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When investors try and sift through various exchanges with limited success, DEX aggregators rely on complex algorithms to take into account plenty of factors in selecting the best possible exchange rate for a given token swap.

DEX Aggregators

What is a DEX Aggregator?

Cryptocurrency exchanges are branched into two types; centralized and decentralized. DEX aggregators are used unified explorers for liquidity and prices offered by decentralized exchanges (DEXs). With the increasing rise in the adoption of cryptocurrencies and the growing use of decentralized exchanges, DEX aggregators have become a very popular service.

Decentralized exchanges offer differing prices, and it is not always too easy to find the best deal for the pair you are looking to trade. Not only that, but crypto investors are also starting to turn more and more to decentralized exchanges as they offer better security and a good fit with the innate characteristics of cryptocurrencies. However, with the booming interest in crypto, more and more DEXs launch on the market, and investors find themselves struggling to find the best possible pricing and liquidity. This is where DEX aggregators start to shine.
When investors try and sift through various exchanges with limited success, DEX aggregators rely on complex algorithms to take into account plenty of factors in selecting the best possible exchange rate for a given token swap.

The quickest way to understand what a DEX aggregator does is to compare it to a search engine. Imagine services like Google Maps, where you get aggregated information from numerous restaurants, and you can pick and choose which one is close to you and cheapest. DEX aggregators function in a similar way. They scan for data from a wide array of decentralized exchanges and facilitate trades in order to show you the best possible prices. Not only that, BUT DEX aggregators also complete many calculations and give users the option to make split trades as to achieve the best possible price on a swap.

In essence, crypto traders cannot accomplish this result by hand because DEX aggregators perform extremely complex calculations in a matter of seconds.

Since 2019, DEX aggregators have seen a rise in popularity. At the same time, the interest in decentralized finance (DeFi) has been booming. Cryptocurrencies and blockchain technology completely changed both personal and enterprise finance, and DEX aggregators allow investors to make informed decisions about their trades and coin swaps.

Written By

Petrache Ionut

May 28, 2022