Token Swap

A token swap is a trade in which a user exchanges one crypto token directly for another, such as ether for a stablecoin, without first converting to ordinary money. Most swaps take place on a decentralized exchange, where an automated market maker sets the price from the balance of tokens in a liquidity pool, and the trade settles in the user's own wallet in a single transaction. DEX aggregators search many pools to find the best rate, and wallets often build a swap feature in. The user pays network fees and a pool fee, and may receive a slightly different amount than quoted because of slippage, which is limited by a tolerance setting. Swaps across different blockchains require a bridge or cross-chain protocol. In a second sense, "token swap" describes a token migration, when holders exchange an old token for a new version.