What drives great trading on a DEX? Liquidity. The deeper it goes, the better the trade execution and the lower the slippage. However, traditional DEXs often face fragmented liquidity across various platforms and pools. PancakeSwapX changes the game with liquidity aggregation, pulling liquidity from multiple sources to provide users with better execution on every trade.

What is Liquidity Aggregation?

Liquidity aggregation refers to the process of sourcing liquidity from multiple venues —both internal and external—rather than relying on a single pool. PancakeSwapX combines liquidity from its AMM pools, other DEXs, and external liquidity providers. By tapping into multiple sources, PancakeSwapX can locate more competitive pricing for trades.

How Does It Work in PancakeSwapX?

1. Internal and External Liquidity Sourcing: PancakeSwapX first assesses the available liquidity. It dynamically routes trades through those sources if better liquidity or pricing is available from external DEXs or liquidity providers. This enables trades to be executed at the most favorable price for the user.
2. Minimizing Slippage: PancakeSwapX reduces the impact of slippage by pulling liquidity from multiple sources. This approach minimizes the price impact for larger trades, where liquidity is essential.
3. Automatic Liquidity Routing: The platform automatically calculates and selects the better liquidity source, meaning users do not have to manually choose liquidity pools or worry about price discrepancies.

Benefits of Liquidity Aggregation for Traders

• Optimal Pricing: Liquidity aggregation helps traders locate a better execution price for their trades. The system dynamically selects the most liquid venue, which results in more favorable execution.
• Reduced Slippage: Slippage can be high for high-volume trades. By aggregating liquidity from various sources, PancakeSwapX helps locate the best liquidity option, minimizing slippage and smoother trade execution.
• Efficient Execution Across Chains: With support for Ethereum and Arbitrum at launch, PancakeSwapX’s liquidity aggregation allows traders to benefit from the most liquid sources across those chains.
• Availability of a wide range of tokens: PancakeSwap can locate more tokens for users to trade by aggregating liquidity from multiple sources. Even if a token has no liquidity on PancakeSwap, users can still trade it through PancakeSwapX, which routes liquidity from various sources.

Liquidity aggregation in PancakeSwapX represents a significant improvement over traditional DEX models. PancakeSwapX helps traders locate better execution pricing, reduced slippage, and deeper liquidity by pooling liquidity from multiple sources. This results in a more efficient and cost-effective trading experience, giving traders confidence that their trades are optimally executed.

PancakeSwapX Directory

• Introducing PancakeSwapX: Zero-Fee & Gasless Swaps on Ethereum and Arbitrum
• Why PancakeSwapX is the Upgrade DeFi Traders Have Been Waiting For
• Getting Started with PancakeSwapX: A Beginner’s Guide
• PancakeSwapX’s Liquidity Aggregation: Benefits and Implications
• The Mechanics of Gasless Swaps: How It Works in PancakeSwapX
• MEV Protection: Safeguarding Your Trades using PancakeSwapX