# Smart Order Router

## Overview

The **Smart Order Router (SOR)** is a **core component of Mondrian Swap's technology stack**, designed to optimize **trade execution** by finding the **best possible prices** for users.

For any given trade, **the SOR determines the most efficient path**, ensuring minimal slippage and maximizing output. This **path optimization** can range from a **single direct swap** to **multi-hop transactions** across multiple liquidity pools.

By dynamically routing orders, the **SOR enhances capital efficiency**, ensuring that liquidity is utilized effectively across the **entire Mondrian Swap ecosystem**.

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## Single Swap & Multi-Hop: Utilizing All Available Liquidity

As **the number and diversity of pools on Mondrian Swap grow**, the **SOR becomes increasingly powerful** in executing trades efficiently.

Without a **Smart Order Router**, increased pool variety can lead to **liquidity fragmentation**, causing **higher slippage** for traders. However, with the **SOR**, every trade benefits from access to **the deepest available liquidity**, reducing **price impact**.

### 📌 **Key Benefits:**

✅ **Optimal price execution** for every trade.\
✅ **Access to fragmented liquidity** across multiple pools.\
✅ **Improved trading conditions for low-liquidity altcoins**.\
✅ **Multi-hop transactions** to find the most efficient swap path.

### 💡 **How Multi-Hop Works:**

* Instead of executing a **single swap**, the SOR **splits a trade** into multiple steps across **different liquidity pools** to achieve a **better overall price**.
* This ensures that **every dollar in any of Mondrian Swap’s pools contributes to trade execution**, as long as adding a **hop** reduces **slippage** and improves **output**.

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## How it Works

The **SOR’s optimization mechanism** finds the **best trading path** across a **set of Balancer-based liquidity pools**, considering:

✔ **Pool Depth** – Prioritizing pools with the highest available liquidity.\
✔ **Slippage Reduction** – Avoiding pools with significant price impact.\
✔ **Gas Cost Efficiency** – Ensuring that multi-hop transactions remain cost-effective.\
✔ **Arbitrage Opportunities** – Exploiting price differences across pools when possible.

By **continuously scanning and rebalancing trade routes**, the **SOR enables users to get the best possible execution for their swaps**—whether they’re swapping stablecoins, blue-chip assets, or low-liquidity altcoins.


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