Exact out Swap

Definition ∞ An exact out swap is a type of decentralized exchange transaction where the user specifies the precise amount of the output token they wish to receive. In contrast to an “exact in” swap, where the input amount is fixed, an exact out swap determines the necessary input amount of one asset to acquire a desired fixed quantity of another. This transaction type is particularly useful when a user requires a specific amount of a token for a subsequent operation or payment. Decentralized finance protocols calculate the required input based on current liquidity and exchange rates, accounting for potential slippage.
Context ∞ Exact out swaps are a common feature in decentralized finance (DeFi) protocols, providing users with greater control over their desired output when exchanging digital assets. A key discussion point involves the potential for increased slippage or transaction failures if liquidity is insufficient to meet the exact output requirement. Ongoing developments focus on improving routing algorithms and liquidity aggregation to ensure more reliable and efficient exact out swap execution.