Getting the best possible trading rates is essential in crypto transactions to ensure receiving a profitable deal.
Before the introduction of auto-routing in pools, users experienced several difficulties that affected their trading efficiency and cost-effectiveness.
These issues include:
- Volatile Market Prices – the value of the same coin varies across liquidity pool pair.
- High Transaction Fees – manually trading across different liquidity pools results in higher transaction costs, reducing trader profitability.
- Time-Consuming – manually searching for the best rates and better fees takes time, particularly in highly volatile markets.
With these challenges, the development of auto-routing services provides improved liquidity and price execution alternatives, especially for an unpredictable market.
Understanding Auto Route in Pools
Auto-routing is an automated service that determines the suitable trading route across multiple liquidity pools to execute a transaction, ensuring traders receive the best possible rates.
It is implemented using advanced algorithmic calculations, which analyze and compare the parameters of available liquidity considering the highest volume reserve of the tokens. It considers which token pairs offer ideal pricing conditions.
Split Route and Multi-hop
Split-route is an algorithm that splits a user’s trade among several liquidity pools for up to seven pool pairs to optimize rate execution.
It allows users to access pool pairs from many sources inside the platform, increasing their chances of obtaining the best possible rate for their transaction.
Multi-hop, on the other hand, is the process of finding the optimal route through several number of asset hops. For example, if a transaction from Token A to Token B can be executed more effectively by converting Token A to Token C and then Token C to Token B, the algorithm will identify this path and carry out the trade appropriately, thereby increasing the user’s trade value.
Riverex Introduces Auto-Route in Pools
Riverex has now integrated the capabilities of the auto-routing service in its liquidity pools.
The platform’s auto-route service aggregates data from various liquidity pools, ensuring users can access the most extensive pool pair and get the best possible execution result.
How Auto Route Works on Riverex
The auto-routing service simultaneously searches liquidity from various pool pairs into a single interface. This ensures that users have access to the broadest liquidity pool pairs available.
The split route algorithm scans and evaluates the properties of the liquidity pools in real time to discover the optimum combination of pools for trade execution.
- Market Analysis – the auto-route algorithm collects real-time data from multiple pools in the platform.
- Determining Route – the algorithm determines the probable trading routes based on the data obtained (market liquidity).
- Suitable Route Selection – the system chooses the optimum path to minimize fees and maximize profits.
Advantages of Using an Auto Route Service
The auto-route service by Riverex is exceptionally significant for the following primary reasons.
- Better Prices by Maximizing Output
Auto-route locates and accesses the best suitable price across multiple pool pairs, enhancing the overall trading experience on the Riverex platform.
- Seamless User Experience with Time Efficiency
The automation reduces the execution process, where users will no longer need extensive knowledge of token pairings or manually calculate and search between liquidity pool pairs to identify the optimal rate for their transaction.
Auto-routing has transformed how users access liquidity and execute trades across several pool pairs.
This solution boosts the trading ecosystem’s productivity, cost savings, and profitability by employing smart contracts, automation, and scalable algorithms.
As Riverex continues to expand in the DeFi world, the introduction of its auto-route service reflects the company’s dedication to improving innovative solutions for all users.
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