In this guide, you will learn what a crypto trading aggregator is, how it works, why a trader should consider using one, and more!
At the time of writing this article, there are an estimated 20,000 unique cryptocurrencies in circulation. On top of this, there are hundreds if not thousands of different exchanges on which these digital assets are traded, some of them centralized, some of them decentralized.
Given the somewhat fractured and complex state of the current crypto landscape, it is clear that accessibility is one of the key bottlenecks preventing further mass adoption.
In fact, even the most experienced traders may find it difficult to keep track of all the coins/tokens on all the different exchanges, not to mention the specific trading pairs offered on each one (and that’s without taking into account the liquidity or the rates) .
This is where crypto trading aggregators come in.
What are crypto trading aggregators?
In the most basic sense, a crypto trading aggregator is a platform that collects and processes data from multiple exchanges in order to provide users with a single and consolidated vision of the market.
However, these aggregators not only show you the current price (on multiple exchanges), but also allow you to trade in a user-friendly interface.
The goal is to make it as easy as possible for users to find the best prices for the assets they want to trade, without having to search through multiple exchanges individually. This is done by connecting to the various Exchanges API and retrieve the relevant data, which is then processed and displayed on the aggregator platform in a user-friendly way.
There are a few different types of data that a typical aggregator will track, including (but not limited to):
- Prices: The current bid and ask prices for each trading pair, across all connected exchanges.
- Liquidity: The amount of each asset that is currently traded on each exchange.
- Fees – The various fees charged by each exchange for making a transaction.
Some aggregators will also track historical data, such as past prices and volumes, to give users a better overview of market trends.
What are the benefits of using a crypto trading aggregator?
There are several key benefits that make using an aggregator an attractive proposition for both experienced traders and those new to the world of cryptocurrency. Some of the most notable advantages include:
- Easier trading access to a variety of digital assets – As we mentioned earlier, one of the main benefits of using an aggregator is that it gives users a single interface through which they can trade multiple assets. This is opposed to having to create and manage accounts on multiple exchanges, which can be time consuming and confusing, especially for those new to crypto.
- Improved Price Discovery – Another benefit of using an aggregator is that it can help users more easily find the best prices for the assets they want to trade. This is because the platform will track prices across all connected exchanges in real time and display them in one place. This way, users can quickly and easily compare prices and find the best deals.
- Low Fees – Most aggregators display the estimated trading fee for each exchange, which can help users save money by choosing the platform with the lowest fees. Additionally, some aggregators also offer their own reduced fee structure for users who trade frequently or use the native token.
- Improved Liquidity – In addition to tracking prices, most aggregators also track liquidity. This is the amount of each asset that is currently trading on each exchange and is a good indicator of how easy it is to buy or sell an asset. The higher the liquidity, the easier it should be to trade.
Cross Chain Solutions
While crypto trading aggregators are prominent on centralized exchanges (CEXs), they are also becoming increasingly popular in the world of decentralized finance (DeFi).
In DeFi, aggregators play an important role in bringing together the various decentralized exchanges (DEXs), as this is by far the most fragmented and complex part of the ecosystem. There are currently hundreds of different DEXs, each with its own native token, trading pairs, and order book.
On top of this, many DeFi protocols operate on different blockchain ecosystems, which means that it is extremely difficult to cross trade between them.
Fortunately, crypto trading aggregators like Unizen, 1 inchY ForSwap offers a cross-chain-enabled solution that makes it simple for users to exchange digital assets from centralized and decentralized financial (CeDeFi) networks.
Unizen’s trading aggregator, for example, facilitates transactions on seven different blockchains and aggregates data from more than 70 DEXs, all within one user interface. This significantly improves the odds of finding a cheaper deal on your trades and eliminates almost all of the hassles associated with cross-chain forex trading, not to mention the fee-saving aspect.
The main advantage here is that users will no longer need to use a blockchain bridge to convert their tokens to the native currency of another blockchain, as they will be able to trade directly between any two assets. This makes trading DeFi assets safer, simpler, and easier to use.
If cryptocurrencies have any real chance of becoming truly mainstream, then they need to be easier to use. Fortunately, this is something that commercial aggregators can help with.
By providing users with a single platform through which they can trade multiple assets, aggregators make the process of buying and selling digital currencies much simpler and more efficient. Furthermore, by tracking prices and liquidity across all connected exchanges, they can also help users get the best deals, even when trading. DeFi active.
For these reasons, it is fair to say that crypto trading aggregators are likely to play an important role in the future development of digital currency markets.