Crypto glossary
Token swap
A token swap exchanges one crypto token for another directly from a wallet, usually through a DEX, aggregator or in-wallet tool, without an order book account.
A swap is the basic trade of DeFi. The user picks the token to sell and the token to receive, the app finds a route through one or more liquidity pools or market makers, and a single transaction delivers the new token to the same wallet. Unlike trading on a centralised exchange, there is no deposit, no account and no order book to manage: the price is quoted, signed and settled on-chain.
Swaps happen on Uniswap, Jupiter, PancakeSwap and other DEXs, through aggregators such as 1inch or CoW Swap, and inside wallets like MetaMask or Phantom, which add their own service fee. Before swapping an ERC-20 token, users typically sign a token approval allowing the router contract to move it.
The total cost includes the pool fee, network gas, any interface fee and price impact. Users should set a reasonable slippage tolerance, since a loose setting invites sandwich attacks. Fake tokens with copied names and unlimited approvals to malicious contracts are the most common ways people lose money while swapping.
Example
A user swaps 500 USDC for SOL in a wallet app; the aggregator routes the order through two pools, charges a 0.85% service fee and the SOL arrives in the same wallet seconds later.