How to Use a Dex to Swap Cryptocurrency (10 Simple Steps)

Token swapping is a direct exchange where you swap one token for another at the current market rate, usually through a DEX (decentralized exchange) or automated market maker (AMM). It's quick, simple, and happens in one transaction.

Trading, on the other hand, typically refers to buying and selling on centralized exchanges (like Binance or Coinbase). It offers more complex features:

• You can set specific prices to buy or sell (limit orders)
• You can watch price charts and use trading tools
• You might hold positions longer while waiting for better prices
• You often trade against order books rather than liquidity pools
• You'll usually need to create an account and verify your identity

Here's a practical example: If you want to change your ETH into USDC quickly, you might use a token swap on Uniswap - it's fast and straightforward. But if you're trying to time the market or make profits from price movements, you'd probably trade on an exchange where you can use more sophisticated trading strategies.

A gas token is a special type of cryptocurrency that helps users save money on blockchain transaction fees (called "gas fees").

Here's how they work: When gas prices on networks like Ethereum are low, you can create (or "mint") gas tokens. Later, when gas prices are high, you can destroy (or "burn") these tokens to get a partial refund on your transaction fees.

Token swaps pack several key benefits that make them attractive for crypto traders:

• First, you'll save money on fees. Instead of paying multiple fees to trade one token for another through intermediate steps, you make one direct swap with a single fee. Think of it like a direct flight versus one with layovers - fewer stops means lower costs.

• Swaps also give you access to more tokens, especially smaller ones that might not appear on big exchanges. Plus, they're faster since you're making one transaction instead of several.

• You get more flexibility too - you can often swap any supported token for another without being limited to specific trading pairs. It's like being able to trade anything for anything else, as long as both tokens are on the platform.

• Finally, swaps can be more secure when you use non-custodial wallets and decentralized platforms since you're cutting out mediators and letting smart contracts handle the exchange automatically.