Is this the future of Crypto Trading? DeFiLlama DEX Aggregator Surpasses Metamask and Coinbases's Volume

DeFiLlama is a data analytics platform that has recently ventured into the decentralized finance (DeFi) world with its decentralized exchange (DEX) aggregator launch. The aggregator is an application that helps optimize transaction costs for swaps across various DEXs, including 1inch and Matcha. The aggregator is still in beta, but it has seen a surge in volume since its launch and has ranked as the second most used application on the 0x platform, aggregating liquidity across top DEXs. In the past 24 hours, the aggregator has even ranked ahead of platforms such as Metamask and Coinbase in volume.

What is DeFiLlama's DEX Aggregator?

DeFiLlama's DEX aggregator is a tool that allows users to obtain the best price on swaps across multiple DEXs. The aggregator queries the prices on various DEXs, including 1inch and Matcha, and then offers users the best price. The aggregator does not charge users fees and has integrations with most EVM-compatible chains. It also allows users to transact privately by routing transactions through its server, which does not store IP data.

Is DeFiLlama's DEX Aggregator Safe?

DeFiLlama's DEX aggregator uses the router contract of each aggregator, so it does not utilize any contracts developed by DeFiLlama. This means that users inherit the same level of security they would get by swapping directly through the chosen aggregator's user interface (UI) rather than DeFiLlama's UI.

“Impressive launch,” Eliézer Ndinga, director of research at 21.co, wrote on Twitter, noting that the aggregator had been launched without incentives including a liquidity mining program. “One thing is clear — users want a platform with data analytics, form their own opinions, and act on them with a click of a button.”

Liquidity mining programs

Liquidity mining programs are a way that decentralized exchanges (DEXs) incentivize users to provide liquidity, or assets, to the DEX's liquidity pools. By participating in these programs, users can earn rewards from the DEX's native token or other assets. These programs have become popular among DEXs over the past two years to attract users and increase liquidity on their platform.

However, some have criticized the liquidity mining model for not being sustainable in the long term. In its latest tokenomics revamp proposal, the DEX Sushiswap noted that this model might not lead to long-term growth and sustainability. Sushiswap argued that relying on liquidity mining as a primary source of revenue can lead to an over-reliance on incentives, which may not be sustainable in the long term.

DeFiLlama, a data analytics platform, took a different approach in its foray into decentralized finance (DeFi). Instead of immediately launching DeFi applications and relying on liquidity mining programs to attract users, DeFiLlama first grew its free-to-use data platform and built a solid user base. Then, once it had established itself as a trusted and widely used platform, DeFiLlama launched its DeFi applications, such as its DEX aggregator. This approach allows DeFiLlama to provide value to its users before asking them to participate in liquidity mining or other incentivized activities.

Will Users be Eligible for Aggregator Airdrops if They Swap Through DeFiLlama?

DeFiLlama's DEX aggregator executes swaps directly against the router of each aggregator, so there is no difference between a swap executed directly from an aggregator's UI and a swap executed from DeFiLlama. If any of the aggregators that DeFiLlama integrates with does an airdrop in the future, all swaps made through them would be eligible for the airdrop.

Does DeFiLlama Charge Any Fees?

DeFiLlama does not charge any fees on swaps. Therefore, users will receive the same price for a swap made through DeFiLlama as they would if they made it directly through the chosen aggregator. However, DeFiLlama does add its referral code to swaps, so for aggregators with revenue sharing, DeFiLlama will receive a portion of the fee they earn. This is not an additional fee, as users would be charged the same fee regardless, but a small portion of it is shared with DeFiLlama. DeFiLlama also integrates aggregators with no fee sharing; in these cases, it does not make any money.

In conclusion and to Summarize

DeFiLlama's DEX aggregator is a promising new tool that aims to optimize user transaction costs by aggregating prices from multiple DEXs. The aggregator is still in beta, but it has already seen a surge in volume and has ranked as the second most used application on the 0x platform. DeFiLlama's approach to DeFi is also noteworthy, as it first established itself as a trusted data analytics platform before launching DeFi applications. The aggregator offers users a way to privately transact by routing transactions through its server and does not charge any fees. It also allows users to be eligible for airdrops from the aggregators it integrates with.

Overall, DeFiLlama's DEX aggregator has the potential to be a valuable tool for users looking to obtain the best price on swaps across various DEXs.