- Token swapping is exchanging one crypto for another
- Token swap also occurs when a DeFi platform moves to a different blockchain
- Developers provide users with the means of swapping their tokens
A token swap can be defined in two ways in the world of cryptocurrencies.
A token swap is a term that can be used to define the process of exchanging one crypto for another without the need to go through a crypto-to-fiat exchange. This definition explains how dominant crypto platforms like Changelly, Shapeshift, and Airswap work.
Token swap can also be used to explain the migration of crypto and DeFi projects or platforms from one blockchain to another, which calls for a coin swapping process to accompany the move. For this type of token swap, a platform or project chooses to move its operations from one blockchain to another with unique token standards.
When a platform decides to move to a new blockchain, the development team provides investors with the means to swap its native token to the token compatible with the new blockchain network they are moving to. This process is what is referred to as token swapping or token migration.