Aggregation Theory by Ben Thompson describes how the internet changed value capture in business. Before the internet, the hardest and most expensive part of building a consumer-facing business was distribution: actually reaching the consumer. The internet changed this, commoditising distribution and making it 0 marginal cost, allowing suppliers to build direct relationships with consumers. As a result of this cheap distribution, consumers faced abundance of choice and needed a way to filter and interact with this choice. Aggregators such as Google, Facebook and Amazon stepped in to serve this role, possessing a direct relationship with consumers, aggregating modularised suppliers and thus facing 0 marginal costs for serving new users.
We are seeing a similar dynamic occur with DEXes. While initially users interacted with their favourite DEX directly, aggregators such as 1inchexchange, DEX.AG and others have emerged allowing users to get best execution on trades across all active DEXes. Volumes have exploded:
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