The decentralized finance (DeFi) ecosystem has grown rapidly, largely driven by the liquidity mining boom that began in the second half of 2020. This expansion has elevated infrastructure development and user engagement across key sectors like lending, decentralized exchanges, asset management, stablecoins, and aggregators.
Among these, decentralized exchange (DEX) aggregators have emerged as critical tools. They solve a fundamental problem: liquidity fragmentation across numerous DEXs. By sourcing liquidity from multiple platforms, aggregators ensure users get the best possible prices for their trades.
This analysis provides a comprehensive, data-driven comparison of leading DEX aggregators, focusing on their operational mechanisms, market behavior, and performance.
Understanding DEX Aggregators
DEX aggregators are protocols that combine liquidity from various decentralized exchanges to optimize token swap rates. They execute trades across multiple pools and routes, minimizing slippage and improving pricing for end users.
When a user initiates a trade, they input parameters such as:
- The token pair and trade direction
- Trade size
- Maximum acceptable slippage
- Preferred DEXs (optional)
The aggregator’s algorithm then computes the optimal trading path, which may involve:
- Splitting a large trade into smaller ones
- Routing through intermediate tokens
This process, while complex, results in better effective prices, even after accounting for gas costs.
Market Leaders: 1inch and 0x
The aggregator space is dominated by two major players:
- 1inch (including its V1 and V2 iterations)
- 0x API and Matcha
This report analyzes over 810,000 historical transactions from these protocols to derive insights into their performance, strategies, and user base.
Key Findings from Transaction Analysis
1. Trading Pairs: Concentration and Fragmentation
- Approximately 33,000 unique trading pairs were observed across the three platforms (0x, 1inch V1, and 1inch V2).
- The top 1% of trading pairs (by volume) account for 40–60% of all transactions.
- These top pairs predominantly involve major assets like ETH, USDT, USDC, and DAI.
- There is significant overlap among popular pairs across aggregators, suggesting no single platform holds a strong pricing advantage for mainstream assets.
- Long-tail assets show high fragmentation—over 25,000 pairs appeared only once, indicating less frequent trading and more isolated liquidity.
2. Trade Size Distribution
- Trades involving ETH make up 64% of all transactions.
Trade sizes are mostly small to medium:
- 0x: Predominantly very small trades (<0.5 ETH)
- 1inch V1: Concentrated in 1–5 ETH and 150–500 ETH ranges
- 1inch V2: Similar to 0x, with a focus on smaller trades
This suggests 0x attracts retail users, while 1inch serves both retail and larger traders.
3. Routing and Splitting Behavior
Aggregators use two key techniques to improve pricing:
- Splitting: Breaking a large trade into smaller ones to reduce slippage. This increases gas costs but improves execution price.
- Routing: Using intermediate tokens (e.g., swapping A → C → B) to access deeper liquidity.
The data shows:
Splitting is rare:
- 0x: 5.8% of trades are split
- 1inch V1: 29%
- 1inch V2: 23%
Routing is common:
- 0x: 26% of trades use routes
- 1inch V1 and V2: Over 70%
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4. Gas Fee Analysis
Aggregators incur higher gas fees due to complex transaction paths. Key observations:
- Gas costs correlate strongly with the number of routes and splits.
- Each additional token in a route increases gas fees more than each additional split.
- During high network congestion (e.g., DeFi summer), gas fees became highly volatile.
5. DEX Utilization
Uniswap is the most frequently integrated DEX across all aggregators:
- It is consistently the top-called platform.
- SushiSwap and Curve are used less frequently.
- Curve, specializing in stablecoin swaps, is rarely called by aggregators—users likely trade directly on Curve for stablecoin pairs.
This indicates that while aggregators improve liquidity access, they don’t always outperform specialized DEXs for specific asset classes.
Frequently Asked Questions
What is a DEX aggregator?
A DEX aggregator is a platform that combines liquidity from multiple decentralized exchanges to provide users with the best possible trading rates. It uses algorithms to split and route orders efficiently.
Do aggregators always offer better prices?
Usually, but not always. For very common pairs or stablecoins, direct DEX trading may be cheaper due to lower gas fees. Always compare total cost (including gas) before trading.
Why do aggregators charge higher gas fees?
Complex routes and order splitting require more transactions, which increases gas costs. However, the improved exchange rate often offsets this fee.
Which aggregator is the best?
It depends. 1inch tends to serve larger trades and more diverse assets, while 0x is popular for small, mainstream asset trades. Always compare both in real-time.
Can I use aggregators for long-tail assets?
Yes, but liquidity may be limited. Aggregators like 1inch V2 support more exotic pairs, but execution may vary.
Are DEX aggregators safe?
They use audited smart contracts and are generally considered safe. However, always verify contract addresses and use trusted platforms.
Conclusion: The Role of Aggregators in DeFi
DEX aggregators play an essential role as an application layer on top of decentralized exchanges. They solve the liquidity fragmentation problem and improve trade execution for users.
While there are differences between platforms—like 1inch’s support for larger trades and more assets—both 0x and 1inch provide valuable services. Their algorithms are similarly effective for most common trading pairs.
As DeFi continues to evolve, aggregators will likely incorporate more sophisticated routing, cross-chain functionality, and gas optimization techniques. Their growth depends on continued innovation and deeper integration with emerging DEXs.
For now, users should choose aggregators based on their specific needs: trade size, asset type, and cost tolerance. And as always, verify rates and fees before executing any trade.