Beginner’s Guide to Crosschain Token Swap
What is Token Swap?
One of the most important innovation that sprung up from DeFi is token swaps, which enables anyone to swap their crypto asset to another crypto asset with other person trustlessly. This means no third-party vendors such as brokers are involved within the process. Therefore, this makes asset trading fairer and more transparent than ever for people that are involved in the ecosystem.
Current State of Token Swap
While having a decentralized token swaps is a huge leap in our financial system, it is usually limited to swapping crypto assets that exist on top of the certain blockchain they’re building on. For example, if someone has USDT on top of Ethereum and would like to swap it to MATIC on polygon, by default it will be impossible as both tokens exist in different blockchains. This is mainly because blockchains are individually an isolated system that by default are not capable to interact with one another.
This in turn makes it extremely difficult for many DeFi users to take advantage of crosschain opportunities efficiently as swapping asset to another chain takes several steps that are relatively slow and expensive:
- use DEX to swap users asset from one to another on sending chain
- use Bridge to transfer the swapped asset to the receiving chain
- use another DEX to swap to the desired asset on the receiving chain, if necessary
As a result, most DeFi users just stay within their own respective chains and leave the opportunities behind. This is not just bad for DeFi users but DeFi ecosystem in general as there is a lack of crosschain composability that results transfer of value across multiple blockchains inefficient.
LI.FI: Advanced Bridge & DEX Aggregation
In order to solve the lack of crosschain composability, LI.FI is here to fill in the gap. In a nutshell, LI.FI is like 1inch & Paraswap for bridges and DEXes, LI.FI choose the best bridge to move funds from one chain to another, but since bridges only support stable-coins and a few other coins, LI.FI have DEXes on both sides of the bridges to swap before and after the bridge, thus facilitating any-2-any swaps across chains.
Due to the well-rounded solution provided by LI.FI to handle crosschain token swaps, Alps Finance decided to integrate LI.FI into our application interface. Therefore, making it very easy for DeFi users to do crosschain token swaps with just a few clicks of a button without leaving the Alps Finance platform. In the next section, we’ll show you how easy it is to use Alps Finance to do crosschain token swaps.
How to Do Crosschain Token Swap?
The easiest way to do crosschain token swap and track it is by using Alps Finance app. In this example, we are going to use Metamask, but you can use other WalletConnect-compatible wallet, such as:
- Trust Wallet
- Crytpo.com DeFi Wallet
- Rainbow Wallet
- Argent Wallet
- Metamask Mobile Wallet
- etc.
To get started, follow these steps:
- First, open https://app.alps.finance.
2. Connect to your Metamask by clicking Metamask button
3. You’ll be redirected to our Dashboard. Once in the Dashboard, click Swap on the sidebar
4. In the Swap page, you will see this very easy-to-use interface to do the crosschain swap.
5. Select which token and its amount from certain chain you would like to swap to and bridge to which chain (same chain works as well). All the swap info, including the token received and the gas fee (USD denominated) will be shown.
6. Once, everything is ready, Click on the Swap button and Metamask prompt should appear to do the swapping. In Metamask, click Confirm to proceed with the crosschain swap.
7. Booom! All you need is to wait for the transaction to go through and you’ll receive your swapped tokens on another chain 🔥
Conclusion
Token swap have been a very important part of DeFi innovation history, which lay the foundation of other DeFi protocols on top of it. However, as we progress to a multi-chain world gradually, it’s important to facilitate DeFi users with crosschain token swaps.
LI.FI is a bridge and DEX aggregator that solve such problem, thus Alps Finance have integrated LI.FI using their SDK into our application interface, which can be accessed through https://app.alps.finance. With just a few clicks of button, users can swap their tokens to any other asset on any other chain they want.
As always, we appreciate all your support. Feel free to contact us through one of our social media channel:
- 🐦 Twitter: https://twitter.com/alpsfinance
- 🐙 GitHub: https://github.com/AlpsFinance
- 🎧 Discord: https://discord.com/invite/zXbpgZSzCD
- 📱 Telegram: https://t.me/AlpsFinance
- 📷 Instagram: https://www.instagram.com/alpsfinance/
- 📜 Medium: https://alpsfinance.medium.com/
Love,
Alps Finance Team 💙
