# Garuda Smart Route

## Smart Route

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Garuda Smart Route is an optional routing engine designed to optimize trade execution by dynamically searching for the most efficient execution path across available liquidity sources within the Garuda DeFi ecosystem and supported external DEXs.

When it activated, Smart Route will evaluate and compare execution outcomes from multiple liquidity sources, including:

#### 1. Internal Pair Routing (Multi-Hop)

Smart Route can search across available trading pairs on Garuda DeFi using multi-hop routing, supporting different route paths.

Examples:

* Direct Pair: `TOKENA → TOKENB`
* Multi-Hop: `TOKENA → TOKENX → TOKENB`

The routing engine automatically selects the route estimated to provide the most favorable execution outcome.

#### 2. Orderbook Matching

Smart Route can source liquidity from the Garuda Orderbook by estimating available matching orders to improve execution pricing when sufficient liquidity exists.

#### 3. External DEX Aggregation

Smart Route can aggregate liquidity from supported external DEXs, including:

* Terraswap
* Terraport

This allows traders to access a broader liquidity landscape beyond Garuda native pools.

### External Aggregation Fee

Transactions utilizing external DEX aggregation incur a 0.1% fee based on the offer asset amount.

Fee distribution:

* 50% → Protocol Fees (distributed to GDEX Shares)
* 50% → Garuda Development Fund

## ⚠️ Important Notes & Disclaimer

#### Trading Tax Disclaimer

* Quoted results may not always represent the final best execution price.
* Certain CW20 tokens implement transfer taxes or trading taxes, which may not be fully reflected within routing estimations.
* Traders are strongly encouraged to review and verify swap outcomes before confirming transactions.

#### Orderbook Estimation Behavior

* Orderbook estimates may not appear when the requested ask amount exceeds available orderbook liquidity.
* However, transactions can still be successfully executed if Smart Route determines that a direct liquidity pair route provides a viable execution path.
* In such cases, execution may utilize Garuda’s [Shared Price Improvement](/products/on-chain-order-book.md#shared-price-improvement) mechanism to optimize trade outcome.


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