In a world where thousands of cryptocurrencies exist, cryptocurrency holders at times get the need to swap coin. To do this, a crypto holder will require to swap a cryptocurrency that he or she owns for another cryptocurrency.
The cryptocurrency holder will however have to find a crypto swapping platform where he or she can perform the crypto swapping. Some crypto swapping platforms only allow crypto-crypto swapping while others also allow fiat-crypto swapping besides crypto to crypto swapping.
Also, some crypto swapping platforms specifically decentralized exchanges allow users to remain in full control of their cryptocurrency assets while others especially the traditional centralized cryptocurrency exchanges do not give users the liberty of remain in full control of their crypto assets.
In the traditional crypto exchanges, users create an account, provide their personal information and then deposit their crypto assets (coins) into the created account which is in the custody of the crypto exchange. This means the security of your crypto assets is in the hands of the crypto exchange.
The decentralized crypto exchanges on the other hand allow users to swap coins while the coins remain in the custody of the users. The exchange only provides a platform or protocol where the swapping will take place but the users remain in full control of the crypto assets in their digital wallets.
Some of the best crypto swapping platforms include:
KingSwap, in particular, allows its users to perform off-ramp fiat to cryptocurrency swapping besides offering non-fungible token (NFT) trade swap and buy and sell options. It forked from UniSwap and went ahead to introduce better solutions that its parent protocol.
One of the most notable thing about KingSwap is that it is a registered decentralized exchange in Singapore making it a more trusted option when it comes to fiat to crypto swapping. It also has added features that allow contributors to earn rewards and benefit from price curves.
Reasons behind crypto swapping
Below are some of the most common reasons as to why crypto holders would want to swap coin:
- Making profit
By speculating the market prices of different cryptocurrencies, crypto holders can swap from one crypto coin to another anticipating that they will make profit. For example, if a crypto holder has 3 Bitcoin (BTC) (each going for let’s say $10,000) in his/her custody and he finds out that Ethereum (ETH) is going for let’s say $500 and he speculates that ETH value will increase, he can swap the BTC for ETH. If the price speculation ends up being correct and the price of ETH rises to let’s say $600, he or she will end up making a profit of $100 for every ETH.
- Diversifying the cryptocurrency portfolio
The cryptocurrency market is described as one of the most volatile markets in the financial markets. As such, the value of one cryptocurrency may drastically reduce over a very short time, resulting in losses if the prices go below the price at which the cryptocurrency was purchased.
To mitigate such risk, cryptocurrency holders can swap a portion of their crypto assets for different cryptocurrencies to have several cryptocurrencies in their portfolio. And if the value of one crypto asset reduces, the other may not be affected or better still the value of the others may rise thus cancelling the losses.
- Acquiring a crypto token for a particular purpose
For example, if a crypto holder wants to stake his or her crypto tokens for yield mining, he will be required to acquire an ERC-token. Therefore, he or she will have to swap coin for ERC-tokens.