Dubai, UAE, 28th December 2023, The team at Kinetex has developed Liquidity Aggregation to tackle common challenges faced in the DeFi field. Famously, liquidity is spread out across numerous networks and pools, creating difficulties for users trying to navigate the crypto space and trade their assets in the most efficient way possible. The team has implemented a cutting-edge aggregation solution to address this problem and make accessing liquidity more effortless for everyone.
The Kinetex Aggregation brings together all the dispersed liquidity in one place, simplifying the user experience by allowing them to access everything they need in just one click. This approach saves users valuable time and effort by streamlining the complex process of managing their cryptocurrencies across blockchains.
Let’s look at the Kinetex Aggregation Protocol from a more technical perspective.
Protocol Architecture
The Kinetex Aggregation solution consists of four layers, each with a specific important role.
The first layer, called the Aggregation Layer, handles the task of collecting a wide range of solutions to ensure adequate liquidity for trouble-free trading of thousands of crypto assets around the clock. These solutions include DEXes, DEX aggregators, cross-chain bridges, various protocols, and more. By bringing together such diverse options, Kinetex enables users to quickly secure the necessary liquidity without ever leaving the Kinetex dApp.
The Routing Layer creates optimal swap routes using aggregated liquidity sources. All essential data (quotes, fees, etc.) is accumulated and examined to construct the most optimal routes. Then, the Routing Layer generates data for launching the Kinetex Aggregation mode’s on-chain infrastructure.
Moving on to the third layer, the UI Layer is responsible for the experience users receive while interacting with the Kinetex dApp. With its flexible and easy-to-use interface, users can smoothly navigate the swapping process, starting with selecting the crypto assets they wish to swap, configuring the swap parameters, viewing the route and cost details, and monitoring the swap status.
The fourth layer in this architecture is called the Execution Layer. Its main responsibility is completing user swaps using smart contracts and the infrastructure necessary for their deployment. It is done with the assistance of Kinetex relay nodes, which run Kinetex Aggregation contracts on all supported networks.
Main Benefits
The Kinetex Aggregation Protocol is equipped with several benefits that make it an ideal option for trading crypto. It comes with an interface that is easy to use, automated swaps execution, built-in route building, gasless flow, and continuous liquidity. Let’s focus on two main benefits that are the most interconnected with the four-layered architecture of this solution discussed above.
Firstly, Kinetex simplifies cryptocurrency transactions by utilizing relay nodes to automate their execution and estimate all gas costs associated with swaps. Thus, Kinetex eliminates the need for users to remain online during transaction execution, manage native coins for gas payments, and make fee calculations themselves.
Secondly, Kinetex has routing algorithms that analyze all available liquidity sources to build the most profitable and time-efficient routes. This feature eliminates the need for users to manually compare rates and create routes, saving them a lot of time and energy. Significantly, Kinetex’s algorithms can increase user profits further by splitting the swap and using several liquidity sources simultaneously.
Final Thoughts
Kinetex’s Aggregation Protocol achieved exceptional efficiency and accessibility thanks to its four-layered architecture. It allowed Kinetex to address some of the most common issues users encounter while using DeFi products and services. For instance, it helped simplify complex interfaces that are often too challenging for ordinary users and enabled Kinetex to overcome the problem of insufficient liquidity often spread out across blockchains. Lastly, the intricate swap process that usually poses a challenge to users was made more straightforward, thanks to relay nodes.
While users enjoy swapping with Kinetex’s Liquidity Aggregation mode, the team is preparing to launch Flash Trade soon. It is an innovative solution from Kinetex that offers a new crypto trading approach.
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