Decentralized Exchange Aggregators Explained

This covers decentralized exchange aggregators. They bring cryptocurrency trades from many different sources onto one platform. They are linking wide ranging liquidity pools together across the DeFi world. Learn more:

https://cryptojbro.com/dex-aggregators-explained/
https://cryptojbro.com/dex-aggregator-list/
https://youtu.be/uCfdFYQ-Gv8

2. What are DEX Aggregators?
Aggregators are platforms that collect cryptocurrency
trades from many decentralized (and centralized)
exchanges across different blockchains. They claim to
show the best prices and lowest fees in one place.
They bring in liquidity pools and raise the number of
pairs for traders without needing multiple DEXs. A
host of different wallets are supported on these
platforms.

3. Problems Aggregators Solve
Liquidity pools and order books for finding trades
have been scattered. Even one decentralized network
or blockchain can have multiple DEXs with their own
pool of assets that are not connected. Aggregators
bring these connections to one site and even allow
swaps between separate networks.

4. Types of Aggregators
On-Chain: written with smart contracts, public is able
to view them (open and transparent). Atomic swaps
are possible (either swap or cancel).
Off-Chain: controlled by a central authority, code is
private, impossible to say if trustworthy. Front running
may be possible.

5. EVM vs non-EVM Aggregators
Aggregators are expanding in number around
Ethereum and Ethereum Virtual Machine (EVM)
compatible chains such as Arbitrum, Optimism,
Fantom, and Avalanche C-Chain since they are easy
to connect (Solidity language). Other chains are
working to bridge between EVM and non-EVM such as
Aurora on Near, Moonbeam on Polkadot and Kava on
Cosmos.

6. Feature: Split Orders, Lower Gas
Some aggregators such as 1Inch can take one trade
and split it up through various routes and exchanges
to provide the best price and gas fees. This is an
amazing routing feature that is becoming more
common. I see this evolving to different use cases as
well (tokenized real world assets).

7. Top 5 DEX Aggregators
1.1Inch: https://app.1inch.io/
2.Matcha: https://matcha.xyz/
3.Paraswap: https://app.paraswap.io/
4.Rango: https://app.rango.exchange/swap/
5.Open Ocean:
https://app.openocean.finance/

8. Aggregator Tokens
Some of these platforms have their own
cryptocurrency tokens too. They might be used for
governance, base pairs for trading, consensus /
staking, or yield farming. These coins can be a niche
for you to research and invest on their own. Example:
1INCH, go research new ones!

9. Challenges for Aggregators
Decentralized networks / blockchains are written in
different code languages, have different consensus,
and ways of making trades. Some might use order
books and others use automated market makers
(AMMs). The difficulty has been getting them to pass
information to each other quickly and safely. All of
this is improving every day through developer
innovation.

10. Caution about Aggregators
These are a new type of trading platform. They are in
their early stages of development and have not
existed long (as of 2024). Many hacks and bugs
become possible with complex smart contracts. Make
sure their code has been audited before using. Only
trade what you are willing to lose. Start with small
amounts. Don't be too trusting and do your research
on recent hacks.

11. Studying DEX Aggregators
●https://cryptojbro.com/dex-aggregators-explained
●https://cryptojbro.com/dex-aggregator-list
●https://defiprime.com/exchanges#aggregators
●https://coingape.com/dex-aggregators/
●https://defillama.com/aggregators

Links are in description!

12. These aren't Interoperability
Protocols
Interoperability protocols pass messages between
various decentralized networks. They allow for
different DApps on blockchains to work together. They
can be a layer that DEX aggregators work on top of,
but they allow for broader uses in addition to trading
and swapping.
Example: Layer Zero - https://layerzero.network/

13. Choosing / Using an Aggregator
They have to connect to the chains and tokens that
you want to trade! Use a hardware wallet for better
security. Check to see if there have been recent hacks
to wallets and the aggregator platform or protocol.
Start out trading a very small amount to see if it
works, how long it takes, the fees, etc.

14. The Future of Aggregators
These protocols and aggregators evolve. There will be
wider pools of liquidity available to traders. More
assets such as stablecoins, stocks, bonds, funds, and
property will be represented on chain. I see the future
as one big decentralized liquidity pool with many
access points, low fees and fast trades.
Interoperability and payments between major
networks will be secure and quick.

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