What Is Crypto Aggregator And How Does It Work?
Crypto Knowledge

What Is Crypto Aggregator And How Does It Work?

written by John Murphy | February 14, 2023

The cryptocurrency metaverse is ever-expanding; more than 20,000 cryptocurrencies are available for trade in the market. Such a large quantity is a pro and con at the same time because keeping track of such large options is a tough ask, even for seasoned investors. Thus knowing what is crypto aggregator and how does it work?

Furthermore, one of the bottlenecks for mass adoption of crypto trading is the crypto space’s complex and somewhat broken nature. Also, a plethora of certain trading pairs on different crypto exchanges is not a piece of cake to swallow.

Moreover, new projects keep emerging in the DeFi market, thus negatively fluctuating the crypto market cap. All these factors cause noise in the market, which is where crypto aggregator comes in handy. 

So, let’s start and find a solution to the question, “what is crypto aggregator and how does it work?”

Crypto Aggregator

A crypto aggregator is a platform that provides a consolidated view of the entire market by collecting and processing data from different exchanges. The purpose of an aggregator is to support investors in making investment decisions by offering information in a simple and easy-to-use interface.

The aggregator is there to ease your decision and let you enjoy the best prices without going through multiple sources. They achieve this feat by linking multiple exchange APIs to retrieve relevant data. The data is analyzed by the aggregator’s experts and displayed in a piece of easy-to-understand information.

Working of Crypto Aggregator

What is crypto aggregator and how does it work is no doubt a common query to ask. As mentioned, crypto aggregators gather data and convert it into usable information by applying certain analytical tools. The core focus is to offer ready-made information, thus easing decisions.

A normal day for crypto aggregators will include processing the following data types; however, they are not limited to this only.

  • Liquidity

It is the sum of all assets that are now getting traded on all crypto exchanges. Aggregators gather information and compile them to offer investors a single number.

  • Prices

The asking and current bid prices for every trading pair across connected exchanges. It becomes easier to choose the right pair from readily available information.

  • Fees

Every crypto exchange charges different commissions or transaction fees for making a trade. So, you get the fee structure of all exchanges in a consolidated form.

  • Historical Data

Maintaining historical data, including past prices and volumes, offers traders an overview of the crypto market trend.

So, crypto aggregator makes investor life easier; thus, it is important to use them to avoid spending hours manually checking each transaction using smart contracts. Although it may suit a short-term casual trader, if you are targeting a long-term venture with crypto trading, contact an aggregator. Since implementing advanced trading strategies becomes easier when you have accumulated information to make your next step.

Moreover, once a trader picks up a trade, the aggregator runs and compares swap protocols across all exchanges to determine the best trade option. Thus, the trader is enabled to choose the best option to maximize profits.

Benefits of Crypto Aggregator

Crypto aggregators are useful for companies as much as they are for trades. Users receive key information on a single united platform rather going through numerous exchanges. So, what is crypto aggregator and how does it work will gradually will be cleared to you after going through it. In addition, aggregators also regulate traders’ interaction with dApps, crypto exchanges and investment portfolios.

In fact, aggregators are a great source of finding new customers for exchanges. So, crypto aggregators are not one-dimensional but the means to introduce new projects to potential investors, thus improving liquidity.

Here is a brief list of the pros of crypto aggregators.

  • Saves Time

Time is money! Aggregator platforms allow you to save time by enabling you ready-to-use information. Otherwise, if you have to do it yourself, it will consume your hours while leaving you in an uncertain space. 

So, you save sign-up, view, collect data, review, and prepare reports time.

  • Guides Decision-Making

Since aggregators offer comprehensive price comparisons of different exchanges, thus facilitate easy trading. Moreover, the easy price comparison process allows investors to make well-informed investment decisions.

  • Secure

Unlike forex trading and crypto exchanges that keep sensitive data of traders, the funds are stored in users’ wallets in aggregators. Therefore, these are less prone to security concerns.

  • Multiple Coin Choices

Since aggregators take into account all exchanges, thus their data is diversified. Thus, it increases investment options by highlighting shadowed coins. Although many investors focus only on Bitcoin or Ethereum, having alternate crypto options maximizes the benefits of many cryptocurrencies.

Frequently Asked Questions

What are aggregators in crypto?

An aggregator accumulates data from different crypto exchanges and processes them into easy-to-use information made available for traders.

What is the difference between an aggregator and DEX?

DEX does not offer the option of liquidation, while aggregators support liquidation by inviting investment into the crypto market.

What is the difference between an aggregator and a broker?

Generally, brokers keep 80% of the commission while the remaining 20% goes to the aggregator. Furthermore, aggregators only earn when a transaction is materialized, while brokers set fixed amounts for their services.

What are the examples of aggregators?

Here are a few examples of crypto aggregators.

  • Rango Exchange
  • 1Inch
  • ParaSwap
  • Open Ocean

What are the types of aggregators?

There are multiple types of aggregators, the two of which are mentioned below.

  • Service aggregators
  • Social aggregators

Parting Thoughts

Amidst the growing cryptocurrency metaverse, having aggregators appears as a promising solution that can support traders in making calculated investment decisions, thus it compliment the fact that the crypto will make the world a better place.

In brief, aggregators help increase the crypto market cap by enabling beginners to turn into pro-level traders. On the reverse, they also support businesses to gain new customers.

By providing users with a single platform, aggregators make buying and selling cryptocurrency simple and easy. In addition, tracking price fluctuations helps users get the best deals, even for DeFi assets. 

Since the crypto market is highly volatile, thus having a platform that works for you is a luxury. That is why aggregators are becoming the highlight of the modern crypto trade. Many existing and new investors involve these platforms to maximize their profitability and mitigate the high-risk environment.

We hope we have satisfied your query, “what is crypto aggregator and how does it work.” Please leave feedback in the comments section.