How To Swap Tokens | The Beginner’s Guide to Token Swaps-So many beginners in the crypto space face this dilemma of been able to know the means of tokens swap, Our team were prompted to write on this article because of series of questions and comment on the method of tokens swap and i must tell you we have done justice to this article just to make sure you can successfully swap your token without hesitation.
As you know the crypto industry is build towards a simple way to easily buy, store and handling all your digital assets. This prevailing method has directly improved user experience and eliminated some of the complexities once attributed to the emerging sector. One of such innovative advancements came in the form of token swaps, designed to reduce the overhead cost and the time required to exchange one crypto asset for another and most times that can be done without any difficulty but in some cases charges or fees may apply.
Without wasting much of your time, Though not many seems to understand this funtionlity but for those who wants to and wishes to carry out the function, Below is the guide.
How To Swap Tokens | The Beginner’s Guide to Token Swaps
For example, if you want to exchange your COMP coin to ZIL, you will most likely discover that exchanges that provide the COMP/ZIL trading pair are few and far between. As such, you may have to first trade your COMP tokens for fiat currencies or other established coins like BTC, ETH and USDT. From there you can exchange the popular coins or fiat directly to ZIL.
You will agree that this process is long and cost-ineffective. To execute such a trade, you would have to pay transaction fees at least more than once. Also, it is impossible to gauge how price volatility can impact the profitability of the trade. Remember that the prices of crypto assets are often volatile. Therefore, the above-mentioned approach could make it difficult to achieve your desired price entry.
In light of these drawbacks, exchanges, wallets, and other platforms began enabling instant swap functionalities. With this, users can exchange a crypto asset for another directly. All you need to do is enter the amount you want to exchange and your desired trading pair and the token swap service would instantly process and convert your coin. With this form of transacting, you only have to pay transaction fees once.
Platforms with token swapping offer a convenient and secure crypto-to-crypto gateway: you can do all the exchanging you want from either a custodial or non-custodial wallet. Depending on the robustness of your wallet, you may not need to transfer your coins to a crypto swapping service or exchange before accessing an instant crypto-to-crypto exchange feature. Wallet providers often incorporate crypto swapping services so that users can convert their coins securely from their personal wallets.
Essentially, what such crypto swapping services bring to the table is simplicity, speed, affordability and security. Some even go as far as allowing users to buy cryptocurrencies with credit or debit cards.
Examples of solutions offering dedicated crypto swapping services are Changelly, Shapeshift, ChangeNow,and Simpleswap. Exchanges and wallets have also begun to create their in-house swapping services. Moreover, the DeFi craze of 2020 further spurred the emergence of DeFi token swap solutions. The same trend is currently sweeping across the NFT market. When it comes to token swaps, the options are practically unlimited.
Owing to the explosion of swapping services, it has become increasingly important to carry out due diligence before choosing one. Things to look out for include the availability of a wide array of crypto pairs, the security prowess of the platform and the speed at which coins are swapped. Note that high speed negates the possibility of slippage. Slippage occurs when the number of cryptocurrency A you receive in exchange for another cryptocurrency B steeply declines before the transaction is finalized.
It is worth mentioning that some services eliminate slippage by offering fixed swap rates that are held from the start of the transaction to its finalization. The only added requirement of such offers is that you may have to pay a higher transaction fee.
What Are Token Swaps?
A token swap has two distinct definitions within the crypto sphere. The first connotes the process of instantaneously exchanging one cryptocurrency to another without having to first undertake a crypto-to-fiat exchange. This definition encapsulates the workings of prominent platforms like Changelly, Shapeshift and Airswap.
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