How Do DEX Aggregators Find the Most Efficient Trading Routes across Multiple AMMs?
DEX aggregators use sophisticated algorithms to find the best trading routes by splitting a single trade across multiple decentralized exchanges (DEXs) and liquidity pools. They analyze factors like token prices, pool liquidity, transaction fees, and slippage across a wide range of DEXs.
By breaking up a large trade into smaller pieces and routing them through the most efficient paths, they can often offer a better overall price than any single DEX could. This process is known as "pathfinding."