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Liquidity Aggregation vs Flash Trade

Dubai, UAE, 30th November 2023, Kinetex dApp offers two modes of operation: Liquidity Aggregation and Flash Trade. These two modes of operation are a testament to the Kinetex team’s commitment to providing users with a comprehensive and user-friendly platform that can cover their crypto trading needs.

Liquidity Aggregation mode addresses the liquidity struggles that have plagued the DeFi industry for some time. With liquidity concentrated on popular centralized platforms, decentralized projects have struggled to provide enough liquidity for seamless operation. 

Kinetex has solved this issue by aggregating over 400 liquidity sources, including DEXes, DEX aggregators, cross-chain bridges, and protocols. Additionally, Kinetex has created a network of relay nodes to automate the swap process, making the app more user-friendly and efficient. 

Flash Trade mode, on the other hand, approaches cross-chain from a completely different angle. It solves several industry problems, including expensive gas fees, long execution times, and MEV attacks, by enabling direct trades between users and professional market makers. 

Let’s compare those two modes by looking at their approach to liquidity, speed, rates, asset and network coverage, and gas payments. 

Comparison

Kinetex users can access close to infinite liquidity through Liquidity Aggregation and Flash Trade. The former mode provides a way to aggregate liquidity across chains, while the latter relies on market makers, called resolvers in the Kinetex ecosystem, to offer sufficient liquidity to users. Resolvers can search for and compare liquidity from CeFi and DeFi platforms or even use their own funds.

Speed-wise, Flash Trade enables instantaneous swaps directly with market makers. If a swap exceeds 2 minutes due to some complications on a resolver’s side, a liquidation system is triggered to complete an order. 

Users can enjoy favorable rates in both modes. Liquidity Aggregation provides one of the best rates on the market thanks to search algorithms that automatically build optimal routes using aggregated liquidity sources. There is also the ability to modify slippage tolerance to suit user requirements. In Flash Trade, advantageous rates are possible due to the big competition among resolvers, which motivates them to offer better prices. 

Kinetex supports over 5,000 crypto assets across eight networks in the Liquidity Aggregation mode. In Flash Trade mode, liquidity depends on resolvers, which can source liquidity across DeFi and CeFi. 

Kinetex offers a gasless flow for both modes. In Liquidity Aggregation, users can pay gas fees using Universal Gasless. In Flash Trade, resolvers handle all gas payments for a more straightforward swap experience.

Conclusion

In summary, Liquidity Aggregation and Flash Trade are two modes that offer significant improvements to the crypto user experience. Despite the completely different approaches to executing transactions, these modes have a lot in common: they are designed to make swapping crypto more effortless and efficient for all users.

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