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12/14/2023

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DexHunter: Benefits of DEX Aggregation Explained

How DEX Aggregation and Partial Fills Offer Better Prices and Flexibility, Illustrated with a 1000 ADA Example

DexHunter: Benefits of DEX Aggregation Explained

How DEX Aggregation and Partial Fills Offer Better Prices and Flexibility, Illustrated with a 1000 ADA Example

DEX Aggregation Benefits

Let's take a look at a couple of direct benefits for traders from using DexHunter DEX aggregator compared to trading on a single DEX:

  • Best Trading Prices: By accessing multiple exchanges at once, DEX aggregation ensures traders find the best available price for their assets, optimizing their buying or selling experience.
  • Partial Fills: DEX aggregation minimizes the risk of price changes during trade execution, making transactions more predictable and closer to the expected price.
  • Enhanced Liquidity: By pooling the liquidity from various exchanges, DEX aggregation makes it easier to trade large quantities without substantially affecting the market price, accommodating various trading needs and preferences.

Example: Swapping 1000 ADA to Y Token

You want to swap 1000 ADA for Y Token. You have three options:

Using DexHunter (DEX Aggregator):

  • DEX A: 600 ADA at 2 Y Tokens each = 1200 Y Tokens.
  • DEX B: 400 ADA at 1.95 Y Tokens each = 780 Y Tokens.
  • Total using aggregator: 1980 Y Tokens.

Swapping Directly on DEX A (With Price Impact)

  • Total on DEX A only: 1960 Y Tokens.

Swapping Directly on DEX B (With Price Impact)

  • Total on DEX B only: 1940 Y Tokens.

Summary

Using an aggregator, you get 1980 Y Tokens, which is 20 more than using DEX A alone and 40 more than using DEX B alone. The aggregator leverages the best prices, minimizing the price impact, and maximizing the Y Tokens you receive, this also works the other way around for selling tokens for ADA.

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ORIGINAL SOURCE

https://dexhunterio.medium.com/dexhunter...

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