One of the key components of a 1inch exchange clone is its aggregated liquidity pools. If you're planning to build a DEX aggregator using a 1inch clone script, understanding their role is essential.
Have you ever used a 1inch platform to swap tokens? If so, you have noticed that using this platform is more user-friendly than regular DEXs. This happens not by luck! The secret behind that excellent swapping mechanism is “aggregated liquidity pools”.
So, what are these pools, and why do they play such a vital role in a 1inch exchange clone? Let’s explore this now!
What is Aggregated Liquidity?
The term “aggregated liquidity mentions the process of gathering liquidity from different DEX platforms such as Pancakeswap, Uniswap, Sushiswap, and more. Instead of depending on the liquidity pool of just one DEX, a 1inch clone pulls liquidity from a diverse range of DEXs to help traders snag the best deal available at any moment.
To better grasp the term "aggregated liquidity," let me give you an example.
So, imagine this: You are interested in buying a specific crypto and searching for the best price across different DEX platforms. On one decentralized exchange (DEX), the price is high for the crypto you want to buy because of limited supply. But on another DEX, you might find it at a lower cost due to higher liquidity. Here, a DEX aggregator like a 1inch exchange clone steps in to help them by checking all those pools in real-time and guiding your trade through the one (or multiple) that gives you the best deal in a single space.
So, users don’t need to waste time checking the best trading rates across all DEXs for their preferred tokens. They can buy the tokens at the best price without stopping on other platforms.
This is what aggregated liquidity looks like—smart routing + extensive access = best prices.
Why Is Aggregated Liquidity Essential For 1inch Exchange Clone?
Whether you plan to build a DEX aggregator by using a 1inch exchange clone, then the “aggregated liquidity” is not just a feature, it’s the core and most important thing for your 1inch exchange clone. Simply, it’s like a heart for your platform.
How do aggregated liquidity pools benefit your 1inch exchange clone?
- It offers low slippage.
- Provides better token prices for your users.
- Helps to facilitate trades more quickly.
- More reliable token availability.
This impacts your 1inch exchange clone user’s experience. This will be more helpful for traders who want to achieve maximum value with minimal effort. Here, aggregated liquidity plays a key role in delivering that experience.
Why Aggregated Liquidity Gives Your 1inch Clone the Competitive Edge
- Liquidity aggregation functionality in your 1inch exchange clone helps to make it more efficient and user-friendly. So you can gain more users for your platform easily.
- By routing trades through different pools, you can help reduce congestion, share gas fees more evenly, and even improve platform security by avoiding those risky or poor liquid pools.
- Many platforms now use dynamic routing algorithms. This mechanism helps platforms to learn from past trades and tweak their routing logic in real-time. This means that each transaction can improve the next one—something traditional exchanges simply can’t provide.