What is a DeFi aggregator?
A DeFi aggregator is a platform that searches multiple protocols simultaneously to find the best rates for a given action — whether that's the best yield for your stablecoins or the best price for a token swap.
Types of DeFi aggregators
Yield aggregators (Beefy Finance, Yearn Finance) automatically move your funds between protocols to maximise yield. They also auto-compound returns.
DEX aggregators (1inch, Paraswap) split your swap across multiple DEXs to get the best overall price, minimising slippage.
How yield aggregators work
- You deposit assets into the aggregator
- The aggregator's strategy contract deploys your funds to the highest-yielding protocol
- As yields change, the aggregator may move funds to better opportunities
- Earned yield is automatically compounded
Aggregator risks
- Additional smart contract layer — more contracts = more attack surface
- Strategy risk — the aggregator's strategy may not always find the best yield
- Gas costs — frequent rebalancing can consume yield in gas fees
Aggregators vs fixed-yield protocols
Aggregators optimise for maximum variable yield; fixed-yield protocols like TurboLoop optimise for certainty. The right choice depends on whether you prioritise maximum returns or predictable returns.