What is an aggregator?
To solve the problems outlined in the last two sections, we created Bridges Exchange as an aggregator. In short, an aggregator can compare swap rates between any two tokens and present the best swap to you.
Here's how an aggregator works:
- 1.You enter which token you have, which token you want, and the amount that you want to swap.
- 2.The aggregator checks each DEX to see if it has liquidity for the two tokens you have, and checks the swap rates for each in that moment.
- 3.The aggregator determines which swap is the best, and lets you swap in that liquidity pool directly without having to switch to another website.
Simple, right? Even better, Bridges Exchange builds on that basic aggregator concept with a few added features.
First, Bridges Exchange can also handle multi-hop swaps. This means that if there isn't a direct liquidity pair between the two tokens you want to swap, Bridges Exchange can make multiple swaps in the background for you. That means that when Bridges Exchange is checking the best swap rates, it takes into consideration that you may need to do multiple swaps before receiving the best rate.
As an example, consider that you want to swap USDT for Bitcoin. Bridges Exchange will check all LPs with both those tokens, but it will also check LPs that have only USDT and only Bitcoin, search for links between the two, and let you know if there is a swap route that is even better than directly swapping between the two tokens. When you decide to swap, Bridges Exchange handles everything in the background for you, meaning you don't have to manually make a bunch of swaps on your own.
Additionally, Bridges Exchange is able to split the tokens you want to swap and run them through several different exchanges. Why might that be a better swap? Consider that if you're swapping a large amount of tokens, you could have a large impact on the price of a token which means you wouldn't get the best swap. By splitting your liquidity across multiple LPs, you minimize the negative price impact and get more tokens in the end.
Aggregators are a great way to make sure that you don't leave any tokens on the table, and you get the best outcome for you. All that's left now is to connect your wallet and start swapping!