Basic Concepts of Exchange
π Exchangeβ
SwapX is an automated market maker (AMM), a decentralized exchange (DEX) that automatically provides liquidity through smart contracts and algorithms without the need for traditional order books. The transaction price is determined by a mathematical formula (such as the constant product x * y = k), and users trade directly with the liquidity pool. Liquidity providers (LPs) deposit token pairs and earn fees, but may face impermanent losses. Features are permissionless, transparent, and censorship-resistant. SwapX Exchange provides a variety of functions that support decentralized trading:
Exchange/Tradingβ
Decentralized Exchange (DEX) enables peer-to-peer asset trading between users through smart contracts, without the need for intermediary custody of funds. Users connect to the on-chain protocol directly through a wallet (such as MetaMask), use an automated market maker (AMM) model (such as Uniswap) or an order book (such as dYdX) to complete the exchange, and the transaction is publicly settled on the blockchain. Advantages include non-custodial and censorship-resistant, but are limited by on-chain performance (such as speed and slippage). If it is a centralized exchange (CEX), it relies on the platform order book to match transactions. Users need to recharge assets to the exchange for custody, and centralized institutions manage liquidity. SwapX allows users to trade without going through a centralized exchange. All operations you perform on SwapX are performed directly through your own wallet - no need to entrust your tokens to others!
Liquidity Poolβ
The decentralized exchange (DEX) liquidity pool (Liquidity Pool) is a smart contract fund pool composed of crypto assets deposited by users, which is used to achieve automatic transaction pricing and instant exchange. You can only exchange these tokens if SwapX has sufficient liquidity. If no one adds enough liquidity to the token you want to exchange, then the exchange will be difficult, expensive, or even impossible. Providing liquidity will earn you liquidity tokens (LP Tokens), which will be rewarded to you in the form of trading fees to ensure that you always have enough liquidity for the exchange.
Now that you understand the basic concepts, let's start the exchange journey!