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Crypto Terms:  Letter D
Jun 19, 2023 |
updated Apr 02, 2024

What is DEX Aggregator?

DEX Aggregator Meaning:
DEX Aggregator - is a blockchain-based service that gives the opportunity for cryptocurrency traders to gain profit from several financial tools in a single interface.
3 minutes

Let's find out DEX Aggregator meaning, definition in crypto, what is DEX Aggregator, and all other detailed facts.

In general, cryptocurrency exchanges can be put into two distinct categories, either centralized or decentralized. DEX aggregators function as a centralized search engine for the prices and liquidity provided by decentralized exchanges (DEXs).

DEX aggregators have become a wanted service as cryptocurrencies have gone mainstream and the use of decentralized exchanges has increased.

In 2019, The first ever DEX aggregator was developed as a component of a hackathon competition. Partakers in the competition believed that they required the aggregated data from several DEXs, however, it was not possible yet.

In regards to that, Sergej Kunz and Anton Bukov developed the 1inch MVP in 18 hours at the same time as the hackathon was happening. The very first version lacked full functionality and upgrades, but it became a great example of why DEX aggregators are needed.

DEX aggregators have grown in popularity since then. Similarly, there has been an increase in interest in DeFi (decentralized finance). Cryptocurrencies and blockchain technology have drastically transformed both personal and business finance, and DEX aggregators enable investors to make educated trade decisions.

The simplest way to illustrate a DEX aggregator works is to put it next to a search engine. Services such as Google Flights provide aggregated data from several airlines, and users have the ability to choose the exact deal that works the best for them.

DEX aggregators operate in a similar manner. They collect data from a variety of decentralized exchanges and allow divided trades in order to deliver the best pricing available. Furthermore, DEX aggregators do several computations and provide customers with the opportunity to make split transactions in order to obtain the best available swap value.

In essence, crypto traders are unable to achieve this outcome because DEX aggregators do incredibly complex computations in a couple of seconds.

Decentralized exchanges provide constantly changing pricing, and it is not that simple to come across the most fitting deal for the set users are looking into. In addition, crypto investors are beginning to choose DEXs more often, because they provide exceptional security and a better fit with the essential features of a cryptocurrency.

Nevertheless, with the increasing adaptability and popularity of crypto, DEXs overload the market even more, and investors usually have a hard time selecting the best pricing and liquidity.

DEX aggregators are quite handy in this situation. Although investors may attempt to use several exchanges, DEX aggregators depend on sophisticated algorithms to consider various aspects while picking the best potential supplier for a specific token swap.