Technical Definition
Token Swap
Exchanging one token directly for another in a single on-chain transaction.
By Crypto University Editorial
Decentralized Exchange (DEX) · Slippage · Price Impact · DEX Aggregator · Token Approval
✦ Key Insight
It is the most common action in DeFi and the one where costs are easiest to overlook, because the fee, the price impact and the gas are all separate.
✕ Common Misconceptions
Judging cost by the displayed fee alone. Price impact on a thin pool is often larger than the fee, and wide slippage settings expose you to sandwich attacks.
Detailed Explanation
A swap replaces the two-step process of selling into cash and buying the other asset. You keep custody the whole time — the tokens leave and arrive in your own wallet. The rate you receive depends on pool depth, your order size and the fee.
In Practice
“A trader swaps a stablecoin for a token, sees the quoted output, and receives slightly less because the trade itself moved the pool price.”