What is a token swap?

In the dynamic and rapidly evolving world of cryptocurrency and decentralized finance, understanding the nuances of various transactions and protocols is crucial. One such concept that has gained significant traction in recent times is the token swap. But what exactly is a token swap? Simply put, a token swap refers to the exchange of one cryptocurrency token for another, often without the involvement of a centralized exchange. This process is facilitated by decentralized exchanges, or DEXs, which utilize smart contracts to facilitate the direct peer-to-peer exchange of tokens. Token swaps can be used for various purposes, including portfolio diversification, hedging risks, or accessing tokens that may not be listed on traditional exchanges. Understanding how token swaps work and their implications is important for anyone navigating the decentralized finance landscape.