What are DEX aggregators and why are they important?

What are DEX aggregators & why are they important?

By Autobahn Network | L2 for BSC | AutobahnNetwork | 28 Sep 2021

Decentralized exchange (DEX) aggregators like 1inch are a Decentralized Finance (DeFi) innovation that allows traders to swap via different exchanges in a single interface!

It’s an advantage for you AND the project behind a token to use them! Let’s understand them a little bit better in today's Tixl Explained Series!

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What are DEX aggregators and why are they important?

DEX aggregators allow crypto traders to benefit from different connected decentralized exchanges in a single interface. Instead of going to DEXs separately to check liquidity and trade price impact, traders can access the liquidity pools of many decentralized exchanges from one website.

DEX aggregators source liquidity from different DEXs & thus offer users better token swap rates than they could get on any single DEX. Aggregators like 1inch can optimize slippage, swap fees & token prices which leads to better rates for traders.

Using a DEX aggregator, however, is not only ideal for traders, as they get the best price, it’s also great for the project behind a token, as a sell order is always routed to the best liquidity pool with the lowest price impact, saving the trader fees to buy more of a token.

Example: Tixl’s TXL BEP20 is listed on two Binance Smart Chain supporting DEXs: PancakeSwap & ApeSwap. Instead of using PancakeSwap & ApeSwap directly, it’s beneficial if traders use 1inch — they get the best price, lowest fees and the TXL token gets more stability.