Transaction routing issues

Developers
1

Why do exchanges built on the Internet Computer require direct swaps within specific liquidity pools, such as swapping ETH for USDC within a dedicated ETH/USDC pool, rather than allowing transactions to route through different pools? This limitation complicates liquidity management, as each pair requires a separate pool, preventing efficient liquidity sharing across the platform. What are the underlying technical reasons for this constraint, and are there any planned or potential solutions to enable more flexible transaction routing across different token pools on the Internet Computer? @ICPSwap @cakemaker1

1 Like
2

Hello Forreal! The IC ecosystem differs from Ethereum’s EVM, where each transaction on the Ethereum network is executed within a single block.

While the development complexity isn’t particularly high, this process may not deliver the best results, especially in terms of swap speed.

image
image1173Ă—672 142 KB

Additionally, if we implement routing, we would need to develop client-side routing, which could lead to several issues:

  1. The transaction time could become excessively long.
  2. There may be significant price differences during the transaction.
  3. If any step of the swap transaction fails, or if slippage causes the transaction to stop, the previous transactions cannot be rolled back, potentially leading to a loss of user assets.
3

The ICPSwap team will continue working alongside IC ecosystem community developers, under the guidance of the DFINITY technical team, to explore ways to create an even better, more user-friendly trading experience.

1 Like
4

We definitely need better DeFi trading experience on the IC. It’s one of the few things that’s holding the DeFi ecosystem back. Especially once you start comparing it with different ecosystems that have 1-2 seconds swap speed.

1 Like