Sometimes, you may be exchanging two tokens that do not have liquidity on the same Dex simultaneously. For example, you want to trade from $YAK to $ELK. Liquidity pairs involving $YAK are on Pangolin, Trader Joe, Lydia, etc. However, these Dex’s have minimal $ELK liquidity. A direct swap from YAK to $ELK on these platforms would result in a huge loss. Most liquidity of $ELK are on ELK. A two-path swap from $YAK to $AVAX on Pangolin first and then from $AVAX to $ELK on ELK could avoid the huge loss.