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Traders Can Now Find Better Prices with the Auto Router Launched By Uniswap.

Traders Can Now Find Better Prices with the Auto Router Launched By Uniswap.
Image Source: Twitter (@Uniswap)

Uniswap, on September 16th 2021, announced the launch of Auto Router in the Uniswap Interface. It aims to deliver better execution prices for the traders because it splits up the routes with the use of more data and factoring in gas fees.

The Auto Router is a new feature that uses the advanced smart order routing algorithm and finds better prices. Here, the users will have an option where their assets can split the routes across many pools in order to discover better prices for the trade.

Note that users can use the Auto Router in the Uniswap App, and they may disable it in the settings if they wish to.

Notably, Uniswap is an Ethereum-based crypto exchange having UNI as its governance token. What makes Uniswap different from leading crypto exchanges such as Binance and Coinbase is its fully decentralized nature. It means that the users have complete control over their funds and is also allows users to list their tokens without any fee.

Let’s briefly understand how Auto Router helps in the execution of better trades:

The very first thing that this Auto Router does is the splitting of the routes. It means that it splits the trades across various pools, unlike the legacy router, where only a single route is executed. Now, this router splits the routes and optimizes the prices because it takes advantage of liquidity depth in different pools.

Secondly, it also factors in gas costs for optimizing the effective price. It means that the traders can minimize the number of gas-intensive hops and reach the output token efficiently. So, technically, Auto Router only takes the extra hop if it is yielding the better price.

Uniswap also measured the improvement in the trades by Auto Router from June 1st and analyzed that the pricing was improved by 13.97% on all the trades.

Closing thoughts

This recent upgrade by Uniswap seems beneficial for many traders because it executes the trades across various pools for optimizing the best prices. Additionally, the shift to version 2 when it finds the better price in terms of gas costs is also pretty fascinating. This upgrade will definitely help the traders to execute the trades more efficiently due to optimization in gas cost.