Trading & AMMs
Swap
Token Swap
Direct exchange of one cryptocurrency for another
Definition
A swap is the direct exchange of one cryptocurrency for another, typically executed through AMMs or DEX aggregators without requiring order books or counterparties.
Example
Swapping 1 ETH for 2,000 USDC on Uniswap using the protocol's automated market maker.
What to check
Treat it as a trading concept: compare expected benefit with fees, slippage, liquidity, volatility, and execution risk. The main checks are: Slippage; Failed transactions; MEV extraction.
Risks to Consider
- Slippage
- Failed transactions
- MEV extraction
Common Questions
What does Swap mean in DeFi?
Swap means Direct exchange of one cryptocurrency for another. The useful question is not only the definition, but how the mechanism changes risk, return, liquidity, or governance for the user.
How is Swap used in practice?
A practical example: Swapping 1 ETH for 2,000 USDC on Uniswap using the protocol's automated market maker.
What should I check before relying on Swap?
Check slippage, failed transactions, mev extraction. Also verify liquidity, oracle assumptions, admin controls, and whether the protocol has been tested during stressed markets.
