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TradingIntermediate·5 min read

How Swap Routing Finds a Better Path

Routing is an optimization problem. The best path depends on available liquidity, fees and trade size, so the most direct pool is not always the cheapest route.

Key idea

A route is useful only if the final output, fees and minimum received are better for your specific trade size.

01

One pool is not always enough

Price impact grows as a trade consumes a pool. Splitting size across deeper venues can improve the combined result even when one pool has the best headline price.

02

Intermediate assets can help

A route may pass through a liquid intermediary when two smaller steps produce a better output than a thin direct pair.

03

Judge the finished route

Compare expected output, fees, price impact and minimum received. The path itself is secondary to what the complete transaction gives you.

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