Efficient Order Routing is a method that is used in trading to route orders to multiple exchanges or liquidity pools in order to find the best price for a particular asset. In a decentralized exchange (DEX), an order router may be used to route orders to multiple liquidity pools in order to find the best price and execute the trade.
An efficient order router uses algorithms to analyze market data and determine the best execution strategy for a particular order. They can consider a variety of factors, such as the current market price, the size of the order, and the time remaining until the order expires.
Order Routing mechanism are often used by professional traders and market makers to execute large orders or to trade in fast-moving markets. They can help to reduce the impact of a trade on the market and improve the likelihood of getting a good price. However, they can also be used by retail investors to execute trades more efficiently and with better prices.
A DEX aggregator allows users to access and trade on multiple decentralized exchanges (DEXs) from a single platform. DEX aggregators work by connecting to multiple DEXs and aggregating their liquidity pools, so that users can access a wider range of trading pairs and potentially get better prices for their trades.
DEX aggregators often use smart order routing algorithms to find the best prices for a particular trade across all of the connected DEXs.
Using a DEX aggregator can make it easier for users to access and trade on multiple DEXs without having to connect their web3 wallets on each individual platform.
It can also help to improve the liquidity and efficiency of the overall decentralized exchange ecosystem.
A market maker aggregator allows users to access and trade on multiple market maker pools from a single platform. Market makers are firms or individuals that provide liquidity to a market by continuously buying and selling assets. They play a crucial role in maintaining orderly markets and facilitating trades.
Market maker aggregators work by connecting to multiple market maker pools and aggregating their liquidity, so that users can access a wider range of trading pairs and potentially get better prices for their trades.
Now that we have looked at different trading models lets take a look at how we have leveraged the best of every model and created a highly optimised trading engine.