Swaps: An overview

A swap refers to an exchange of one token asset to another without the need for fiat currency. Through a token swap, you can sell a token you own for an equivalent amount of another token.

A cross-chain swap refers to swapping tokens from one network to another (e.g. from the Ethereum blockchain to the Optimism blockchain). This is commonly done using a bridge that locks tokens and mints a wrapped token on the corresponding chain.

Decentralized exchanges (DEXs) are crypto exchanges that do not require the deposit of assets into the exchange, providing you full custody of your tokens. Decentralized exchanges rely on liquidity providers to provide liquidity into a pool for sufficient liquidity to complete a swap. Swapping is completed by accessing the liquidity pool and requesting a swap, thereby exchanging the desired token at the going rate.

Centralized exchanges (CEXs) require users to deposit their funds onto the exchange, relinquishing custody of their tokens. Centralized exchanges use an order-book similar to traditional finance where a counter party is required to execute the swap. When you want to swap a token, an order is submitted and the trade engine attempts to find a counter party for the sell-order. Once this is found, the swap is then completed.

Swapping on Infinex is powered by Curve, an exchange protocol that handles the exchange of stable coins and other ERC-20 tokens. Infinex does not charge fees on swaps, allowing up to 10 swaps per day with 3 on Ethereum Mainnet. Curve however does charge a small fee for facilitating swaps at 0.015% of the transaction value for the current supported USDC-USDE pair.