Asset Swapping

Definition ∞ Asset Swapping describes the exchange of one digital asset for another. This process can occur directly between participants or through decentralized exchanges and automated market makers on blockchain networks. It aids portfolio rebalancing and access to diverse digital assets without requiring traditional intermediaries.
Context ∞ Asset swapping is a core function within decentralized finance, allowing users to trade various tokens efficiently. The effectiveness and expense of these swaps are often central to news reports, particularly concerning gas fees on congested networks or slippage on liquidity pools. Innovations in cross-chain interoperability aim to make asset swapping even more smooth and economical.