Router

We’ll take a look at how the Router Hook works in the example used for the Looping Leverage Hook. In the step where the FlashBorrowed XY is used to acquire PT-USDe, the Router Hook kicks in. Here, the Router Hook finds the optimal pathway for wapping XY to PT-USDe. It’s easy to think of the Router Hook as an aggregator, in that it analyses pathways to find the best and most cost-efficient pathway before executing the transaction.

A key difference from a typical aggregator however, is the Router Hook’s ability to determine and execute the groundwork necessary before making a swap. For example, if there was a request to swap aUSDT to XY:

1. Check if there is sufficent liquidity to directly swap from aUSDT

2. If not, go to Aave to withdraw USDT from the aUSDT

3. Swap USDT to XY

Benefits

Dynamic Flexibility: The Router Hook allows for real-time decision-making, optimizing routes and execution paths based on evolving market conditions and liquidity depth

Improved Efficiency: Automating routing decisions and optimizing transaction pathways reduces operational complexity and potentially minimizes gas costs.

Composability: The Router Hook facilitates seamless integrations across protocols, enabling complex multi-step workflows and enhancing interoperability within DeFi.

User-Friendly Automation: Users benefit from streamlined processes where optimal pathways are executed without requiring manual intervention or technical expertise.