A token swap, or crypto swap, is like trading your favorite Pokemon cards with anyone you like online. But instead of trading cards, you can trade digital crypto assets in exchange for your favorite crypto tokens, often, without a conventional centralized crypto exchange.
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In this article, we take a deep dive into crypto token swaps, common types of swaps, how they work, and how you can perform a crypto swap easily.
What is a crypto swap?
What is a crypto swap?
A crypto swap is an exchange of cryptocurrencies usually performed on dedicated swap platforms, or decentralized exchanges (DEX).
Instead of going the traditional way of selling a fiat currency for a crypto token, you can directly swap crypto tokens. This is helpful especially if you want to avoid KYC restrictions and don’t want to pay additional fees associated with centralized crypto exchanges.
Swapping tokens in crypto can be done on the same blockchain or across different blockchains, a feature offered by almost every decentralized crypto swap platform. Swapping cryptocurrencies is an ideal way to rebalance your crypto holdings, or step foot into the exciting world of decentralized finance (DeFi) where lending and borrowing can be a game changer for many users.
Types of Token Swaps
Token swaps can have many types, but the most common and important categories include on-chain and off-chain swaps.
Centralized exchanges usually carry out off-chain swaps, facilitating the transaction inside their own database as opposed to on a public ledger. Although this kind of token swap is quicker and might have cheaper costs, it presupposes confidence in a centralized exchange.
On the other hand, on-chain swaps take place solely on the blockchain and manage user-to-user transactions via smart contracts. These on-chain swaps are very com
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Author: Hassan Shafiq
