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Liquidity aggregation Meaning

The process of "pooling" liquidity from multiple different sources (exchanges, pools, and protocols) into a single interface. The goal is to ensure that a trader always gets the best possible price by scanning every available market simultaneously.

Because the digital asset market is "fragmented" (liquidity is spread across dozens of different DEXs), a single pool might not have enough money to handle a large trade without massive slippage. Aggregation solves this by "splitting" the trade-buying 20% from Uniswap, 30% from Curve, and 50% from SushiSwap-to get the lowest average price.

Liquidity aggregation is a "win-win" for the ecosystem. It makes the market feel more "unified" and ensures that liquidity providers in smaller pools still get "volume" from traders who are using an aggregator.

It is the foundational technology for "DEX Aggregators" like 1inch and Jupiter.

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