Aggregation Strategies in DeFi: From Price Discovery to Market Dominance

In November 2023, Blackstone Group acquired a pet care app called Rover. Rover integrated decentralized pet care services into a searchable marketplace, adding review and payment features, becoming the default platform in the field. By the time Blackstone privatized it in 2024, Rover had become the central hub for pet care services.

ZipRecruiter has done something similar in the recruitment field. It aggregates job information and distributes it to multiple channels, becoming a one-stop distribution channel for employers and a unified entry point for job seekers. ZipRecruiter does not own companies or positions, but rather controls the relationships with both parties.

This model is known as "Shelf Ownership" or "Aggregation Theory": concentrating decentralized supply, controlling its display, and charging for access. The core is to establish a direct relationship with end users, allowing suppliers to compete to serve them.

The Amazon flywheel is a classic interpretation of this concept: more choices lead to better customer experiences, attracting more traffic and sellers, reducing costs, offering lower prices, and ultimately bringing more choices. Once this self-reinforcing loop is set in motion, it becomes difficult to stop.

The aggregation model is most effective under two conditions: the aggregated content has value, and the suppliers find it difficult to exit easily. If either is missing, the moat will become shallow. eBay began to decline after losing unique sellers.

In the fields of finance and Decentralized Finance, deep liquidity is key. It makes trading cheaper, borrowing safer, and derivatives possible. Once established, liquidity tends to persist. This is why protocols like Aave thrive.

Jupiter has demonstrated the evolution from a price discovery tool to a liquidity platform on Solana. It started with finding the best spot prices and gradually became the default routing for liquidity on Solana, then expanded to attract new liquidity products.

Aggregation can be divided into three levels:

1. Price Discovery: Telling people where the best trades are.
2. Execution: Operate the transaction on behalf of the user
3. Distribution Control: Become the Market Entry

Jupiter successfully climbed these three levels on Solana, ultimately controlling liquidity distribution. It further expanded its reach through acquisition strategies, acquiring teams that have dominated targeted market segments.

Two dominant models are emerging in DeFi: Jupiter focuses on distribution and user relationships, while Hyperliquid focuses on controlling liquidity itself. Both models bet on scale, but start from opposite points.

In the future, applications may resemble true platforms more than the underlying public chains. They possess user relationships, embed into daily habits, and strengthen their position through acquisitions or integrations with other applications. This raises larger questions about value flow and the prospects of fat protocols.