What is a Token Swap in Cryptocurrency? Quick Guide
A token swap is the exchange of one crypto token for another without fiat currency, using smart contracts on exchanges.
Token swaps are of two types: Regular swaps on exchanges like Uniswap and Cross-chain swaps using bridges between networks.
On DEXs, users control assets via liquidity pools. On CEXs, trades happen through order books, resembling traditional stock exchanges.
Token swaps enable portfolio diversification and access to dApps across chains, making it easier to manage crypto assets.
Be cautious! Slippage in low liquidity markets and hacking risks on cross-chain bridges can lead to unexpected losses during swaps.
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