Token Conversion

Definition ∞ Token conversion is the process of exchanging one type of digital token for another. This can occur within a single blockchain ecosystem, such as swapping a governance token for a utility token, or across different chains via bridge protocols. Conversions are often necessary for users to access specific functionalities, participate in decentralized applications, or optimize their digital asset portfolios. The efficiency and security of token conversion mechanisms are vital for interoperability and user experience.
Context ∞ The ability to perform seamless token conversions is a key aspect of liquidity and functionality within the broader decentralized finance landscape. Ongoing developments in cross-chain bridge technology aim to make these conversions more efficient and secure, reducing friction for users. News frequently covers updates to conversion protocols and their impact on ecosystem growth and asset utility.