Apr 19, 2021
Token swaps in cryptocurrency
In the cryptocurrency world, ‘swaps’ or ‘replacements’ generally apply in a broader technical sense.
Given that cryptocurrency assets have their foundation in cryptography, exist in an immutable blockchain — and furthermore only exist digitally — it is not possible to easily substitute one digital asset for another without introducing new code, frameworks, or support structures to do so.
As such, the process of introducing new cryptocurrency units which rely on a different technical structure or foundation is done through the process of what is called a ‘token swap’ or ‘coin swap’. Broadly, this typically involves exchanging one cryptocurrency asset for another on a ratio of one-to-one, where the old asset is discarded and the new asset is awarded to token holders as a fully fungible replacement that shares the same market value.
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