In blockchain, a decentralised exchange (DEX) aggregator refers to a platform or service that simultaneously sources from multiple DEXs in order to achieve the best possible trading prices and liquidity for a trader’s transactions. DEX aggregators play a crucial role in enhancing the efficiency and accessibility of DEXs, making it easier for users to trade cryptocurrencies in a decentralised manner while achieving the best possible outcomes.
The DEX aggregator collects data from various DEXs, which includes information about available trading pairs, liquidity, order books, and prices. The aggregator compares the prices and liquidity across different DEXs for a particular trading pair, analyses factors like slippage, and tracks trading fees.
Once the best possible trading option is determined, the aggregator routes the trade that offers the most favourable terms to the DEX at that moment. This routing can happen automatically through smart contracts or manual execution by the user. Once the trade is executed on the selected DEX, the user receives the desired cryptocurrency tokens at the best available price.
