How Do Decentralized Exchange Aggregators Manage Slippage across Multiple Liquidity Sources?
DEX aggregators manage slippage by using "smart order routing" algorithms. These algorithms analyze the available liquidity across numerous DEX pools and split a user's order into smaller chunks.
Each chunk is routed to the pool that offers the best execution price and lowest price impact. By fragmenting the order and optimizing the route, the aggregator minimizes the overall slippage and reduces the chance of the total execution price exceeding the user's set tolerance.