Token Swaps

Swap tokens on decentralized exchanges without banks

If you have ever converted currencies, you probably needed to visit a bank or bureau de change to trade one currency for another e.g, Euros for United States dollars, and you’ll pay significant fees for the transaction.

Token swaps on DEXs are permissionless and instant. No paperwork, approvals, or banking hours required.

On blockchains, since everything is permissionless, you can easily trade any token for another in an instant swap.

A token swap is the direct exchange of one token for another on-chain using a decentralized exchange (DEX). You don’t need to sign any paperwork or wait for a banker to approve it manually. All it takes is a few clicks in your wallet, and the swap is executed automatically by smart contracts.

How Token Swaps Work

1. Visit a DEX

   First, you’ll need to visit a DEX, trading terminal or an aggregator (recommended: a type of app that gets the best rates across multiple DEXs) to swap coins.

   In this case, we will use Nexa. A trading terminal on the Sui blockchain where you can swap.

   Then select or search the coin you want to swap.

   
2. Access the Swap Interface

   Navigate to the swap interface and select the tokens you have and the ones you need to get (swap to).

   
3. Adjust Your Swap Settings

   Every swap interface should have some settings for you to adjust the configurations for your swap. Usually, these would be set to their most optimal settings.

   You can toggle them to set slippage tolerance, MEV Protection, and other advanced options based on your preferences.

   Start with 0.5% slippage for stable pairs and 1 to 3% for volatile tokens to avoid failed transactions.

   • Slippage tolerance: The maximum price change you’re willing to accept between when you submit and when your swap executes. If the price moves beyond this, the transaction will fail to protect you from unexpected losses.
   • MEV Protection: Helps stop bots or other traders from jumping ahead of your swap to take advantage of you. It makes your transaction safer and fairer.

   High slippage tolerance can result in significant losses due to price impact. Always check the estimated output before confirming.

   
4. Execute the Swap

   Step 4: Click on the Swap button on the interface to exchange the coins. You should receive the amount of coins shown on the swap interface in return.

   That’s how easy it is to trade. No barriers, just you and your internet connection and you can bank.