DEX Aggregators, also known as Crypto Liquidity Providers, have exploded as a successful crypto trading exchange to create higher execution process on trades than a single DeFi Exchange. Not only do they provide a better price, they do not require you to place your crypto in their exchange, instead they trade through your crypto wallet.
DEX Aggregators are among the latest advancement in the burgeoning DeFi market, providing traders with access to deep liquidity and better pricing.
While everyone else had an unexpectedly awful year in 2020, the decentralized finance (DeFi) market had a fantastic year. Not only has money been poured into DeFi protocols, but also innovations to improve the cryptocurrency trading experience have emerged. One of these innovations is DEX aggregators.
What Are DEX Aggregators?
DEX is an abbreviation for decentralized exchange, which is a cryptocurrency trading platform based on blockchain technology that enables users to keep control of their funds while exchanging one token for another.
Decentralized exchanges (DEXs) offer greater privacy and security than their centralized counterparts, which has resulted in a significant rise in activity in recent years.
The most notable decentralized trading platform is Uniswap, which works on the Ethereum network that enables crypto traders to convert ERC20 tokens directly through their Ethereum wallets via a user-friendly web-based interface.
The problem with decentralized exchanges is that most of them lack liquidity, especially for smaller tokens, finding it challenging to enter and exit larger positions without significant slippage.
DEX aggregators were created to address this issue.
DEX aggregators are financial protocols that enable cryptocurrency traders to access a range of trading pools from a single dashboard.
For example, if you want to buy LCX on the Ethereum blockchain using ETH, you can use DeFi terminal Aka fire salamander, an Ethereum-based DEX aggregator.
You enter the cryptocurrency trading pair you would like to convert into the trading application. The liquidity aggregator then uncovers the best possible price for you to execute your order across all available platforms.
While the currently available DEX aggregators differ in some ways, they all have a user-friendly interface that needs you to connect your wallet and perform a single trade on a web-based application.
Why Traders Like DEX Aggregators
DEX aggregators, also recognized as liquidity aggregators, offer a number of advantages that have made them very famous among active traders. In fact, DEX aggregators have become so popular that they accounted for roughly 20% of decentralized trading volumes by mid-2020.
So let’s take a look at the advantages of liquidity aggregators.
1- DEX aggregators offer a larger pool of liquidity to traders who wish to trade huge amounts of digital tokens.
If you want to convert a significant position in a currently issued token into a stablecoin, for instance, due to a lack of liquidity, you may find it difficult to do so on just one decentralized exchange. Nevertheless, if you utilize a liquidity aggregator, you are much more likely to find the liquidity you require to exit your token position without incurring excessive slippage.
2- A DEX aggregator will typically provide a better execution price than a single DEX. Aggregators are designed to help traders fill trades at the highest possible level across a variety of liquidity pools. As a result, for price-sensitive investors or traders, using a liquidity aggregator rather than a single decentralized trading platform makes sense.
3- DEX aggregators, like “traditional” decentralized exchanges, add a layer of privacy to crypto trading that centralized exchanges do not provide.
In contrast to centralized exchanges, which typically require users to complete a KYC onboarding procedure, everyone with a crypto wallet and an internet connection can sign up onto a liquidity aggregator online and exchange one digital asset for another. There will be no need for ID verification, and no paperwork will be required.
4- DEX aggregators are normally non-custodial exchange platforms, which also means traders retain complete control over their funds.
Unlike centralized exchanges, which require you to deposit coins and thus give up your private keys for the duration of their storage on the platform, liquidity aggregators permit you to trade directly from and to your crypto wallet.
5- Finally, liquidity aggregators enhance the decentralized trading experience by providing user-friendly dashboards where a few clicks are all that is required to trade millions of digital tokens in seconds.
Given the long list of advantages that DEX aggregators provide, it should be unsurprising that several leading projects in this space have recently secured millions in funding, and that new market entrants are showing up on the scene.
The top 10 best crypto liquidity DEX aggregators you should know
Companies like Bisq, which offered peer-to-peer transactions on the blockchain off-chain, were among the first decentralized exchanges. As of 2016, EtherDelta began to envision a futuristic DEX. Using a traditional order-book model, the platform manages trading wallets through smart contracts. This model, however, had a complicated user interface, lacked liquidity, and was not as compatible with Ethereum. The emergence of cryptocurrency exchanges in 2018 has been dramatic. Instead of using buyers and sellers, they rely on automated market makers, asset pricing defined by permissionless protocols, and liquidity pools. The popularity of decentralized exchanges has grown dramatically in 2022. These are the 10 best cryptocurrencies DEX aggregators you should know in 2022.dYdX
dYdX is the developer of a leading non-custodial decentralized exchange on a mission to build open, secure, and powerful financial products. dYdX runs on audited smart contracts on Ethereum, which eliminates the need to trust a central exchange while trading. The exchange combines the security and transparency of a decentralized exchange, with the speed and usability of a centralized exchange.
PancakeSwap is a decentralized exchange for swapping BEP20 tokens on Binance Smart Chain. PancakeSwap uses an automated market maker (AMM) model where users trade against a liquidity pool. Such pools are filled with users’ funds. They deposit them into the pool, receiving liquidity provider (or LP) tokens in return. They can use those tokens to reclaim their share, plus a portion of the trading fees.
Swapzone is an aggregator of exchanges that support DEX-exclusive assets crosschain swaps. The platform is a non-custodial one and doesn’t require any registration or verification from the user’s side. Swapzone positions its mission as a simplification of the exchange process as it helps users to make an informed choice through incorporation of many assets and services. For this moment, the aggregator unites crypto-to-crypto exchange offers for supported cryptocurrency pairs through APIs of more than 15 exchange services.
SushiSwap is first on the list of culinary-themed decentralized exchanges. If you’re a fan of sushi over unicorns, this may appeal to your senses more. In any case, SushiSwap has a lot in common with Uniswap since it is a fork of Uniswap.
1inch Liquidity Protocol
1inch is one of the leading DEX aggregators that offers the best rates by discovering the most efficient swapping routes across all leading DEXes. If you’re worried that an Oasis coin might have a lower price than a Uniswap one, you can ease your worry with DEX aggregators like 1inch. The platform also operates on the Ethereum and Binance Smart Chain, allowing diversification in your trading options.
Uniswap is a protocol for automated token exchange on Ethereum. It was launched on November 2, 2018. Uniswap describes itself as a simple smart contract interface for swapping ERC20 tokens. It has a formalized model for pooling liquidity reserves. It serves as an open-source frontend interface for traders and liquidity providers and is committed to providing free and decentralized asset exchange.
Raydium is an automated market maker (AMM) and liquidity provider built on the Solana blockchain for the Serum decentralized exchange (DEX). Unlike any other AMMs, Raydium provides on-chain liquidity to a central limit order book meaning that funds deposited into Raydium are converted into limit orders which sit on Serum’s order books. This gives Raydium LPs access to all of Serum’s order flow as well as their existing liquidity.
Trader Joe is your one-stop DEX aggregator on the Avalanche network. It combines DEX services with DeFi lending to offer leveraged trading. Trader Joe products are community-driven which allows Trader Joe to give fees collected from liquidation and swaps back to the users via our JOE/xJOE staking mechanism. JOE is a governance token that also rewards its holders with a share of exchange revenues.
1Hive is a DAO that issues and distributes a digital currency called Honey. Honey holders stake on proposals using Conviction Voting to determine how issuance is distributed. By supporting proposals that increase the value of Honey, a positive feedback loop drives growth and sustainability. Conviction voting allows everyone to participate and shape the direction of 1Hive while preventing anyone from taking control or ownership. Honeyswap is one of the best DEX aggregators in 2021.
Mdex is an automatic market-making decentralized exchange based on the concept of fund pools. MDEX proposes and implements a mix-chain DEX model based on the Heco Chain and Ethereum. Mdex combines the advantages of the low transaction fees of the Heco chain and the prosperity of the Ethereum ecosystem. With MDEX, users can also await a dual mining mechanism of liquidity and transactions.