Token Swap

Definition ∞ A token swap is the exchange of one type of cryptocurrency token for another, often occurring on decentralized or centralized exchanges. This process permits users to trade assets within a single transaction without converting to fiat currency as an intermediary. It facilitates portfolio rebalancing, participation in new protocols, or conversion to a preferred asset. Token swaps are fundamental to the liquidity and functionality of the digital asset market.
Context ∞ Token swaps are a common activity in the digital asset market, frequently reported in news concerning trading volumes and decentralized exchange (DEX) activity. Current discussions often address the efficiency of swap mechanisms, associated gas fees, and the impact of slippage on large transactions. Future developments include advancements in cross-chain swap capabilities and layer-2 solutions, aiming to provide faster, cheaper, and more seamless asset exchanges across different blockchain networks.