How do I swap token across different blockchains?
About 5 years ago, it was hard to imagine that thousands of cryptocurrencies would be available in every corner of the world and that people would accept them with open arms. Cryptocurrencies are extremely easy to buy, but due to their diverse nature, certain difficulties are bound to arise.
Currently, the state of cryptocurrency use in the Blockchain industry may seem disintegrated and scattered. There are multiple networks, and each of them, such as Ethereum, Harmony, and Solana, work with different protocols, dApps, and qualities. Each of these Blockchain networks has its set of benefits, which is why users are always eager to try each of them.
This has led to a rapidly emerging requirement for token swapping across multiple blockchains. To find out how to trade coins and tokens on different blockchains, read on.
The easiest way to implement a cross-blockchain token swap platform development that all users will have to deal with is through cross-chain bridges. This requires a significant amount of money and time, but it’s worth it:
- Users must first identify the bridge they are willing to use between 2 or more networks and identify the digital currencies that can be exchanged on that multi-chain bridge.
- Next, users must choose a trusted DEX (decentralized exchange) on the blockchain network to transfer tokens to any of these restricted bridge tokens.
- Users then need to exchange the tokens to one of the restricted bridge tokens accepted by the blockchain network bridge.
- Users accept the exchange or transfer; make a payment of gas fees and DEX commissions on the native network of the token they are exchanging.
- Users must complete the multi-chain exchange of the restricted tokens through the bridge.
- Users agree to multi-chain transfer or swap and pay all transfer gas fees and commissions on the native network of their tokens.
- They need to find and choose a DEX (decentralized exchange) that can transfer or exchange the wrapped versions of the capped token to a new token on their target networks.
- Users must change the destination network’s wrapped version of the restricted bridge token to the new token.
- Users accept the exchange or transfer and pay the required gas fees and commissions on the new token’s native network.
- Users receive the new token.
Although this is one of the easiest methods most people will think of, it does require a significant amount of time, money, and action. Users can lose their money on the fees and commissions charged by the exchange. Many times, it can be difficult to find the required coin pairs, especially for new tokens. Users must perform a double conversion. On top of that, most decentralized exchanges will require a mandatory KYC requirement.
Fortunately, some major projects plan to work on quick and easy solutions, known as Multi-Chain Protocols. These protocols allow exchanges or transfers of a large number of tokens between various networks without multiple steps or KYC requirements.
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