The word Swap means exchange, conversion, or replacement. One of the most interesting features of the cryptocurrency market is the ability to swap one cryptocurrency for another without needing an account on a centralized exchange and without sending assets to an exchange.

The swap feature exists in some cryptocurrency wallets. In some centralized exchanges, there is also a similar feature. However, Swap is one of the core features of decentralized exchanges (DEXs).

Decentralized exchanges allow crypto market participants to connect their wallets directly to a DEX website and exchange their tokens or coins for other tokens or coins. However, many features such as limit orders are usually unavailable—unless using advanced DEXs such as PancakeSwap or Raydium. In my opinion, in the future, all decentralized exchanges will provide limit order functionality.

Convert on centralized exchanges
On many centralized exchanges such as Binance, there is a feature called Convert. Through this feature, users can send a certain amount of one cryptocurrency held in their exchange wallet and receive an equivalent value of another cryptocurrency.

The conversion rate is calculated based on the prices of both cryptocurrencies and displayed before confirmation. Like other exchange operations, Convert includes a fee, which is shown in advance so the user can decide whether the conversion is worthwhile.

Cryptocurrency swap inside wallets
The swap feature may appear under different names in wallets, such as Swap, Exchange, DEX, Bridge, or Convert.

Cryptocurrency swap (DEX) in Trust Wallet
In Trust Wallet, certain cryptocurrencies can be swapped with others. For example, a Bitcoin token on the Polygon network can be swapped for an Ethereum token on the same Polygon network. Or a BEP20 BNB token can be exchanged for a BEP20 UNI token.

Assume we have some TWT tokens on the BEP20 network and want to sell part of them to receive the BUSD stablecoin on the same network. In Trust Wallet, we select the TWT token, tap Swap, enter the amount we want to pay, then choose BUSD (BEP20) as the asset we want to receive.

The exchange rate (e.g., 1 TWT = 1.015 BUSD) and the estimated received amount are shown. After reviewing the summary, if the network fee and maximum slippage are acceptable, we confirm the swap. Upon success, the TWT balance decreases and the BUSD balance increases accordingly.

Slippage
Slippage refers to the change in the exchange rate during execution. If slippage exceeds 1%, it is usually better to wait and perform the swap at another time—unless market conditions or your strategy justify proceeding.

In general, for swaps inside Trust Wallet, both cryptocurrencies must be on the same network. For example, ERC20 Ethereum can only be swapped with other ERC20 tokens.

Trust Wallet also supports limited cross-chain swaps. For example, users can convert BNB on Binance Beacon Chain (BEP2) to BNB on Binance Smart Chain (BEP20), and vice versa.

Cryptocurrency swap in SafePal Wallet
In SafePal Wallet, users can swap cryptocurrencies across different blockchains and networks using cross-chain swaps. However, some trading pairs may be unavailable at certain times.

For example, users can send Solana (SOL) and receive Avalanche (AVAX), or send Polygon USDT and receive Bitcoin.

The reason SafePal supports such extensive cross-chain functionality is that it sources liquidity from both centralized exchanges (such as Binance and MEXC) and decentralized exchanges (such as 1inch and 0x).

It is worth noting that Binance Labs is one of the investors in SafePal’s software and hardware wallets.

Like centralized and decentralized exchanges, swap operations include fees. These fees are displayed before execution. On Ethereum (ERC20), fees can sometimes be significantly higher during peak network congestion, so always review costs before confirming.

Cryptocurrency swap on decentralized exchanges
Due to international sanctions, many well-known exchanges do not provide services to Iranian users. Because these exchanges require KYC, Iranian users often rely on swaps through decentralized exchanges.

However, many DEX platforms also restrict access based on sanctions or local regulations, sometimes even including users from the United States. As a result, users often access DEX platforms via VPNs while accepting the associated risks.

Blockchain-native DEXs
Decentralized exchanges often specialize in specific blockchains:

  • PancakeSwap supports Ethereum (ERC20), Binance Smart Chain (BEP20), and Aptos.
  • Uniswap supports Ethereum (ERC20), Celo, and Layer 2 solutions such as Polygon, Optimism, and Arbitrum.
  • Raydium supports the Solana blockchain (SPL).
  • QuickSwap supports Polygon (ERC20).

Usually, token diversity is highest on the native DEX of each blockchain. For example, BEP20 tokens are most abundant on PancakeSwap, ERC20 tokens on Uniswap, and SPL tokens on Raydium.

Swap operations on DEXs also involve fees, which are displayed before execution.

I leave it to you to research where swap fees in wallets and DEXs ultimately go. After researching, share your findings in the comments section below this page.

I hope that throughout these 21 steps, I have been able to add value to your understanding of the cryptocurrency market. If you were already active in this market, I hope you discovered insights that proved useful.

Please share your criticisms, feedback, and valuable suggestions with me.

Mahdi Baikmohammadlou

I wish all of you success and prosperity in life, business, and investing—especially in financial markets and the cryptocurrency market.

Worth Noting

Swaps are fundamental to DeFi adoption but introduce risks such as slippage, smart contract vulnerabilities, and front-running. Understanding liquidity sources, fee structures, and network congestion is essential before performing large swaps.

How AI Helps

AI tools help users compare swap routes, estimate slippage, and select the most cost-efficient liquidity sources. Platforms like ChatGPT assist users in understanding swap mechanics and risks, while advanced tools such as 1inch Pathfinder, Matcha, and AI-enhanced DEX aggregators optimize routing across multiple liquidity pools. Professional users rely on AI-driven analytics to detect MEV risks, simulate transaction outcomes, and monitor abnormal smart contract behavior.

FAQ

What is a cryptocurrency swap?

A swap is the direct exchange of one cryptocurrency for another without using a traditional order book.

What is the difference between Swap and Convert?

Swap usually occurs via wallets or DEXs, while Convert is a centralized exchange feature.

Do swaps require KYC?

No, most swaps via wallets or DEXs do not require identity verification.

What is slippage in swaps?

Slippage is the difference between the expected and actual execution price.

Are swaps safer than exchanges?

Swaps remove custodial risk but introduce smart contract and execution risks.

Why are fees sometimes very high?

High network congestion and Ethereum gas fees can significantly increase swap costs.