What is a Token Swap? How DEX Swaps Work
Exchange one token for another directly — no intermediary, no deposit
Swaps: The Atomic Trade
A token swap is exchanging one asset for another under rules you sign. On centralized venues that is an order book match; on-chain it is usually an AMM curve or an RFQ router. Same user goal, different trust model.
Ethereum mainnet swaps in 2025–2026 still routinely cost $1–15+ in gas at busy times; L2s and Solana often land under $0.05 for comparable complexity. The chain you pick matters as much as the ticker.
How Constant-Product Pools Price Swaps
Most DEX pools use x · y = k. Liquidity providers deposit pairs; traders push the price along the curve. Size relative to the pool sets price impact; block ordering sets slippage.
Uniswap v2 popularized the 0.30% LP fee tier; v3 concentrated liquidity changes the shape but not the idea — you pay the curve, the LPs, and the validators.
Slippage, Gas, and the Bill
Set slippage tolerance to what the pool can absorb. On a memecoin with thin depth, a “small” 2% setting still fails when three wallets front-run you.
Total cost ≈ gas + LP fee + protocol cut + slippage. Compare end-state balances, not the headline rate.
Swapping on GaiaEx
GaiaEx keeps everything non-custodial: connect wallet, pick assets, review the quote, sign. MPC custody options reduce seed phrase mishaps but do not change the fact that swaps are on-chain transactions you must approve explicitly.
