DeFi Aggregator
In short: A DeFi aggregator lists transactions and offers from various DeFi platforms in one spot. Instead of visiting many decentralized exchanges or lending…
A DeFi aggregator lists transactions and offers from various DeFi platforms in one spot. Instead of visiting many decentralized exchanges or lending protocols one by one, a user compares and uses them through a single interface.
Why it matters
Liquidity in DeFi is spread across many protocols, so the best rate for a trade or a deposit is often split between several of them. Trade aggregators compare quotes from many decentralized exchanges and can route one order through several pools to get a better overall result. Yield aggregators such as Yearn.finance move deposits between lending and farming strategies, while dashboard aggregators show a wallet's positions across protocols on one screen. The convenience adds an extra layer of smart contract risk, so any token approval granted to an aggregator's contract deserves a careful look.
Example
A user wants to swap token A for token B. On one exchange the pool is small, so a large swap there would move the price a lot. The aggregator splits the order, sending part through that pool and the rest through two others, and the user signs a single transaction that can return more of token B than any one pool would have given on its own.