How to Use Crypto | Swapping Explained

Swapping refers to the process of exchanging one cryptocurrency for another, either directly or through a decentralized platform, without using a traditional exchange. Swapping allows users to trade between different types of cryptocurrencies, usually quickly and with minimal fees, depending on the platform or method used.

Advantages of Swapping

• Speed: Swaps are often faster than traditional trades on centralized exchanges

• No Middlemen: Swaps through decentralized platforms mean users don’t rely on a central authority or exchange, reducing fees and improving privacy.

• Variety: Swapping allows users to easily move between different cryptocurrencies, even lesser-known or newly launched tokens.
  

Risks of Swapping

• Slippage: The price of a cryptocurrency may change between the time a swap is initiated and when it completes

• Liquidity: Some tokens might not have enough liquidity in the pool, which could result in a less favorable exchange rate or an inability to complete the swap.

• Smart Contract Risks: Swapping through DEXs relies on smart contracts, which could have bugs or vulnerabilities.