Understanding the intricacies of the Bitcoin market is difficult. Although a lot of information is available, it may be not easy to find articles that provide a clear and comprehensive overview of crypto exchanges, the trading process, the numerous factors driving coin prices, etc. Let’s briefly discuss the role of liquidity aggregation for crypto exchanges.
Simply put, liquidity aggregation is pooling liquidity from multiple sources into a single pool; This pool executes trades at lower costs than if each source was used individually.
How Does It Work In Practice?
For example, The current best bid price is $19,700, and the current best ask price is $19,800. If you order 1 BTC at the current best bid price, it will likely take some time to fill due to the limited liquidity available. Aggregating the liquidity from three exchanges into a single pool would result in a bid and ask price of $19,700, better than the best bid price on any individual exchange; This would increase our chances of getting our order filled quickly at a reasonable price.
How To Select The Right One
The first step in using aggregated liquidity is to find a reputable provider; This includes looking for a provider with a good industry reputation, security, customer support, and reasonable fees. Once you find a provider, you can sign up for an account and use the service.B2Broker’s MarksMan Liquidity Hub is a top-notch liquidity aggregator crypto that offers access to spot liquidity, top-of-book, and full-market depth prices. It features such as advanced order types, aggregated multiple exchanges, fast and reliable execution, low latency, flexible API, risk hedging, comprehensive reporting, and a dedicated support team. It is an excellent choice for those who need crypto liquidity solutions and want to take advantage of aggregated liquidity.