All these AMMs have different prices and fees! How do I know the best place to swap my tokens?

Due to slippage and differences in swap algorithms, arbitrage, fees and available pairs, different AMMs usually have different prices and costs associated to swap between two specific tokens, especially since one swap can have multiple steps and each step could have different costs on different AMMs. For a while, this made executing an efficient swap a time-consuming matter.

The rise of aggregators

Fortunately, DEX aggregators were created in order to quash this issue. “But what are they and how do they work?” you ask.

Well, DEX aggregators are protocols that will find the optimal route for you to swap your desired tokens and bundle all the necessary steps into one transaction, optimized for transaction fees or “gas”. Sometimes this will include going through specific routes on one AMM or even executing multiple swaps on multiple AMMs within the same transaction.

For you, the end user, this is completely transparent. The interface works just like an AMM, select token A, select token B, enter the amount of token A to swap and the interface tells you the amount of token B you will receive and the expected amount of slippage, with the route specified underneath. The difference being, the route can include different protocols rather than just one.

This means that by using DEX aggregators instead of normal AMMs, you will save time and money, and this will be very beneficial to your trading. Some even allow you to place limit orders, in order to more effectively manage your entries and take-profits.

Examples:

• 1inch: Multi-chain DEX aggregator with limit orders and gas tokens

• Matcha: Multi-chain DEX aggregator built on the 0x protocol

• Cowswap: Ethereum and Gnosis Chain DEX aggregator with MEV protection, fees are paid on the token and do not require a transaction to swap

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