Up your Web3 game

Ledger Academy Quests

  • Test your knowledge
  • Earn POK NFTs
Play now See all quests

Swap Glossary: How to Start Swapping With Confidence

Read 6 min
Floating boxes in an open space
— Swapping your crypto is like exchanging dollars for any other currency, the only difference being that you’re using crypto.

— In Ledger live, you can easily exchange (swap) your current crypto holdings for other cryptos via our partner Changelly.

— When swapping one crypto for another you need to know the terminologies to avoid any surprise.

Want to learn all there is about swapping? We’ve got our swap glossary ready for you.

Whether you call it exchange, swap, trade or convert, it’s basically the same thing – exchanging a crypto asset you already hold for another one. Our trusted partners, Changelly, Paraswap and 1Inch, make sure that you don’t need to leave  Ledger Live to easily & safely swap from the security of your hardware wallet.

Good news is there’s no FIAT involved! Phew, oh boy… That makes it so much easier to swap and diversify your portfolio (Euhm.. taxes). And these are just a few of the awesome reasons why you would want to swap. 

But besides knowing the “why’s”, you might be wondering what’s up with all that swapping terminology, like “floating rates”, “slippage”, “gas fees”, “atomics swaps”, “DeFi and DApps”. Let’s put a magnifying glass to them and see what they’re all about.

Floating and fixed rates

As we mentioned above, swapping is just like exchanging your dollars for any other currency at an exchange office. Like with any exchange office, there’s a cost for that trade: you will be paying a commission on your swap which is determined by a rate. You will often encounter two kinds of rates:

  • Fixed rates – the swap rate is fixed and it doesn’t change. The users (you) know well in advance what they’re going to receive from each swap transaction.
  • Floating rates – the swap rate correlates with the market price at the time of the transaction. With floating rates, the outcome of the transaction depends on the price of the assets at the moment of validation.

If you want to dig in deeper and learn more about rates and what kind of advantages/disadvantages they pose, you can read this full article.


Slippage is a phenomenon all too well known in the world of trading, be it stocks, bonds or crypto. A slippage happens whenever there is a difference between the expected price of a trade, such as a swap, and the price at which the trade actually happens. This difference happens because the price changes in between the time of request and that of the execution.

You might have guessed it yourself but we’re also going to say it. Slippage happens more often in volatile markets, as is the case for crypto. However, the slippage risk is different from one asset to another and from one exchange platform to another.

Slippage is sometimes a very misbehaved kid, as a lot of unwary traders end up losing a lot of money because of it. That’s why staying informed and doing your own research (DYOR) on the asset and platform is mandatory before engaging in any trades.

Gas fees

Aah, the eternally problematic, yet essential GAS FEE. The gas fee is paid on the Ethereum blockchain as a “ticket” to use its computational prowess. Any kind of transaction/action that is executed on the Ethereum blockchain, like sending ETH to other users, minting NFTs or swapping tokens, is subject to this gas fee. You can only pay the fee in ETH which is the native currency of the Ethereum platform.

The most important thing you need to remember about the gas fee is that you always need to have some spare ETH in your wallet to execute the transaction. Either that, or the gas fee gets deduced from the amount you are trading/sending.

You have the liberty to choose the amount of network fees that you want to pay when you call for a transaction. Keep in mind though, that the amount of fees will affect the processing speed of the transaction – lower fees = higher transaction times and sometimes you might even encounter the surprise of a failed transaction.

Gas fees can also vary, depending on the network situation. If there’s network congestion, gas fees will skyrocket, and if you set the gas price too low when you’re ordering your swap, your transaction might get stuck.

Token swap

When it comes to token swap, there are two very different things involved:

  • The simple swapping between two different tokens, instead of crypto, through exchange platforms where both tokens are supported;
  • Migrating a token that is built on top of a blockchain platform to a new and different blockchain. 

Some blockchains allow users to create and launch their own tokens on top of their protocols. The most famous and widely known to the public are the ERC20 tokens which run on top of the Ethereum blockchain. 

It may happen that at some point in the development of the token and of its underlying project, the blockchain platform that it is built upon no longer proves useful for its development. In this case, the project developers can opt to operate a “token swap”, basically migrating their token onto a new blockchain.

Atomic swap

In a normal-case scenario, whenever you would want to swap your crypto, you would use a centralized intermediary such as an exchange to do so. On the other side of the spectrum, an atomic swap allows a direct, wallet-to-wallet swap, between two peers, by using a specially crafted smart contract to replace the exchange middlemanning.

DeFi and dApps

Currently, there are two kinds of financial systems. The traditional one is the centralized financial system that is run by intermediaries like banks, insurers, lenders etc. On the other side of the table, we have the emerging Decentralized Finance (DeFi) that is exclusively run on blockchain-based protocols, tools and platforms known as DApps – Decentralized applications.

The purpose of DApps is to provide the full range of financial services traditionally offered like funding, lending, betting and exchanging crypto. For example, both Uniswap and PancakeSwap are DApps that offer you a decentralized alternative to swap your tokens.

Decentralized exchanges

Decentralized exchanges or DEX(s), for short, are a type of dApps that allows for direct, peer-to-peer, crypto transactions to take place securely without requiring a middleman to perform the exchange.

Basically, DEXs provide you with decentralized alternatives to swap your tokens. One of the most famous DEXs out there is Uniswap. Developed on the Ethereum blockchain, Uniswap allows users to swap Ethereum-native tokens without them having to trust anyone with their funds.

We’re now convinced that you got the hang of it and have a fairly good idea about how swapping works. It’s not rocket science, and it’s the best way to diversify your portfolio by only using your crypto. If you’re tempted to give it a try, just head onto Ledger Live and start swapping securely thanks to our partner, Changelly.

Knowledge is power

Disclaimer: Exchange, lend, and other crypto transaction services are provided by third-party partners. Ledger provides no advice or recommendations on use of these third-party services.

Related Resources

Stay in touch

Announcements can be found in our blog. Press contact:
[email protected]

Subscribe to our

New coins supported, blog updates and exclusive offers directly in your inbox

Your email address will only be used to send you our newsletter, as well as updates and offers. You can unsubscribe at any time using the link included in the newsletter.

Learn more about how we manage your data and your rights.