It is evident there is still plenty of work to be done prior to making cryptocurrency mainstream. The Dimensions Network team has come up with something it refers to as the Exchange Liquidity Aggregator. It is an interesting concept that could eventually make its way to other projects as well.
What is the ELA?
As the name somewhat suggests, the Exchange Liquidity Aggregator lets traders and investors buy and sell cryptocurrency at top prices. There is no need to register with multiple exchanges separately, Instead, all of the liquidity offered by these top exchanges will be pooled together to optimize price discovery, eliminate massive price fluctuations on individual platforms, and so forth.
How Does it Work?
Connecting different exchanges to one another will not be an easy feat. The Exchange Liquidity Aggregator will connect various trading platforms and use their existing liquidity in order to buy and sell currencies on other exchanges. Even though individual prices may vary, the ELA will be able to guarantee the best price at any given moment.
The team is confident the ELA will offer quite an appealing solution for investors and traders. In particular, those looking to buy or sell large amounts of cryptocurrency can benefit from this concept. It is somewhat similar to dark pools, but in a public manner, rather than keeping things off the books. Large orders are spread out over multiple exchanges to minimize the impact of buying or selling.
As one would expect, the Exchange Liquidity Aggregator is valuable to speculators as well, which means new arbitrage opportunities are in store. While it may not make traders millions overnight, it is still an interesting option to look into. That is, assuming this solution makes a big impact in the cryptocurrency industry.
One of the aspects potentially holding the Exchange Liquidity Aggregator back is that it will operate exclusively on the Dimensions Network. That is not necessarily of great appeal to a lot of cryptocurrency traders, even though its global order book is well worth taking note of. Shared liquidity will help cryptocurrency mature as a whole, as long as this concept is convenient to access and easy to use.