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What Is Crypto Trading Aggregator?

UTC by Andy Watson · 5 min read
What Is Crypto Trading Aggregator?
Photo: Unsplash

In this guide, you’ll learn what a crypto trading aggregator is, how it works, why should a trader consider using one and more!

At the time of writing, there are an estimated 20,000 unique cryptocurrencies in circulation. On top of this, there are hundreds, if not thousands of different exchanges upon which these digital assets are traded, some of them centralized, some decentralized.

Given the somewhat fractured and complex state of the current crypto landscape, it’s clear that accessibility is one of the key bottlenecks preventing further mass adoption.

In fact, even the most seasoned traders can have a hard time keeping track of all the various coins/tokens across all the different exchanges, not to mention the specific trading pairs offered on each (and that’s not even taking liquidity or fees into account).

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, consolidated view of the market.

However, not only do these aggregators show you the current price (across multiple exchanges), but they also allow you to place trades in one easy-to-use interface.

The aim 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’ APIs and retrieving 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 being traded on each exchange.
  • Fees: the various fees charged by each exchange for making a trade.

Some aggregators will also track historical data, such as past prices and volumes, in order to provide users with 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, both for experienced traders and those new to the world of crypto. Some of the most notable advantages include:

  • Easier trading access to a variety of digital assets – As we mentioned before, one of the main benefits of using an aggregator is that it provides users with 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 both time-consuming and confusing, especially for those new to crypto.
  • Improved price discovery – Another advantage 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.
  • Reduced fees –  Most aggregators display the estimated trade fee for each exchange, which can help users save money by choosing the platform with the lowest fees. In addition, some aggregators also offer their own Reduced fee structure for users who trade frequently or use the native token.
  • Improved liquidity – As well as tracking prices, most aggregators also track liquidity. This is the amount of each asset that is currently being traded 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 across centralized exchanges (CEX), they’re 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 (DEXes), since 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 it is extremely difficult to cross-trade between them.

Fortunately, crypto trading aggregators like Unizen, 1inch, and ParaSwap offer a cross-chain enabled solution that makes it simple for users to trade digital assets from both centralized and decentralized finance networks (CeDeFi).

Unizen’s Trade Aggregator, for example, facilitates trades across seven different blockchains and aggregates data from over 70 DEXes, all within one user interface. This significantly improves the odds of finding a cheaper deal on your trades and removes almost all of the hassle associated with trading currencies cross-chain – 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 another blockchain’s native currency, as they will be able to trade directly between any two assets. This makes trading DeFi assets safer, simpler, and more user-friendly.

Bottom Line

If crypto is to stand any real chance at becoming truly mainstream, then it needs to become more user-friendly. Thankfully, this is something that trading 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. In addition, by tracking prices and liquidity across all connected exchanges, they can also help users get the best deals, even when trading DeFi assets.

For these reasons, it’s fair to say that crypto trading aggregators are likely to play an important role in the future development of the digital currency markets.

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