At the time of publication, there are more than 20,000 different cryptos in circulation. Furthermore, there are hundreds of exchanges where digital assets are traded. Some of these exchanges are centralized while others are decentralized.
Taking into consideration the somewhat broken and complex state of the current crypto space, it is notable that accessibility is one of the critical bottlenecks that prevent mass adoption.
Notably, even the most experienced traders can have a hard time keeping track of all the different coins and tokens across all the various exchanges. Also, there is a plethora of particular trading pairs offered on every exchange. All these factors do not even consider liquidity or the fees charged.
With all that ‘noise’ in the market, that is where the crypto trading aggregator comes in.
A crypto trading aggregator is a platform that mainly collects and processes data from different exchanges to give users a single and consolidated view of the entire market. These crypto trading aggregators show the current price from many exchanges and let you place trades in an easy-to-use interface.
The primary aim is to make it easy for users to get the best prices for the assets they want to trade or buy. The aggregator lets you enjoy the best prices without having to search through many exchanges separately. This is achieved by linking to the different exchanges’ APIs and retrieving all the relevant data. The data is then processed and displayed on the crypto aggregator in a user-friendly way.
A normal aggregator will track several types of data. They include, but are not limited to:
- Liquidity – the amount of every asset that is now getting traded on every exchange.
- Prices – the current bid and ask prices for every trading pair, across all the connected exchanges.
- Fees – the different fees charged by every exchange for making a trade.
Some of the aggregators will also track historical data, including past prices and volumes, to offer users a better overview of market trends.
What Are The Advantages Of Using A Crypto Trading Aggregator?
With a considerable rise of cryptos and the growing glamor associated with it, the demand for a dependable service where traders and investors can sell and buy crypto from any trading exchange, without owning an account is considerably high.
By essentially partnering with many exchanges to provide users with an integrated and simplified experience, an exchange aggregator platform gives the much-needed ease and value of carrying out transactions for the users.
Without having to dig through many log-in procedures across many exchanges, users can get all the needed information on one unified interface. Furthermore, with the current regulatory environment becoming strict by the day, a crypto trading aggregator is mainly immune to the continuous changes in rules and regulations since it comes with the benefit of working as a global exchange, not bound by major legal requirements.
The crypto aggregator can level up user experience while simultaneously adding value and business sense. Several notable benefits make the use of a crypto trading aggregator an attractive proposition for seasoned traders and those new to the crypto sector. Some of the major advantages include:
- Improved price discovery – a notable benefit of using an aggregator is that it can enable the users to find the best prices quickly and easily for the assets they are interested in. That is possible since the platform tracks prices across all linked exchanges in real-time and displays them in one place. That way, the users can easily and quickly compare prices to get the best deals.
- Improved liquidity – apart from tracking prices, most of the crypto trading aggregators also track liquidity in the market. Liquidity is the amount of every asset that is currently being traded on every exchange. It is an indicator of how easy it is to buy or sell an asset. The higher the liquidity, the easier it is to trade it.
- Easier trading access to various digital assets – as stated previously, one of the key benefits of using an aggregator is that it offers users a single interface through which they can readily trade multiple assets. That is opposed to having to create and manage accounts on many exchanges, which might be both confusing and time-consuming, mostly for those investors and traders new to crypto.
- Reduced fees – most of the crypto trading aggregators display the estimated trade fee for every exchange. That can enable the users to save their money by selecting the platform with the lowest fees. Furthermore, some of the aggregators also offer their reduced fee structure for the users who trade often or use their native token.
- It saves time – trading on an exchange aggregator platform enables users and investors to take a quick look at all available prices of different crypto assets. That saves them time from having to manually view, visit, and sign-up at various exchanges.
- Guides decision-making – crypto trading aggregators normally have rich visual interfaces with information that is categorized clearly hence enabling price comparison across various exchanges. Hence, it facilitates easy trading. Due to that, price comparison becomes simple and instantaneous and the users can make an informed decision and choice.
- Enhanced security – when a crypto transaction is executed on an exchange, sensitive details are stored in the exchange. That storage of data increases the possibility of security breaches in case the exchange is exposed to an assortment of vulnerable threats. Nevertheless, in the case of a crypto trading aggregator, funds are stored in the wallet of the users and thus there are no looming security challenges as such.
- It is more customized – when you use a crypto trading aggregator, you can track your crypto portfolio’s performance on a single unified interface by integrating the API keys of multiple crypto exchanges. Furthermore, you can configure instant alerts for currencies of high interest and get news instantly delivered to your inbox or mobile.
- Enhance support – apart from aggregating various coins and offerings at one platform, the crypto trading aggregator also extends some massive support to the users. Instead of having to contact many exchanges, users only have to address all of their questions to one aggregator platform.
Since an aggregator represents thousands of clients, it strives to win the favor of customers. Therefore, while a crypto exchange might delay replying to individuals, queries from a crypto trading aggregator platform, on behalf of clients are addressed on priority. These are the main reasons that make aggregator platforms better options while transacting cryptos.
While the crypto trading aggregators are prominent throughout the centralized exchanges (CEX) space, they are also becoming majorly popular in the decentralized finance (DeFi) world.
In DeFi, aggregators play an integral role in bringing together the different decentralized exchanges (DEXs), since that is by far the most fragmented and highly complex part of the network. Currently, there are hundreds of different decentralized exchanges, each with a native token, trading pairs, and order book.
Apart from that, most DeFi protocols operate on various blockchain ecosystems, meaning that it is extremely challenging to cross-trade between them.
Fortunately, the crypto trading aggregators like 1inch, Unizen, and ParaSwap provide a cross-chain enabled solution that makes it quite simple for users to trade digital assets from both centralized and decentralized finance networks (CeDeFi).
For instance, Unizen’s Trade Aggregator facilitates trades across seven different blockchains. It also aggregates data from more than 70 DEXes, all within a single interface. This considerably increases the odds of finding a cheaper deal on your trades and eliminates nearly all of the hassle that is associated with trading various currencies cross-chain and adds to the fee-saving aspect.
The main benefit here is that users no longer have to use a blockchain bridge to change their tokens to another blockchain’s native currency, as they can trade directly between any two assets. That makes trading decentralized finance (DeFi) assets simpler, safer, and highly user-friendly.
In case crypto wants to stand a chance of becoming truly mainstream, then it has to become more user-friendly. Luckily, the crypto trading aggregator can do something to help the industry go mainstream.
By offering users a single platform on which they can trade many assets, aggregators make the process of selling and purchasing digital currencies simpler and highly efficient. Furthermore, by tracking prices and liquidity across all the connected exchanges, they may also help the users to get the best deals even when trading decentralized finance assets.
For those reasons, it is best to say that crypto trading aggregators are likely to play an integral role in future developments of the digital currency markets.