You must have read it if you are a Swap Metamask option user. There are so many options to trade your tokens these days, but which platform should you choose? If you were wondering how a swap works and if swapping is also possible with cryptocurrencies and stocks, then you have come to the right page! The answers to all your questions can be found below.
What is an exchange swap?
Primarily used with interest rates, a swap occurs when 2 parties exchange cash flows or liabilities, usually from a loan or bond. Swaps are usually done between corporations and large financial institutions, but are rarely used by retail investors.
While best crypto platform offers a myriad of features for crypto and stock traders, stock trading is not something common or offered by most trading apps. On the other hand, exchanging cryptocurrencies is quite simple, which brings us to the next point.
What is a crypto swap?
A crypto exchange occurs when someone simply wants to exchange one of their cryptocurrencies for another. Often referred to as a token exchange, it allows you to trade anything you want, from Bitcoin to Etherum, or from Litecoin to Ada, for example. There are, in fact, many exchange applications specially designed for the exchange of coins/tokens such as:
- Let’s talk
- Trading area
How to exchange one cryptocurrency for another?
Here is a short guide on how to trade your cryptocurrency:
- Create an account on a currency exchange like Uniswap or any app that offers an exchange option like the Metamask Virtual Wallet.
- Once you have completed the registration and KYC verification process, select the token you wish to trade.
- Enter the amount of crypto you want to trade.
- Select the crypto you want to receive in exchange.
- Take a look at the offer and the fees attached to it, then confirm the exchange.
And There you go ! You are ready. Please note that exchange fees and cryptocurrency availability may vary from app to app. Also, the fees will depend on whether or not you are trading from your private key wallet or trading account.
How much does the crypto exchange cost?
As mentioned above, swap fees depend on how you set up the swap but also on the cryptocurrencies you are trading. Additionally, network conditions at the time of the trade may also affect the price of the trade. Generally speaking, it’s best to just switch from one trading account to another trading account, that way there are no network fees.
Finally, it is important to note that not all cryptocurrencies will be available on the crypto exchange broker or wallet you have chosen to exchange. Thus, it is important to choose a platform based on what you want to trade as going through a KYC verification process can be time consuming.
How much does it cost to trade a token on Metamask?
For example, exchanging one token for another on Metamask is quite simple, but can get expensive in the process. As of September 2020, you can redeem your coins directly from their mobile app with the Swap button available on your dashboard.
To perform the swap, Metamask will use multiple DEXs (decentralized exchanges) and AMMs (automated market makers). In other words, it is an in-depth analysis of the best offers available in the market at the time of your trade request. Once done, they will show you how many tokens you are going to receive and how much gas costs will be. Also note that Metamask’s service fee is 0.875%.
Let’s see how much it would cost, as of June 24, 2021, to make a small Swap transaction on Metamask between ETH (Ethereum) and BAT (Basic Attention Token, the official currency of Brave Web Browser):
- Swap: ETH to BAT
- 0.02 ETH = 70.44249 BAT
- 0.02ETH = $38.82
- Estimated gas fee = 0.00144 ETH $2.79
- Total: 38.82 + 2.79 = $41.61 to receive 70.44249 BAT
Also, the Metamask service fee of 0.875% is already included in the quote. Once you have confirmed the Swap, you can view its status in your Transaction History, and there will be 2 buttons available. The first is to speed up the process, but this usually only takes a few minutes (unless there is a lot of network traffic at the time of the exchange). The other button is an undo option in case you change your mind.
To conclude, just remember that stock and interest rate trading is rarely done by individual investors. That said, if you are looking to trade your virtual coins, an exchange app or even some crypto wallets will do the trick.
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The art of trading crypto and stocks
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