Swap

A swap is the process of exchanging one cryptocurrency for another without using an intermediary like a centralized exchange. It is most commonly done through decentralized exchanges (DEX), where users can trade tokens directly via smart contracts. Swaps often operate on the AMM (Automated Market Maker) model, where liquidity is provided by users depositing funds into liquidity pools.

Swaps allow users to quickly exchange assets without registering on an exchange or going through complex procedures. This mechanism is essential in the DeFi ecosystem, enabling easy crypto portfolio management and trading on decentralized markets. However, swaps may involve network fees and price volatility risks.