• News
    • Bitcoin
    • Altcoins
    • Blockchain
    • DeFi
    • Regulation
    • Scams
  • NFT
  • Metaverse
  • Analysis
  • Learn
  • Videos
  • Blogs
  • Market Cap
  • Shop
What's Hot

Altseason Ignites: Bitcoin Inflows, ETH Flip, and Saylor’s Bold Move

2025-07-22

Salty No-Coiner Hates Bitcoin

2025-07-22

Bull Run Kickoff – Bitcoin and Crypto Set to Soar

2025-07-22

Subscribe to Updates

Get the latest creative news from FooBar about art, design and business.

Facebook Twitter Instagram
Crypto Investor News Network
  • News
    • Bitcoin
    • Altcoins
    • Blockchain
    • DeFi
    • Regulation
    • Scams
  • NFT

    All Eyes on Art: Upcoming Collections to Watch the Week of February 4

    2025-02-05

    Creator of rabbit AI assistant has hidden NFT past

    2024-05-02

    Ethereum tops daily NFT sales at US$7 mln, ends weakest month of 2024

    2024-05-02

    Top NFT Airdrops and Giveaways for May 2024

    2024-05-02

    Casio Launches NFT Collection Celebrating 50th Anniversary

    2024-05-01
  • Metaverse

    Shib: The Metaverse – Part of the Expanding Shiba Inu Ecosystem

    2025-01-03

    Experience to Earn: Everdome’s Metaverse Frontier

    2024-12-30

    Beyond Bots: Meta Motivo and the Dawn of Humanlike Digital Life

    2024-12-13

    Exploring NetVRk: What Is Behind This AI-Driven Virtual Universe?

    2024-10-28

    Council of Europe Highlights Metaverse’s Impact on Privacy and Democracy

    2024-09-05
  • Analysis

    Crypto Exchange Coinbase Lists New DeFi Altcoin Project Built on Base Blockchain

    2023-12-13

    Ethereum Price Bears Keep Pushing, Why Decline Isn’t Over Yet

    2023-12-13

    Trader Bullish on Cosmos (ATOM), Says One Dogecoin Rival Setting Up for Next Leg Up – Here’s His Outlook

    2023-12-13

    AVAX Price Pumps 50% and Dumps 15%, Why Uptrend Is Still Strong

    2023-12-13

    Top Trader Predicts Parabolic Rally for Solana Competitor – Here’s His Upside Target

    2023-12-13
  • Learn

    What Is Copy Trading in Crypto? A Beginner’s Guide

    2025-07-10

    A Step-by-Step Guide for Risk-Takers

    2025-07-09

    What is Spot Trading in Crypto? A Beginner’s Guide to How It Works

    2025-07-09

    How It Works and What to Watch Out For

    2025-07-09

    Crypto Risk Management Strategies for Trading (2025)

    2025-07-07
  • Videos

    Altseason Ignites: Bitcoin Inflows, ETH Flip, and Saylor’s Bold Move

    2025-07-22

    Salty No-Coiner Hates Bitcoin

    2025-07-22

    Bull Run Kickoff – Bitcoin and Crypto Set to Soar

    2025-07-22

    Something BIG is About To Go Down…Got Bitcoin?

    2025-07-22

    More Proof That Crypto Altcoin Season Started

    2025-07-21
  • Blogs
  • Market Cap
  • Shop
Facebook Twitter Instagram TikTok
Crypto Investor News Network
Home»DeFi»DEX aggregators: The ultimate solution to reduce price slippage in DeFi
DeFi

DEX aggregators: The ultimate solution to reduce price slippage in DeFi

2023-03-10No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest Email

Presented by Yad Finance

Price slippage is a constant risk in trading on centralized exchanges (CEXs) and decentralized exchanges (DEXs) alike. It occurs when a trader’s order is executed at a different price than the one intended. It can happen due to high volatility, low liquidity or delays in order execution, resulting in a noticeable difference between the expected and actual transaction price.

The DeFi ecosystem prioritizes decentralization and transparency, so the price slippage problem is more prominent than on centralized platforms.

Price slippage on CEXs and DEXs

On CEXs, price slippage is caused by factors such as low liquidity, high volatility and order book depth. CEXs are platforms that connect buyers and sellers of digital assets, with order books being a key element.

An order book is a record of all buy and sell orders placed by traders for a particular cryptocurrency. It displays the quantity and price of each order, and orders are arranged by price. For example, if someone wants to buy $1,000 worth of Bitcoin (BTC) and there is another trader looking to sell his Bitcoin for a similar amount, these orders will be matched in the order book. Market orders are executed immediately at the best price, while limit orders are executed at a price indicated by the trader when there is a match.

The depth of an order book is defined by the quantity of buy and sell orders at different price levels. Market depth is a key indicator of liquidity on any platform. Thus, the greater the market depth, the lower the chance of price slippage, thanks to the balance between buy and sell orders.

See also  ​​Orbs teams up with QuickSwap to introduce Liquidity Hub

In reality, liquidity is not only provided by regular buyers and sellers but mainly by market makers, who place orders at both ends and profit from the bid-ask spread.

Large CEXs can boast great liquidity, which minimizes the risk of price slippage since even large orders can be fulfilled.

Since order books are managed by centralized entities, DEXs don’t have these at all. Instead, they employ the Automated Market Maker (AMM) model, which implies pre-funded pools for each cryptocurrency pair to cover both sides of trades. The liquidity pools are supplied by liquidity providers, who get incentivized to lock an equal value of both cryptocurrencies of a pair. The trading fees on the DEX are distributed to all liquidity providers, who take the role of market makers.

While there are several types of AMM models, the constant product formula is the most widespread one. Since it requires a constant balance between the pair components, a standard AMM is prone to price slippage because of the price impact, which can be affected by the liquidity pool size and the order size. When a trader places a buy or sell order, the AMM algorithm calculates the new price based on the change in the ratio of tokens in the pool. Low liquidity can lead to significant slippage, as large orders tend to cause imbalance.

Other factors leading to price slippage on AMMs relate to price volatility, Maximal Extractable Value (MEV) on Ethereum, blockchain throughput, front-running (prior knowledge) and sandwich attacks, among others.

How to fight price slippage in DeFi

Given that DEXs are more vulnerable to price slippage than CEXs, most of them integrate a feature that enables users to set the slippage tolerance percentage to limit the difference between the order price and the execution price. If the final price exceeds the limit, then the transaction is reverted. While this is a useful tool, low slippage tolerance would cause most large orders to fail, while higher tolerance can end up in an unfavorable trade.

See also  Curve Finance unveils new defi lending contracts

To reduce the risk of price slippage, DEXs have to ensure high liquidity in their pools. There is no DEX capable of competing with large CEXs in terms of liquidity, but DEX aggregators can do the trick. DEX aggregators ensure a high degree of liquidity by having access to multiple DEXs at once. Features like order splitting and order routing can further reduce the risk of price slippage.

YetAnotherDeFi (YAD) is a relevant example of a DEX aggregator. YAD is a multichain swap router that aggregates liquidity across six major blockchains, including Ethereum, BSC, Polygon, Avalanche, Fantom and Optimism. The platform enables traders to swap over 3,500 tokens at the best rates and with minimal transaction fees.

YAD leverages decentralized and noncustodial swap technology that enables traders to exchange tokens with minimal risk of price slippage.

By using YAD, traders can also reduce the risk of front-running, which happens when malicious actors exploit a blockchain’s mempool to get prior knowledge of the trading activity.

Unlike dark pools, which split large orders and mix them, YAD is decentralized and transparent, resulting in unmatched security for traders.

The bottom line

Price slippage is an inevitable factor for DeFi. It is one of the main drawbacks of the AMM model, decentralization and blockchain transparency. Traders should do their due diligence before selecting a DEX and employ all available tools to reduce the risk of price slippage and related losses.

DEX aggregators integrate all the available tools to reduce negative slippage and allow users to automate the trading process while keeping it transparent, decentralized and secure.

Learn more about Yad Finance

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

See also  What To Expect This Month For XRP Price According To Historical Data
aggregators DeFi DEX Price reduce slippage solution Ultimate
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

ETH to $4000, Bitcoin Price Rally, Altseason, ADA, XRP, SOL & More

2025-07-21

Why Bitcoin’s Price Really Matters

2025-07-15

Bitcoin Price All-Time High! Altcoin Frenzy: PENGU, PUMP, BONK & More!

2025-07-14

Chinese industry group warns Web3 and DeFi high-return deals hide classic Ponzi engines

2025-07-10
Add A Comment

Leave A Reply Cancel Reply

Top Posts
Blockchain

Blockchain in space

2023-05-17

Blockchain It is no secret that the space industry has been experiencing an unprecedented surge…

NFT

Snoop Dogg’s Iconic NFT Collection Unveiled by Clay Nation

2023-03-21

NFT Cardano NFT project Clay Nation has unveiled a new NFT collection, which it has…

DeFi

Cardano (ADA) Skyrockets in DeFi TVL Rankings, Here’s Potential Reason

2023-05-17

DeFi Cardano is climbing the DeFi TVL rankings. According to DefiLlama, Cardano sits in the…

Subscribe to Updates

Get the latest news and Update from CINN about Crypto, Metaverse and NFT.

Editors Picks

Altseason Ignites: Bitcoin Inflows, ETH Flip, and Saylor’s Bold Move

2025-07-22

Salty No-Coiner Hates Bitcoin

2025-07-22

Bull Run Kickoff – Bitcoin and Crypto Set to Soar

2025-07-22

Something BIG is About To Go Down…Got Bitcoin?

2025-07-22
Crypto Investor News Network
Facebook Twitter Instagram TikTok
  • Contact
  • Terms & Conditions
  • Privacy Policy
  • DMCA
  • Disclouser
© 2025 - All rights are reserved.

Type above and press Enter to search. Press Esc to cancel.

bitcoin
Bitcoin (BTC) $ 115,250.88
ethereum
Ethereum (ETH) $ 3,663.87
xrp
XRP (XRP) $ 3.07
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 764.82
solana
Solana (SOL) $ 178.07
usd-coin
USDC (USDC) $ 1.00
dogecoin
Dogecoin (DOGE) $ 0.225936
staked-ether
Lido Staked Ether (STETH) $ 3,662.04
tron
TRON (TRX) $ 0.314913
bitcoin
Bitcoin (BTC) $ 115,250.88
ethereum
Ethereum (ETH) $ 3,663.87
xrp
XRP (XRP) $ 3.07
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 764.82
solana
Solana (SOL) $ 178.07
usd-coin
USDC (USDC) $ 1.00
dogecoin
Dogecoin (DOGE) $ 0.225936
staked-ether
Lido Staked Ether (STETH) $ 3,662.04
tron
TRON (TRX) $ 0.314913