0x, a decentralized exchange infrastructure company, announced the acquisition of rival flood, a movement that, according to the company, will help to compete on the hyper -competitive aggregation market.
Decentralized exchanges – or Dexs – are a cornerstone of the Defi Ecosystem. They have blockchain users exchange between assets without an intermediary or intermediary, such as a centralized exchange.
Aggregators such as 0X act as a one-stop shop for traders, and are looking for all DEXs to find the one who offers the most cost-efficient transactions, for a small fee. The competition is fierce and often exists on razor-thin margins.
It was Flood’s own aggregation software that motivated the acquisition, Amir Bandeali, CEO of 0X, told Coindesk in an exclusive interview.
0x uses his own trade simulation technology to check how well his aggregation software works compared to its competitors, said Bandeali. “We could also look at the flood and perform similar types of tests and we were very impressed by the data we saw.”
“Everything has been made all over,” Francesco Baccetti, co-founder and CEO of Flood, told Coindesk. “We have rewritten the entire pile to get this performance level that we have now.”
The acquisition is the first of 0X since the founding of the company in 2017. A spokesperson for 0x refused to share how much it paid for floods, with reference to contractual obligations. Flood raised $ 5.2 million from investors in a seed financing round in February 2024.
Dex -Aggregators are a large company. In the past week, the top 12 aggregators facilitated nearly $ 10 billion in swap volume, about 10% of all chains trade, collected by Fredrik Haga, co-founder of Dune Analytics.
Aggregators with tradable tokens are valued at a combined $ 2.3 billion, according to data from Coingecko.
0x is one of the oldest DEXAggregators. But it’s not the biggest.
On Ethereum and other compatible block chains, 1 inch and cows consistently treat the most trade volume among aggregators, while Jupiter dominates Solana.
Bandeali said he is hopeful that by combining the technologies of the two companies, 0x will be able to win market share of larger aggregators on both Ethereum and Solana.
‘NicheDomein’
Another motivation for the acquisition was the team of Flood developers.
“This is quite a niche domain,” Bandeali said, and explained that it is very difficult for his company to find talented developers who specialize in aggregation and trade routering.
Having the right developers is therefore crucial for the continuous success of an aggregator.
“It sounds simple, but it’s really complicated,” he said. “It becomes more complicated as new chains and new tokens launch.”
The reward for proving the best swaps is great. COW Swap will yield nearly $ 11 million in income this year, according to Defillama Data. (It is unclear how much income 1 inch earns, while Jupiter $ 162 million in income comes from more than just his aggregation services).
0x has also been extended to other areas, such as providing APIs that integrate his aggregator into other products and trade analyzes.
But improving its core aggregation product, which Swaps in apps such as Coinbase Wallet, Robinhood, Phantom and Farcaster, is still the most important focus.
And with Defi who becomes more complex on the day, the demand for aggregators will probably continue to increase.
“We just try to remove the complexity faster than this is made for our customers,” said Bandeali.
Read more: Dex Aggregator 1 Inch integrates ZKSync to stimulate cross-chain swaps
