Understanding DEX Aggregators

Explaining DEX aggregators—what they are, how they work, and how to build them.

Filip Dimkovski
By Filip Dimkovski
Romi Hector
Edited by Romi Hector

Published May 30, 2022.

If you've ever bought cryptocurrency, you've probably used an online crypto exchange. Depending on how it was built, exchanges are divided into two main categories: centralized exchanges (CEXs) and decentralized exchanges (DEXs). Since the price of cryptos varies from exchange to exchange, there have been ways to regulate the price and find a median value at a DEX.

This is where DEX aggregators come into the picture. These aggregators are complex algorithms that take many prices and factors into account to calculate the price of crypto on a decentralized exchange.

The Role of DEX Aggregators

Since their inception, DEX aggregators have had one role: finding the right price for every cryptocurrency listed at a decentralized exchange. Keep in mind that there's no such thing as a "right" price, as there will always be minor differences from exchange to exchange, just like every other market. A DEX aggregator's role is to find the best value it can from many different sources and list it at a decentralized exchange.

How to Build a DEX Aggregator

Developing a DEX aggregator is not that complicated if you have the necessary knowledge of blockchain development. To build a DEX aggregator, you first need to do a lot of research. This means fetching all the prices from different competitors and formulating a price for the coin in question. Then, with a smart contract, the algorithms that calculate the price are placed on the blockchain and allow the aggregator to be used as a calculator for every minor and major price change in the crypto market.