State of 1inch Q4 2024

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Key Insights

  • In November, Fusion+, a cross-chain atomic swap solution using Hashed Timelock Contracts (HTLCs) and a Dutch auction model for improved security and efficiency, came out of beta and was made fully available for all 1inch users in 1inch Swap and 1inch Wallet.
  • Total daily average volume increased 42% QoQ from $350.9 million to $497.8 million. This increase was driven largely by the Aggregation protocol and Limit Order protocol, whose daily average volume grew 37% to $369.7 million and 52% to $132.9 million QoQ respectively.
  • 1inch expanded its ecosystem reach with partnerships and integrations, including Bitget Wallet, and Fluid DEX, and released Wallet Bundles, allowing users to group and track up to 10 wallets together.
  • In its first full quarter of availability, Fusion+ averaged $599.6k in daily volume, 96 daily active addresses, and 139 daily orders.
  • 1INCH’s circulating market cap increased 51% QoQ from $353.3 million to $534.7 million, outpacing the combined market capitalization of BTC, ETH, and SOL, which increased by 44%.

Primer

1inch (1INCH) is a decentralized finance (DeFi) DEX aggregator and intent-order protocol operating on Ethereum, Arbitrum, Optimism, Polygon, Base, zkSync Era, Avalanche, BNB Chain, Gnosis, Fantom, Kaia, and Aurora. Core protocols and technologies include the Aggregation Protocol (DEX aggregation), Limit Order Protocol (limit orders), Fusion mode (intent-based single-chain swaps), and Fusion+ (cross-chain swaps).

The 1inch team has built a suite of products that integrate these protocols and technologies for both DeFi users and developers. With the 1inch Swap web application, users can connect a wallet to swap tokens across networks supported by 1inch and place offchain limit orders. 1inch Wallet mobile application users can do the same while using the wallet to manage EVM-compatible assets and explore Web3. Additionally, 1inch Portfolio provides a dashboard for wallet and asset tracking, while the 1inch Developer Portal SaaS platform enables developers to build on top of 1inch’s APIs.

1inch is governed by the 1inch DAO using the network’s native 1INCH token.

Note: This report includes data from Ethereum, BNB Chain, Polygon, Base, Optimism, Arbitrum, Avalanche, Gnosis Chain, Fantom, and zkSync. Data from Kaia, and Aurora are currently not included.

Website / X (Twitter) / Telegram

Key Metrics

Protocol Analysis

Aggregation Protocol

As the leading DEX aggregator for most EVM-based Layer-1 chains and Layer-2 rollups, 1inch’s trading volumes are largely correlated with overall market volume. According to DefiLlama, DEX volumes more than doubled in Q4, up 104% QoQ from $493.5 billion to $1.09 trillion.

Of 1inch’s three protocols, the Aggregation Protocol is responsible for the majority of volume routed through 1inch. In Q4, daily average volume on the Aggregation Protocol increased 37% QoQ from $269.7 million to $369.7 million

By chain, Ethereum still represented the majority (66%) of volume on the Aggregation Protocol. Base was the second largest chain by volume in Q4 (11%), flipping Arbitrum, whose market share declined from 14% to 10% QoQ as daily average volume fell by $1 million QoQ to $38 million. Combined, these three chains accounted for 87% of the volume on the Aggregation Protocol.

Notably, the Aggregation Protocol’s highest volume day occurred on December 5, a highly volatile trading day with nearly $1 billion in liquidations in crypto markets as Bitcoin crossed $100,000 for the first time and reached an all-time high of more than $104,000 before crashing to nearly $90,000 that same day.

In Q4, execution destination concentration on the Aggregation Protocol remained largely unchanged. Last quarter, 57% of all volume was routed through Uniswap V2/V3 and Curve, as opposed to 56% in Q4. Fluid, which launched on Oct. 29, gained the most market share in Q4 finishing the quarter with the sixth-highest daily average volume. Of DEX’s launched prior to Q4, Maverick’s market share increased the most (+420% QoQ), followed by Uniswap V2 (+33.65% QoQ). In contrast, Uniswap V3, Curve, PancakeSwap, and DEXs collectively measured in the Other category all lost market share in the fourth quarter.

Daily average transactions on the Aggregation Protocol increased by 21% QoQ from 114,700 to 138,900. By chain, Base averaged the most daily transactions at 47,300 (+24% QoQ). BNB Smart Chain grew its average daily transaction count the most QoQ (+43% to 30,200) as it surpassed Ethereum to average the second most daily transactions by chain in Q4. Daily average transactions on Ethereum increased 14% QoQ from 23,200 to 26,400, as gas fees on the network have continued to decrease since EIP-4844 was implemented in March, making it more affordable for smaller trade sizes.

Daily average active addresses on the Aggregation Protocol increased 25% QoQ from 53,000 to 66,100. BNB Smart Chain averaged the most daily active addresses of any deployment at 18,670 (+38% QoQ). With Aggregation Protocol volumes relatively low on BNB Smart Chain (daily average of $15.2 million in Q4), most active addresses on BNB Smart Chain were likely smaller retail users. All deployments of the Aggregation Protocol except Arbitrum saw an increase in active addresses in the fourth quarter.

Limit Order Protocol

Daily average volume on the Limit Order Protocol increased 52% QoQ from $87.7 million to $132.9 million. In contrast to the Aggregation Protocol, which recorded its highest volume day in Q4 on December 5, the Limit Order Protocol saw its highest volume day on Dec. 30, with $447 million in volume. 98% of Limit Order Protocol volume on that day came from Ethereum, which is notable given Ethereum averaged 87% of all Limit Order Protocol volume in the fourth quarter.

Daily average volume on the Ethereum deployment increased by 53% QoQ from $75.5 million to $116 million. All other deployments (except Fantom within the ‘Other’ category) also experienced a QoQ increase. Notably, Base saw the largest increase (+303%), with daily average volume up from $720,000 to $3.4 million QoQ. As Ethereum progresses through its L2-centric scaling roadmap, 1inch should expect trading volumes to shift from its Ethereum deployment to its L2 deployments.

Daily average orders on the Limit Order Protocol increased 16% QoQ from 7,600 to 8,700. This increase was primarily due to a 78% QoQ increase in daily average orders on Base from 700 to 1,200. Additionally, Base’s share of orders on the Limit Order Protocol increased by 54% QoQ from 9% to 14%. Notably, the daily average size of a Limit Order Protocol transaction on Base increased 127% QoQ from $1,050 to $2,400, implying Base is absorbing trading activity from users with larger trading sizes from other chains.

Daily average orders on the Limit Order Protocol increased 26% QoQ from 2,750 to 3,500. Each deployment of the Limit Order Protocol had a QoQ increase in daily average active addresses, except Arbitrum, which had a decline of 8% QoQ.

Fusion Mode

Fusion mode routes volume through both the Aggregation Protocol and Limit Order Protocol, in addition to external sources. The daily average volume associated with Fusion mode increased 26% QoQ from $61.8 million to $77.8 million. The vast majority of volume (84% of all volume in Q4) occurred on Ethereum. Daily average volume on the Ethereum deployment increased by 24% QoQ from $52.5 million to $65.4 million. The biggest gainer in percentage terms was Base, which saw its daily average volume increase by 262% QoQ from $630,000 to $2.3 million. All other deployments except Fantom had a QoQ increase in Fusion volume.

Resolvers are approved registered addresses that compete via a Dutch auction mechanism to fulfill 1inch Fusion and Fusion+ orders. In the fourth quarter, 1inch Labs flipped Flowmatic, a resolver that went live in the third quarter, to have the second-highest Fusion protocol volume share, as it grew 31% QoQ from 15.6% to 20.4%. Rizzolver maintained the top spot in Q4, accounting for 28% of the volume executed through Fusion. Together, the top three resolvers (Rizzolver, 1inch Labs, and Flowmatic), accounted for two-thirds of the volume executed through Fusion.

While not as large of an increase as volume (+26% QoQ), daily average orders through Fusion mode increased by 9% QoQ from 4,800 to 5,200. The Base deployment accounted for the majority of the increase as daily average orders through Fusion mode increased 71% QoQ from 600 to 1,050. Combined, Ethereum and Base accounted for 51% of Fusion mode orders in the fourth quarter. Other notable changes in daily average orders by chain in Q4 include BNB Smart Chain (+24.3% QoQ to 400) and Arbitrum (-33% QoQ to 750).

Fusion+ Mode

Fusion+ enables cross-chain atomic swaps on networks supported by 1inch, building upon the 1inch Fusion and Limit Order protocols. Following its beta release in September, Fusion+ had $599,600 in daily average volume in the fourth quarter and averaged 96 daily active addresses and 139 daily orders.

Market Analysis

Market Cap and Staking

1INCH’s circulating market cap increased 51% QoQ from $353.3 million to $534.7 million, outpacing the combined market capitalization of BTC, ETH, and SOL, which increased by 44%. On an annualized basis, 1INCH’s circulating market cap is up 11%. In contrast, the total amount of 1INCH staked was essentially flat QoQ at 264.7 million. Staking 1INCH gives Unicorn Power (UP), which can be used to vote in governance and delegate to resolvers. Staking and delegating to resolvers create an important value accrual pathway for the token: resolvers give 1INCH rewards to attract delegates so the resolvers can compete in completing Fusion transactions.

Treasury

The 1inch DAO continues to be mindful of spending while still allocating to growth opportunities for all 1inch users and participants. In Q4, the DAO approved five new payments totaling $342,000:

  • [1IP-72] Engagement of New Legal Counsel for 1inch DAO (Jan. 9, 2025) – This proposal approved MME Legal AG as 1inch DAO’s new legal counsel, granted the firm power of attorney to represent 1inch DAO, and approved an initial advance payment to MME Legal AG of 50,000 USDC.
  • [1IP-66] Transition to Fusion+ for the Alternative Modular Interface of 1inch (Nov. 19, 2024) – This proposal approved funding for implementation of Fusion+ in the 1inch interface for gasless cross-chain swaps, security measures to protect against phishing attacks, and development of configurations for automatic library releases.
  • [1IP-65] P2P Network: Grant Request for POC (Nov. 12, 2024) – This proposal approved funding to Boosty Labs for implementation of the 1inch P2P network POC, a decentralized private API gateway to support Web3 developers and enhance dApps functionality.
  • [1IP-64] P2P Network: Grant Request for POC (Oct. 15, 2024) – This proposal approved funding to ZeroPool to introduce zkDA rollup technology that would enhance 1inch’s censorship resistance and frontend availability.
  • [1IP-63] P2P Network: Grant Request for POC (Oct. 15, 2024) – This proposal approved funding to The Grand Timeline project to develop a comprehensive visual timeline of blockchain and Web3 history.

Outside of these disbursements, treasury allocations did not change, and the DAO continues to benefit from interest earned on $1.1 million in aETHUSDC and $1.1 million in Savings DAI (sDAI) held. At Q4 end, the treasury was valued at $14.1 million, up 8% QoQ from $13 million.

Market Share

1inch has historically been the top DEX aggregator by volume within the Ethereum Virtual Machine (EVM) ecosystem. In Q4’24 this trend continued as 1inch accounted for 38.2% of all DEX volume routed through an aggregator on chains 1inch is deployed on. However, 1inch’s market share fell 10% QoQ, mainly due to Odos’s and CoWSwap’s increasing market share. Odos accounted for 17% of the market, an increase of 25% QoQ while CowSwap’s market share increased to 16.2% (+33% QoQ). Combined, the top three aggregators (1inch, Odos, and CoWSwap) accounted for 71.4% of volume.

Similarly to volume, 1inch has also historically been the top aggregator by users within the EVM ecosystem. While 1inch maintained a plurality of user market share in Q4, its market share fell from 42.3% to 40.7% (-3.8% QoQ). ZeroEX (22.1%) and OpenOcean (9.5%) had the biggest gains in user market share, increasing by 40.2% and 18.3% QoQ, respectively.

Qualitative Analysis

Fusion+

On Nov. 25, Fusion+, 1inch’s solution for cross-chain atomic swaps, came out of beta and was made fully available for all 1inch users in 1inch Swap and 1inch Wallet. The beta version of Fusion+ previously went live on Sept. 18 on all chains supported by 1inch. Prior to that, in early September, 1inch unveiled its whitepaper for Fusion+.

Fusion+ uses an intent-based model, where users submit trade intents that solvers can fulfill, rather than conducting instant transactions. The protocol employs a Dutch auction mechanism, in which the price gradually decreases until it becomes favorable enough for a solver to fulfill the trade. Under this design, users sign offchain orders without paying gas fees in native tokens.

A critical component of Fusion+ is its use of Hashed Timelock Contracts (HTLCs) to facilitate trustless and secure cross-chain transactions. HTLCs allow trades to be executed only when specific cryptographic conditions are met, such as revealing a pre-agreed hash within a set timeframe. If these conditions are not met, the assets are returned to their original owners, preventing loss due to incomplete transactions. Fusion+ also allows for partial fills, where solvers can complete a portion of the trade if full liquidity isn’t immediately available. The 1inch DAO oversees parameters for the Fusion+ protocol, including settings like auction configurations, resolver participation rules, and minimum trade requirements. In October, a presentation on Fusion+ was made at TOKEN2049 fully explaining its cross-chain swap architecture.

Integrations, Partnerships, Upgrades, & More

1inch has made significant strides in expanding its ecosystem and enhancing its utility through a series of strategic integrations, partnerships, and upgrades:

  • Bitget Wallet Integration (Oct. 16) – Bitget Wallet integrated 1inch as an aggregator to enhance its swap functionality while 1inch integrated Bitget Wallet as a wallet connect option when signing in to the 1inch application.
  • Bruce Lee Family Company Partnership (Oct. 28) – 1inch announced a long-term partnership agreement with the Bruce Lee Fmaily Company to promote 1inch.
  • Fluid DEX Integration (Nov. 5) – Fluid DEX integrated 1inch aggregators, enabling trades on 1inch to be routed through its Liquidity Layer.
  • 1inch Chief Compiance Officer Appointment (Nov. 4) – 1inch appointed Hedi Navazan as 1inch Group’s new Chief Compliance Officer.
  • WalletConnect Certification (Nov. 21) – 1inch Wallet obtained official certification from WalletConnect, an open-source protocol to securely connect crypto wallets to applications.
  • Wallet Bundles (Dec. 11) – Wallet bundles were released in 1inch Portfolio, 1inch’s unified Web3 asset performance tracking tool, allowing users to group and track up to 10 wallets together. Predefined bundles are also available that track top-performing funds as well as well-known DAO and project wallets.
  • Talos Integration (Dec. 18) – 1inch integrated with Talos, a digital asset trading and portfolio technology provider for institutions. Thereafter, Talos integrated 1inch’s Swap API with their institutional portfolio and trading technology for digital assets.
  • 1inch Portfolio Integration (Dec. 26) – 1inch Portfolio, 1inch’s unified Web3 asset performance tracking tool, was made accessible inside the 1inch dApp.
  • Qubetics Wallet Integration (Jan. 21) – Qubetics Wallet integrated 1inch.

Additionally, 1inch experienced two separate security incidents:

  • Supply Chain Attack (Oct. 30) – A third-party UI animations library (@lottiefiles/lottie-player) used by the 1inch dApp was compromised, allowing the attacker to request permission from wallets that used the 1inch dApp to transfer tokens. To resolve the attack, the 1inch team rolled back to a verified safe version of the library. Notably, 1inch’s protocols, wallet, and APIs were not affected. Moreover, 1inch posted to “X” that “All confirmed losses are subject for refunds.”
  • 1inch Labs Resolver Private Key Breach (Dec. 9) – An attacker gained access to a private key of the owner of the 1inch Labs resolver contract and subsequently “transferred funds from the 1inch resolver.” Following the incident, the 1inch team revoked access for the compromised key, transitioned to a multi-sig wallet for greater security, and conducted an audit of all deployed contracts. No user funds were lost as all 1inch protocols are non-custodial.

Closing Summary

In Q4, 1inch saw substantial growth, as total daily average volume increased 42% QoQ from $350.9 million to $497.8 million. This increase was driven largely by the Aggregation protocol and Limit Order protocol, whose daily average volume grew 37% to $369.7 million and 52% to $132.9 million QoQ respectively. These increases measured across all chains are approximate to the percentage increase in daily average volume on Ethereum on both the Aggregation protocol (+37.5%), where it has a 66% market share, and Limit Order Protocol (+53%), where it has a 87% market share. Behind Ethereum, its L2 networks had mixed results. Base continued to ascend, finishing second behind Ethereum in daily average volume on the Aggregation protocol (+57% QoQ), while Arbitrum stalled (-3% QoQ), and was the only chain to not increase QoQ.

Key upgrades and new features were also released in Q4 to improve the protocol’s functionality and user experience. In November, Fusion+, 1inch’s cross-chain atomic swap solution, came out of beta and was made fully available for all 1inch users in the 1inch Wallet and application. 1inch also released Wallet Bundles, allowing users to group and track up to 10 wallets together, and expanded its ecosystem reach with partnerships and integrations, including Bitget Wallet, and Fluid DEX.

As 1inch moves into its sixth year of operation, it will look to continue to capitalize on ongoing technological developments and feature improvements for sustained growth in 2025.

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