Zee27.
Plagiarized text with a little rewrite:
Token Swapping in Crypto:
The world of cryptocurrencies has introduced innovative methods for exchanging digital assets, and one such method is token swapping. Initially, token swapping, also known as decentralized exchange (DEX) trading, was exclusive to decentralized exchanges. Notwithstanding, it's surprising to note that some centralized exchanges have also started offering token swapping services. This article aims to explain the concept of token swapping, its underlying principles, and how it has expanded to include centralized exchanges.
Understanding Token Swapping:
Token swapping involves exchanging one cryptocurrency token for another. It allows users to trade digital assets directly without relying on a centralized intermediary, such as a traditional stock exchange. Instead, the swapping process occurs through smart contracts on blockchain networks. These smart contracts ensure secure and transparent transactions, giving users more control over their trades and eliminating the need for intermediaries.
How Token Swapping Works:
Let's break down the process of token swapping into simple baby steps: 🍼
1. Decentralized Exchange (DEX) Token Swapping:
- Connect Your Wallet: Users connect their digital wallets to a decentralized exchange platform that supports token swapping.
- Select Tokens: Users choose the tokens they want to swap. For example, if you have $SHIB and want to acquire $DOGE, you simply select these two tokens.
- Set Transaction Parameters: Users specify the amount of the token they want to swap, along with additional parameters like the acceptable exchange rate or transaction deadline.
- Initiate the Swap: Users confirm the transaction, and the smart contracts of the decentralized exchange platform search for a suitable trading partner.
- Execute the Swap: Once a match is found, the smart contract automatically transfers the agreed-upon amount of the token from the user's wallet to the counterparty's wallet. Simultaneously, the agreed-upon amount of the other token is transferred to the user's wallet.
2. Centralized Exchange Token Swapping:
Traditionally, centralized exchanges operated differently, requiring users to deposit their funds into the exchange's custody. However, some centralized exchanges now offer token swapping services.
- Account Creation: Users create an account on the centralized exchange and complete the necessary verification process. Note that not all centralized exchanges provide swapping functions.
- Deposit Funds: Users deposit their desired tokens into their exchange wallet. For instance, if you have ETH and want to acquire BTC, you'll have to deposit ETH into your exchange wallet.
- Select Tokens and Trade: Users navigate to the token swapping section within the exchange platform and choose the tokens they wish to swap (ETH and BTC as stated in our example). They specify the amount of ETH they want to exchange.
- Execute the Swap: The centralized exchange platform matches the user's trade with another user or uses its own liquidity pool. The swap is executed accordingly, and the exchanged tokens are deposited into the user's wallet within the centralized exchange.
Expanding Token Swapping to Centralized Exchanges:
While decentralized exchanges were initially the primary venues for token swapping, some centralized exchanges have recognized the demand and introduced token swapping services on their platforms. This expansion offers users additional options to conveniently trade their tokens. It caters to those who prefer centralized exchanges or already have existing accounts with them. Users can now enjoy the benefits of token swapping while leveraging the features and infrastructure provided by centralized exchanges.
Finally, token swapping has revolutionized the way cryptocurrency traders exchange digital assets, enabling secure and efficient transactions without relying on intermediaries. While token swapping was initially limited to decentralized exchanges, some centralized exchanges have now embraced this concept. This expansion provides users with more choices and flexibility in trading their tokens, catering to different preferences and trading strategies. Whether utilizing decentralized or centralized exchanges, token swapping continues to evolve, contributing to the growth and accessibility of the crypto ecosystem.
Original text from https://www.nairaland.com/7898068/understanding-token-swapping-crypto-exploring:
Today I want to help those who might find this topic interesting to understand a concept known as crypto swapping. please do not hesitate to leave your comments, inputs and questions in the comment section in order to help others learn further.
Cryptocurrencies have introduced innovative ways to exchange digital assets, and token swapping has become a popular method for traders. Initially, token swapping, also known as decentralized exchange (DEX) trading, was exclusive to decentralized exchanges but to my amazement, recently, some centralized exchanges have also started offering token swapping services. In this article, we will explore the concept of token swapping, its working principles, and how it has expanded to include centralized exchanges as well.
Understanding Token Swapping:
Token swapping refers to the process of exchanging one cryptocurrency token for another. It allows users to trade digital assets without relying on a centralized intermediary like a traditional stock exchange. Instead, the swapping occurs directly between users through smart contracts on blockchain networks. These smart contracts ensure secure and transparent transactions, providing users with increased control and eliminating the need for a middleman.
How Token Swapping Works:
To understand the concept of token swapping, let's break it down into simple steps:
1. Decentralized Exchange (DEX) Token Swapping:
- Connect Your Wallet: Users connect their digital wallets to a decentralized exchange platform that supports token swapping.
- Select Tokens: Users choose the tokens they want to swap. For instance, if you have $SHIB and is in need of $DOGE, you simply select these two tokens.
- Set Transaction Parameters: Users specify the amount of Token A they want to swap, along with any additional parameters such as the acceptable exchange rate or transaction deadline.
- Initiate the Swap: Users confirm the transaction, and the decentralized exchange platform's smart contracts search for a suitable trading partner.
- Execute the Swap: Once a match is found, the smart contract automatically transfers the agreed-upon amount of Token A from the user's wallet to the counterparty's wallet, and simultaneously, the agreed-upon amount of Token B is transferred to the user's wallet.
2. Centralized Exchange Token Swapping:
Traditionally, centralized exchanges operated differently, requiring users to deposit their funds into the exchange's custody. However, some centralized exchanges have now introduced token swapping services.
- Account Creation: Users create an account on the centralized exchange and complete the necessary verification process. Note that not all centralized exchanges offer swapping functions.
- Deposit Funds: Users deposit their desired tokens into their exchange wallet. For example, if you have Token A and want to acquire Token B, you deposit Token A into your exchange wallet.
- Select Tokens and Trade: Users navigate to the token swapping section within the exchange platform and select the tokens they wish to swap (Token A and Token B in our example). They specify the amount of Token A they want to exchange.
- Execute the Swap: The centralized exchange platform matches the user's trade with another user or uses its own liquidity pool, and the swap is executed accordingly. The exchanged tokens are then deposited into the user's wallet within the centralized exchange.
Expanding Token Swapping to Centralized Exchanges:
While decentralized exchanges were initially the primary venues for token swapping, some centralized exchanges have recognized the demand and introduced token swapping services on their platforms. This expansion offers users additional options to trade their tokens conveniently, especially for those who prefer centralized exchanges or have existing accounts with them. Users can now enjoy the benefits of token swapping while leveraging the features and infrastructure provided by centralized exchanges.
Summarily, token swapping has transformed the way cryptocurrency traders exchange digital assets, enabling secure and efficient transactions without relying on intermediaries. Initially limited to decentralized exchanges, token swapping has now been embraced by some centralized exchanges as well. This expansion provides users with more choices and flexibility in trading their tokens, catering to different preferences and trading strategies. Whether utilizing decentralized or centralized exchanges, token swapping continues to evolve, contributing to the growth and accessibility of the crypto ecosystem.
Due to that it was published today as well I'll add a picture to show the relative time on that forum: so this text was published on the nairaland forum about two hours ago and plagiarized version about an hour ago. So it was published there an hour before he rewrote it here.