The concept of digital trading assets gained popularity via the CEX; centralized exchange managed by a centralized administration. The centralized exchanges caught the attention of most investors until they faced issues with security, downtime, lack of transparency, and above all, hefty transaction fees along with additional charges of brokerage. The latter created a need for Decentralized exchanges (DEXs) that eliminated the need and involvement of the intermediary.
The traditional decentralized exchange was in its glory for quite a while until users faced issues of order books and poor liquidity. However, the Automated Market Makers (AMMs) came to the rescue by simply eliminating ordering books and replacing them with liquidity pools. Despite these changes, the problem of liquidity persisted in individual DEXs. Therefore, the DEX aggregators pooled fragmented liquidity together in a single platform creating a greater liquidity reach and exchange conditions .
Yet again, most of the DEX aggregators were limited to Ethereum-based liquidity pools limiting multi-chain accessibility. Consequently, they struggled in trading volumes compared to CEX. However, Cross-Chain Aggregators came to the rescue when they emerged in the market.
A Cross-Chain Aggregator is a developed network of DEXs and these Aggregators have worked to eliminate base problems by pooling liquidity from multiple blockchains thus providing frictionless liquidity and a variety of assets to the user. With a unique algorithm, Aggregators use the most appropriate route to provide the trade orders at the best prices across different blockchains, easing the users’ trading strategies.
With this ideal functionality, the demand for Cross-Chain Aggregators is rising, and aggregators so far have proven to be the next level of blockchain liquidity.
