The top ten cryptocurrencies constitute the lion’s share of the crypto market. Other than these, there are thousands of smaller tokens that shape the rest of the market. You can swap one cryptocurrency for another for varied reasons; earlier, you needed to sell one crypto, convert the proceedings into fiat currency, then buy another crypto with legal tender.
The process was expensive and time-consuming, but the standard form for switching from one crypto to another. As crypto is merging with mainstream payment gateways, the need for a swift and well-organized way to swap between coins has also amplified.
Decentralized exchanges (DEX)
Decentralized exchanges (DEX) have emerged as the most appropriate platform for trading cryptocurrencies. In the DEX, you can convert one crypto into another without a crypto-fiat conversion procedure. Within the ecosystem of the peer-to-peer marketplace, tokens can be effectively interchanged, saving time and paying less brokerage.
To trade in DEX, you need not fill out KYC and AML forms; providing the wallet address to the exchange can facilitate a transaction. Any crypto holder can activate a trade-in DEX platform irrespective of their location and prevailing law regarding crypto in the resident nation.
Trade & swap
It is assumed to trade and swap are tantamount, but in the parlance of crypto, they have diverse meanings. Though the ultimate consequence is the same but the procedure varies. In trade, the crypto needs to convert into fiat, and then with that currency, another token is bought. If the trade is performed in a crypto exchange, then a commission needs to be paid on both sides.
On the other hand, in swapping, you can switch one crypto into another with an equal amount of value. The various trading pairs in crypto exchanges are digital assets that can be interchanged over an exchange. A trading pair could be Bitcoin/Litecoin (BTC/LTC) or Ether/Bitcoin (ETH/BTC). Trading pairs become more functional as some crypto can be bought by another one only.
Three primary platforms
There are three primary platforms to swap cryptocurrencies; Decentralized exchanges, Centralized exchanges, and within a wallet. Swapping within a wallet is a seamless way to retain full control over digital assets in one place. Centralized exchanges are platforms owned and operated by an entity that facilitates peer-to-peer transactions, CEXes.
You would find many swapping services through pair trading. As a token of custody facility, the converted crypto would be held by the exchange. These platforms are user-friendly, and due to high liquidity, large volumes of crypto can be transacted, but the numbers of pair trading could be limited.
Crypto pair trading
To learn more about crypto pair trading and its arbitrage opportunities, log on to any good and trusted sites like cropty.com. Crypto pair trading allows you to evaluate the value between two different coins and to appraise the relative worth of a particular cryptocurrency.
The most popular and versatile crypto pair are Bitcoin and Ether, and they are available in many exchanges. Base currencies in pair trading denote the contracted value of different assets and define the exchange rates among fiat currencies. This principle holds true to crypto assets also.
If you want to trade on lesser recognized crypto in an exchange owning a base currency listed in the pair trading is essential, the base currency varies from exchange to exchange.
