In the fourth quarter of 2023, 1inch Network, a decentralized exchange (DEX) aggregator, experienced a significant increase in trading volume and market dominance amid a general market recovery. According to a Messari report, 1inch processed over $30 billion in trading volume, securing a 64% share of the Ethereum DEX aggregator market. The near doubling of external source volume suggests growing adoption of 1inch as a backend solution and expansion of aggregator platforms.
The growth in 1inch’s transactions is attributed mainly to new product offerings, although the aggregator protocol’s transactions declined throughout the quarter. The share of 1inch transactions on Uniswap V3 and V2 increased by 8 and 3 percentage points, respectively, accounting for 40% of transactions and 8% of the trading volume. The volume generated on these two Uniswap versions rose from $5.6 billion in Q3 to $10 billion in Q4.
1inch’s volume gains were primarily from Curve (CRV) and Dodo (DODO), the second and sixth most common application venues. PancakeSwap (CAKE) continued to capture over $1 billion in trading volume from 1inch for the second consecutive quarter, contributing to 7% of 1inch’s total volume in Q4.
Compared to its peers, 1inch saw a notable increase in volume, growing its market share from 59% in Q3 to 63% in Q4. CoW Swap was the only significant competitor to gain market share, holding 11% of the Ethereum aggregator volume throughout the quarter. ParaSwap and 0x maintained 11% and 10% of the aggregator volume, respectively.
During Q4, 1Inch DAO actively managed its strategic treasury by diversifying its stablecoin assets, swapping one million USD Coin (USDC) for Dai (DAI) and investing the funds as sDAI to earn interest. On the expenditure side, 1Inch DAO allocated over one million USDC across three transactions, including $890,000 for user support services within 1inch on December 30, 2023. Additionally, there was a 7% increase in the amount of 1INCH staked during the quarter. This rebound for 1inch as a DEX aggregator has raised expectations for a potential price increase for its native token 1INCH, which was trading at $0.4786, down 0.12% over the past 24 hours at the time of writing.