The ability to transfer tokens from one Blockchain to another is a growing need in DeFi. New users that get started with cross-chain swaps might expect that it is easy to swap one type of token with another across different chains. It is not the case as coins function in different chains and work in a decentralised way. It becomes a challenge to have tokens with different values and on different chains. To get the best value for the tokens, users need a way of moving the tokens across chains. The solution is to perform a cross-chain swap, which is also known as an atomic swap. In this post, we’ll define cross-chain swaps and show why it is important in today’s world. We will also cover some tips to help you get started with cross-chain swaps.
What is a Cross-chain swap?
A cross-chain swap involves the transfer of crypto tokens across different Blockchain networks. The user in one network who wants to get tokens in another network performs the cross-chain swap to get the different tokens on the desired network. This is best achieved using smart contracts, which help users swap crypto. Smart contracts connect to different chains and perform automatic swaps.
As a user, monitoring different chains to get the best-priced tokens is a challenge. Using smart contracts is the way to go to find the best options to swap crypto. Applications that help execute cross-chain swaps operate on platforms that make the atomic swaps fast and efficient. Some of the best platforms in the market help to swap crypto without limitations, which include the requirement to first submit customer data. This makes your decision to use smart contracts to swap crypto a better decision. Such is the case when comparing the efficiency of crypto swaps with the process of currency exchange in centralised systems.
Despite the prevailing challenges in cross-chain swaps, it offers many benefits to users in DeFi networks. Problems such as the time taken to move tokens across network borders are great hurdles. Using a platform such as CrowdSwap helps to solve these problems and enables you to swap crypto with ease.
Why are Cross-chain swaps important?
To answer this question, we could look at how a crypto upswing or downswing could affect the value of your tokens. With an upswing, users have an increase in the value of their tokens in one network. The situation might change when a downswing occurs. Tokens can lose value and lead to losses. Cross-chain swaps provide a way of dealing with the volatility of crypto by giving users the chance to move crypto across networks. Users can swap crypto to protect the value of their tokens and the losses that come along with it. An example is to swap volatile crypto with stablecoins, which ensure a lower level of volatility in the market.
The benefits linked to cross-chain swaps extend to the use of crypto in the wider market. If you desire to have tokens in a specific Blockchain network, cross-chain swaps can help you benefit from market opportunities. You can swap tokens with low market circulation to ones with high circulation. This makes it efficient to pay for products and services and to send crypto to other users in the same network. The lack of a chance to swap crypto among users can limit the number of ways of using virtual tokens.
DEXes have added functions and benefits to users through cross-chain swaps. After being the first person to perform a cross-chain swap, Charlie Lee pointed to the continued growth of decentralised systems. In the below tweet on his handle, Charlie hinted to users having more power through the use of cross-chain swaps.
Since the first crypto swap, smart contracts have continued to increase the efficiency of the crypto swap process.
CrowdSwap’s Atomic Token Transfer
As one of the most useful platforms in the market, CrowdSwap provides users with an efficient solution to performing atomic swaps. The platform helps users overcome time and price barriers, which might limit the benefits of cross-chain swaps. The ability to execute a crypto swap on time is necessary as the swap details for the swap change in a matter of seconds. To successfully execute a swap, CrowdSwap uses Cross-Chain Liquidity Pools to ensure crypto swaps occur on time. The figure below shows the use of Cross-Chain Liquidity Pools on the CrowdSwap platform.
The ability to save time is one benefit of using the CrowdSwap platform. Another one is the chance to take advantage of low prices for the selected crypto pairs.
Tips and reminders for Cross-chain swaps
Here are some tips and reminders to help you get the most out of cross-chain swaps:
- Aim to get the best price for the cross-chain swaps. This includes the price of the tokens and any ancillary costs arising from the crypto swap. CrowdSwap’s best price routing feature helps users get the best prices from crypto swaps.
- Cross-chain swaps can help to avoid the effects of crypto downswings as users purchase less volatile coins.
- Platforms such as CrowdSwap will help you overcome any future crypto swap barriers arising from Blockchain network changes.
Overall, cross-chain swaps help to avoid the barriers of moving coins across different Blockchain networks. In using efficient platforms such as CrowdSwap, you can get the benefit of low prices for cross-chain swaps.
Get started with CrowdSwap to enjoy the lowest prices for your cross-chain swaps.