What is the difference between an aggregator and a protocol? Why did OKX become the scapegoat?

In the complex ecosystem of cryptocurrencies, aggregators and protocols play completely different but closely related roles. Understanding the differences between them is crucial to analyzing why OKX has become the "burden" in recent events.

Aggregator, taking OKX DEX as an example, is essentially a tool to provide users with liquidity integration services. Since DeFi Summer in 2020, the DeFi market has flourished, but with it, there are problems such as dispersed liquidity and inefficient trading. The appearance of the polymerizer is like a timely rain, cleverly solving these pain points. By integrating the liquidity of multiple decentralized exchanges (DEXs), it allows users to obtain quotes from different protocols on one interface, thereby enabling transactions at better prices. This service model is like a supermarket, displaying products from different suppliers in a concentrated manner, and consumers can easily compare and choose the most cost-effective purchase plan.

As an aggregator, its operating mechanism involves complex processes such as order dismantling, routing, and Gas cost optimization. When a user initiates a transaction on OKX DEX, the system will intelligently split the order and select the optimal trading path based on the liquidity and price of each DEX, while minimizing the Gas fees required for the transaction as much as possible. This process is like intelligent scheduling in logistics distribution. By reasonably planning the route, it ensures that the goods can be delivered to the destination efficiently and at low cost.

Unlike aggregators, DeFi protocols such as Uniswap and Pancake are basic applications built on blockchain. They are the cornerstone of the cryptocurrency ecosystem, directly providing users with core services such as asset exchange, lending, and liquidity mining. These protocols have their own independent smart contracts and operating rules. Users conduct transactions directly on the protocol, and asset transfers and smart contract execution are all completed within the framework of the protocol itself. For example, Uniswap is based on the Ethereum blockchain and uses the automatic market maker (AMM) mechanism to allow users to exchange crypto assets without the need for traditional order books. The transaction process is completely driven by smart contracts without the intervention of third parties.

Protocols play a role similar to real estate developers in the cryptocurrency ecosystem. They build "buildings" with different functions to attract users to use and interact. Each protocol has its own unique value proposition and target user group, which together form a colorful DeFi ecosystem.

Recently, OKX was pushed to the forefront in a scrutiny of European cryptocurrency regulators, and even by Bybit accused hackers of using its platform to clean up stolen money. The reason behind this is closely related to the characteristics of the aggregator and protocol.

From a technical perspective, the complexity of on-chain tracking data is an important factor in the misunderstanding of OKX. When hackers conduct fund obfuscation operations, their methods are extremely complex and efficient. They may split a small amount of funds into massive transactions in a short period of time and operate frequently on multiple chains to cover up the flow of funds. Since OKX DEX acts as an aggregator, it plays a role in integrating and forwarding transaction requests during the transaction process. When analysts track the hacker's transaction path, on-chain tools often can only show that funds pass through the OKX Web3 proxy, and cannot accurately trace back to the specific DEX protocol that actually executes the transaction. This is like in a complex maze, where the tracker can only see the sign of a certain transit station, but it is difficult to distinguish the subsequent branch paths, which leads to mistakenly considering OKX DEX as the final destination of funds.

At the regulatory level, the crypto bill system in the EU region is not yet perfect, and regulators have limited understanding of technical details of relatively emerging on-chain business such as aggregators. The operational model of the aggregator is very different from the traditional financial regulatory objects. It involves the interaction of multiple protocols and complex technical processes, which puts regulators in huge challenges in assessing risks and compliance. In this case, once negative events related to cryptocurrencies occur, such as hacker money laundering, regulators may point their finger at the more well-known OKX DEX based on existing limited perceptions and on-chain data presentation.

From the perspective of public opinion, some media and the public lack an in-depth understanding of the division of labor in the cryptocurrency ecosystem. When reporting related events, it is often a tendency to simplify complex technical and business logic, and blame problems on well-known platforms that are easy to identify. As an important participant in the industry, OKX is naturally more likely to become the focus of attention, and has been pushed to the position of "take the blame" without sufficient investigation and accurate interpretation.