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A DEX aggregator (decentralized exchange aggregator) is a platform that pools liquidity from multiple DEXs across different networks into a single interface. It optimizes the trading experience by allowing users to compare rates and find the best possible options for their trades.
When a user initiates a trade, the aggregator scans various DEXs to find the best price and optimal execution method. It might split the order across different DEXs to achieve a better overall price and reduce slippage.
By consolidating liquidity from various DEXs, DEX aggregators help reduce fragmentation in the DeFi (decentralized finance) space, providing users with deeper liquidity and more competitive pricing. This aggregation of liquidity also enhances interoperability, enabling users to trade assets seamlessly across multiple blockchain networks.