Swap
Last updated
Last updated
ApeSwap's decentralized exchange (DEX) allows users to swap between tokens in the most efficient way possible.
Read below to learn the basics of swapping, or continue to the How to Swap page to for instructions on use the ApeSwap DEX to swap tokens.
Swapping tokens is one of the most fundamental functions of a DeFi DEX. Decentralized exchanges like the ApeSwap DEX allow users to send their tokens into the protocol and receive as close to an equal value of another token as possible, after accounting for transaction fees, slippage, and price impact.
In the world of DeFi, smart contracts dictate each step of a swap transaction, with no human or centralized intermediaries involved. This gives users several advantages relative to traditional or centralized currency exchanges, including:
Fast transaction speeds
Permissionless trading
Flexibility and access to a wide variety of tokens
Markets that are always open
Most importantly, swapping between tokens allows users to take advantage of unique opportunities within DeFi. For example:
A user who wants to buy a protocol utility token, like BANANA, can use the ApeSwap DEX to swap it with an existing token, such as the BNB Chain protocol token ($BNB) or the BNB Chain stablecoin ($BUSD). The user now has a utility token which they can hold, stake to earn rewards, or convert to GNANA to participate in governance.
A user who is interested in supporting a particular crypto project on BNB Chain can use the ApeSwap DEX to buy a listed project's token with BANANA, BUSD, or any other of the tokens listed on the DEX. At any time, they are free to swap tokens at fast speeds without the permission of an intermediary.
A user who wants to consolidate crypto tokens into stablecoins to add stability to their portfolio can use the ApeSwap DEX to trade their project tokens for BUSD or any other listed stablecoins at any time, for any reason, without requesting permission from a centralized source.
ApeSwap collects a Routing Fee of every time users swap tokens on the exchange. The Routing Fee averages 0.2% of the value of the trade. Occasionally, an LP fee will also be included, depending on how the trade is routed. A portion of the fees goes to the ApeSwap Treasury, and a portion is distributed to liquidity providers.
For more information on how fees are distributed for trades on each chain, visit the Liquidity Mining section.
While token swaps do occur at very fast speeds on the blockchain, there can still be a (usually small) difference between the price you see when a user submits a swap transaction, and the price that applies when the transaction is recorded on the blockchain. This difference in prices is called "slippage".
When users submit a swap on the ApeSwap DEX, they select a "slippage tolerance" amount, which is the pricing difference that the user are willing to accept while the trade is executing. While slippage tolerance normally ranges between 0.10% and 1.00%, the default slippage tolerance is 0.50%. However, if the price difference between submission and confirmation of the trade exceeds that amount, the trade will fail. Users can increase the slippage far beyond the default of 0.50% if they choose, but must be careful to note that may have a significant impact on the amount of tokens they receive in return. The Minimum Received line will provide an estimate of the slippage impact of their trade.
If the token a user is trading has a reflect fee, then the slippage tolerance will need to meet or exceed the reflect fee percentage for the trade to succeed.
Price Impact
Slippage occurs not only from the change in prices from other user's trades, but also from the trade submitted by an individual user. This is called "price impact", and it's expressed in percentage at the bottom of the swap module. If slippage tolerance is below the price impact of the trade, the trade will fail.
Price impact is dictated by the constant product formula. To learn more about the constant product formula, check out this in-depth explanation.
Continue to the How To Swap page to learn how to trade on ApeSwap's DEX.
