Multi-Hop Swap
A DEX trade that routes through multiple liquidity pools or token pairs to achieve the desired swap, optimizing price and reducing slippage.
What is Multi-Hop Swap?
Multi-hop swaps involve chaining multiple token swaps (e.g., ETH → DAI → USDC) to fulfill a trade when a direct pool is unavailable or suboptimal. DEX aggregators like 1inch or Matcha use algorithms to identify efficient paths across pools on chains like Ethereum or Polygon. In 2025, 1inch processes $1 billion weekly in multi-hop trades, reducing slippage by 0.5% versus direct swaps, per DeFiLlama. For example, swapping 5 ETH (~$15,000) to USDT via WETH/DAI and DAI/USDT on Uniswap V3 might save $150 versus a single pool with 1% slippage. Gas costs rise slightly ($7 vs. $5 on Ethereum), but layer-2 hops on Arbitrum cost $0.50. A 2023 multi-hop exploit inflated fees by 5% due to flawed routing logic. Users should use aggregators with audited routers to optimize trades in DeFi’s fragmented liquidity landscape.
Related Terms
Cryptocurrency
Digital currencies and assets secured by cryptography and operating on decentralized blockchain networks without central authority.
Gas Price
The amount of Ether (ETH) a user is willing to pay per unit of gas for a transaction on Ethereum.
Ledger
An immutable, distributed digital record of transactions maintained across network nodes.
Cross Margin
Margin shared across all positions in a trader’s account to cover losses.
Custody
Secure storage and management of digital assets by qualified third-party institutions, ensuring protection against theft and unauthorized access.
Legal Tender
Currency mandated by law for debt settlement, including digital forms.