DEFI LESSON: FRAGMENTED LIQUIDITY AND 1INCH

Summary from the TLDR Crypto newsletter

Fragmented liquidity is a condition in the DeFi market where liquidity is dispersed among various trading platforms instead of being concentrated in one pool. This can create challenges in finding sufficient liquidity, executing trades at desired prices, and ensuring efficient trading across different protocols. To address this, 1inch, a liquidity aggregator, combines liquidity from multiple exchanges and protocols to provide users with optimal prices and efficient transactions. By aggregating liquidity and splitting trades across different pools, DEX aggregators minimize slippage and maximize price efficiency.