decentralized exchanges and automated market makers, presenting it all in an easily digestible format. High gas fees and trading commissions have pushed users to these aggregators to hunt down the best rates for token swaps. It’s like shopping at the ultimate discount store for crypto!
A Look at the Power Players
The DeFi aggregator scene is bustling with popular names, including 1inch Exchange, Matcha, and Paraswap. According to Balakrishnan’s research, 1inch pulls liquidity from over 20 decentralized exchanges, making it a heavyweight contender. In terms of performance, the numbers don’t lie! 1inch has skyrocketed from $325 million per week in mid-December to a staggering $1.8 billion in just a few weeks. Imagine a crypto party with this much hype!
New Users and Daily Transactions on the Rise
The data, courtesy of Dune Analytics, paints a picture of explosive growth. New users, daily transactions, and volumes have surged tremendously since the new year. For instance, Matcha, another shining star in this realm, went from a modest $1 million in daily volume last July to over a jaw-dropping $40 million in January 2021! Perhaps we should call it the ‘Midas Touch’ of DeFi trading.
Better Rates Through Aggregation
When using a DeFi aggregator, you often score better token swap rates compared to employing individual DEXes. Balakrishnan highlights this advantage succinctly: “Uniswap and Sushiswap lead general purposes DEXes in volume and liquidity. But if you’ve used an aggregator for fairly large trades, you’d notice you get routed to other DEXes too.” Moreover, some lesser-known platforms like Kyber Network and Bancor are reaping the rewards, with 38% and 36%, respectively, of their volumes coming from 1inch, thanks to their efficient models for larger trades.
Enhancing User Experience
It’s not just about rates; aggregators like Zapper.fi and Zerion.io are racing to become the “front page of DeFi,” simplifying the user experience for yield farmers and token swappers alike. With their smooth interfaces and improved functionality, these platforms are fostering a new wave of users eager to explore the profitable edges of DeFi.
