Onchain trading takes place on multiple venues such as DEXs and aggregators. There is a clear evolution however, mostly facilitated by the innovation of products that aim to improve the UX for traders. We are going to take a look at where the trading actually is occurring, and if there is a difference between large VS. smaller marketcap assets in terms of which trading venue fills their trades.
Looking over the past two weeks alone, it’s clear that most volume still enters the trade through DEXs directly, followed by aggregators that are meant to provide the best deal by comparing pricings among various DEXs. Telegram trading bots and intent-based trading services are relatively new to the market but already taking a noticeable share of the overall trading venues.
One new contender that has gained much traction recently is Telegram trading bots such as UniBot or Maestro. Faster execution, advanced features, integrated into a platform that’s already well adopted among crypto community, coupled with the on-chain PvP narrative, trading bots have all the right ingredients to acquire active on-chain retail traders in the UX department, and the data seems to support this theory: more trades have been made through Telegram trading bots than aggregators.
Meanwhile, intent-based trading services actually have existed for a while, e.g. 1inch Fusion, Hashflow, CowSwap, etc. and also the recently released Uniswap X. Essentially, such services are RFQs and involves a network of “solvers / resolvers / matcher / …” to conduct an auction for a request, the one that provides the best quote wins the order. Traders benefit from intent-based services by having a “guaranteed” outcome. Solvers’ job is to source the best price across different venues for the trader. Sometimes, solvers themselves can provide the inventory directly, meaning that the trade can be completed without ever touching the DEX liquidity.
Even though the overall volume is passing through different venues, what about specific asset classes, especially liquid assets? Let’s take a look at wstETH as an example.
Over the past two weeks, an overwhelming majority of the wstETH volume goes through aggregators and DEXs. Interestingly, on some days aggregators capture majority of the volume while on others DEXs capture the majority, we are unsure of why this is the case.
Intent-based services are also having a noticeable share and sometimes even facilitate more wstETH volume than DEXs.
Telegram trading bots basically have no business in this realm, which makes sense since they are normally designed for sniping or actively trading long tail assets.
Another trading venue that often gets neglected is in-wallet swaps. As the data indicates, though it does have a presence in both overall market and highly liquid assets, the general usage of such service is relatively low, regardless of the asset class. This may be due to the market environment that we are currently in, as in wallet trading takes a large fee cut and the more crypto native users don't use them.
In conclusion, it is interesting to see that even though crypto is extremely quiet, new trading venues and sources are being adopted for both large and small marketcap tokens. It will be interesting to see what happens in the near future once UniswapX becomes natively integrated into the Uniswap frontend. Time will also tell whether telegram bots are a fad or they will continue capturing more market share.