The Router in Soroswap Finance is a key component of the protocol that facilitates interactions with multiple Liquidity Pools. Liquidity Pools are always formed between two tokens, creating what are known as Pairs. For example, a pool might be between Token A and Token B, forming the pair A:B.
The Router allows for swaps between two tokens, even if there is no direct pair between them. This is where the Router's flexibility comes into play. Instead of performing a direct swap between Token A and Token C, the Router can find the best route using one or more intermediate pairs. For example:
- Direct Route: If a direct pair A:C exists, the Router can perform the swap directly between A and C.
- Indirect Route: If no direct pair is available, the Router can use a multi-hop route, such as A:B followed by B:C.
- Retrieve Pools: The Router first retrieves data on all available pools involving the tokens you wish to swap. This data is sourced from the backend database.
- Calculate Routes: Using the pool data, the Router calculates all possible routes for the swap, considering a maximum number of hops allowed between pairs.
- Optimize Route: The Router breaks down possible routes into segments and calculates the optimal swap for each segment. It then combines these routes and validates which offers the best overall exchange rate.
- Execute Swap: Finally, the Router selects the best route based on the amount of tokens to be received or sent and executes the swap.
The Router provides two main methods:
getPools(tokenIn, tokenOut): Retrieves information on available pools that include the specified tokens.getBestRoute(tokenIn, tokenOut, TradeType, ...options): Calculates and returns the best route for the swap between the specified tokens, considering trade type and additional options.
To ensure security, the Router uses a list of known and validated tokens. This prevents the use of malicious tokens in swap routes. Tokens used in a transaction are checked against this list to ensure they are reliable.