[1IP-75] Offboard low-volume chains from 1inch
Tags
DAO
Author
Outcome
Status
Done
Simple Summary
This proposal aims to offboard Fantom, Kaia, and Aurora from the 1inch protocol due to their relatively low volume and high operational costs.
Abstract
This proposal recommends offboarding the Fantom, Kaia, and Aurora chains from the 1inch protocol due to low volume and high operational costs. These chains exhibit limited DeFi activity and growth potential, making their continued support unsustainable. The offboarding will occur on the app.1inch.io UI and API licenses offered by 1inch Labs. This action aims to optimise resource allocation and reduce unnecessary expenses for the 1inch DAO. Gnosis chain activity will be reevaluated in Q4 2025.
Motivation
The 1inch DAO has undertaken a comprehensive four-month evaluation process to assess the long-term viability of supporting various blockchain networks within the 1inch protocol. This detailed assessment aimed to determine the sustainability of maintaining 1inch Fusion and Fusion+ infrastructure across different chains.
The evaluation criteria encompassed several key areas, each providing critical insights into the performance and potential of the supported networks:
- Analysis of Total Trading Volume: A fundamental aspect of the evaluation involved scrutinising the trading volume on each chain. This analysis included:
- All-time volume: This metric provided a historical perspective on the cumulative trading activity, indicating the overall adoption and usage of the 1inch protocol on each network.
- 30-day Fusion volume: Focusing on the more recent trading activity, specifically through the 1inch Fusion feature, this metric offered insights into the current level of engagement and utilisation on each chain. This allowed for the identification of chains with declining usage.
Fantom:
- All-time volume: $81,528,098.
- 30-day volume on Fusion: $2,528,072.
Gnosis:
- All-time volume: $1,234,093,111.
- 30-day volume on Fusion: $7,049,111.
Aurora:
- 30-day volume: $284.52K.
Kaia:
- 30-day volume: $4.21k.
Assessment of the DeFi Ecosystem
The health and vitality of the decentralised finance (DeFi) ecosystem on each chain were thoroughly examined. This included:
Fantom:
The DeFi ecosystem on Fantom experienced a significant decline following the 2022 market cycle and has struggled to recover. Data from Defillama indicates a current Total Value Locked (TVL) of approximately 55 million USD, with daily trading volumes ranging from 1 to 3 million USD. This suggests a weakening ecosystem with reduced activity.
Aurora:
Aurora, an EVM-compatible Layer 1 blockchain within the Near ecosystem, initially showed promise but has not achieved sustained growth. While the chain witnessed substantial trading volumes in early 2022, activity has diminished considerably.
Evaluation of Growth Potential
Each chain's long-term prospects and potential for future growth were carefully considered. This involved analysing factors such as:
Fantom:
The Fantom ecosystem is transitioning, including a significant migration and rebranding effort. The existing Fantom chain is being phased out in favour of a new product, indicating a shift in focus and potentially reduced support for the current infrastructure.
Kaia:
The Kaia chain resulted from the merger of the Finschia and Klaytn chains. Its strategic focus leans towards GameFi and account abstraction rather than DeFi. Kaia's Web3 hub strategy for the Asian market has not yet achieved widespread adoption and faces competition from established players with similar strategies.
Recommendation:
Based on above evaluation, DAOplomats recommend that the 1inch DAO offboard the following chains from the 1inch protocol:
- Fantom
- Kaia
- AuroraWhile the Gnosis chain also exhibits lower activity levels, it's growth potential and emerging DeFi ecosystem led the DAOplomats to recommend reassessing its performance in Q4 2025.
Specification
If this proposal passes, The DAO signals the 1inch Labs to offboard the selected chains from the app.1inch.io, API service and other uneconomical infrastructure related to 1inch protocol. No other service offered by 1inch will be mandated under the proposal, but 1inch Labs and other stake holders may conduct necessary measures to elevate operational sustainability of the said services.
Rationale
1inch, as a leading DEX aggregator, faces low resource utilisation on those chains due to the prevailing market conditions.
The high operational costs and the low revenue generated make it challenging to justify the continued support for these chains. This situation necessitates a strategic decision to optimise resource allocation and maintain the protocol's efficiency.
Considerations
The proposal only aims to offboard the abovementioned chains from the DAO-controlled infrastructure. This proposal doesn't seek to impact any API licences on the supported chain offered by 1inch Labs. A further analysis should be conducted on this.
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