In the vast and dynamic world of cryptocurrencies, people use a variety of tools, including crypto swaps. These tools simplify transactions, help mitigate risks, and can maximize profits. They play a crucial role in the operations and investment strategies of many traders. But what exactly is a swap in the context of cryptocurrencies and how does it work? And when should you use a CEX vs a DEX for swapping? Let’s break it down.

If you’re new to digital assets, it may help to start with our guide on understanding cryptocurrencies and our comparison between CEX and DEX exchanges.

What is a swap?

A swap is a transaction between two parties where they exchange assets or financial commitments over a specified period of time. This exchange can involve various assets, including currencies, stocks, commodities, and, of course, cryptocurrencies.

In the world of cryptocurrencies, crypto swaps typically involve exchanging one crypto for another at a set value. For example, someone may swap Bitcoin for Ethereum or vice versa. People usually do this for several reasons:

Diversify their portfolio
Seize arbitrage opportunities, buying low in one market and selling high in another
Speculate on prices, betting on moves up or down

Swap

There's a variety of cryptocurrencies to explore in the crypto world for swapping.

Before diving into swap types, it’s useful to recall that cryptocurrency exchanges are platforms where users can buy, sell, and trade digital assets. They can be centralized (CEX) or decentralized (DEX). If you want a deeper comparison, read our article on why you need both CEX and DEX.

Now, let’s look at the main types of crypto swaps and their specific features.

Types of crypto swaps

There are different types of swap operations in the crypto world, each with its own features and purposes:

1. Peer-to-Peer (P2P) swaps: These occur directly between users without an intermediary custodian. Users can execute crypto swaps through smart contracts on blockchains like Ethereum or on decentralized exchanges (DEXs). To illustrate, let’s compare these two options:

Smart contracts on blockchains: Self-executing programs stored on chains like Ethereum. They define the conditions of a transaction and automatically execute when they are met. In P2P swaps, smart contracts facilitate direct exchanges between users and ensure that both parties receive the agreed assets or the trade is reverted.
Decentralized exchanges (DEXs): Trading platforms that function in a decentralized way. There’s no central authority controlling transactions; everything is handled by smart contracts. Users trade directly from their wallets, maintaining self-custody of their funds. If you want to understand the role of DEXs in the broader DeFi landscape, check our article on decentralized applications (DApps).

Swap component

DexSwap component in DexAppBuilder for swap trading

2. Swaps on centralized exchanges (CEXs): Many centralized exchanges offer instant swap services. You can exchange one cryptocurrency for another directly on the platform through a simple interface. It is quick and easy, though you might have to pay a higher fee and you temporarily give custody of your funds to the exchange. As we explain in our CEX vs DEX comparison, CEXs are very convenient for fiat on/off-ramps but introduce custodial risk.

Centralized Trading

Centralized Exchange (Binance)

3. Atomic swaps: These crypto swaps are also P2P transactions, called “atomic” because they are executed in an all‑or‑nothing fashion. Either the entire exchange happens or nothing happens at all, which prevents partial fills and many common fraud scenarios. Atomic swaps are usually executed via smart contracts and can even bridge assets across different blockchains.

Why are crypto swap tools important?

Crypto swap tools play a vital role in the cryptocurrency ecosystem for several reasons:

Liquidity: Easy conversion between cryptocurrencies enhances market liquidity and reduces slippage.
Portfolio diversification: Swaps allow investors to rebalance and diversify quickly across multiple assets.
Arbitrage: Swaps enable traders to capture price differences between markets or assets.
Hedging: In a highly volatile market, swaps can be used to hedge exposure or move into stablecoins during high-risk periods.

If quieres profundizar en cómo los swaps encajan en una estrategia de inversión más amplia, te recomendamos leer nuestra guía sobre dominar los riesgos de la inversión cripto.

Build your own crypto swap platform

If you’re interested in getting involved in cryptocurrencies and want to build your own decentralized crypto swap platform, the DexAppBuilder platform offers an interesting solution: DexSwap.

Our DexSwap solution facilitates decentralized cryptocurrency exchange without relying on a central authority. It aggregates liquidity from various sources to offer traders some of the best real-time prices. Additionally, it is designed to optimize gas fees, reducing transaction costs and slippage. DexSwap provides various functions, such as swapping tokens using 0x liquidity pools and adding liquidity to pools to earn fees. It works on multiple EVM networks and makes cryptocurrency trading easier for users.

DexSwap

With DexAppBuilder, you can build your own custom crypto swap platform inspired by DexSwap—without needing advanced programming knowledge. DexAppBuilder is a no-code/low-code platform focused on Web3 that lets you launch branded DApps, swap interfaces, NFT marketplaces and more. If you’re curious about how it works, you can also read our article on creating on‑chain applications with DexAppBuilder.

Aggregation swap

Conclusion

Crypto swaps are crucial in the cryptocurrency ecosystem because they help investors exchange assets easily and safely. From portfolio diversification to arbitrage and protection against market volatility, crypto swaps are a versatile and powerful tool.

There are many ways to perform swaps—CEXs, DEXs, P2P smart contracts, and atomic swaps—each with different trade‑offs between convenience, custody, and decentralization. Understanding when to use a centralized exchange and when to use a DEX (see our article on CEX vs DEX) is key to building a healthy DeFi strategy.

DexSwap, offered by the DexAppBuilder platform, is a notable example of a modern DEX aggregator. It aggregates liquidity from multiple sources and offers a rich feature set for users. With DexAppBuilder, anyone can build their own custom crypto swap platform inspired by DexSwap, and integrate it into a broader Web3 strategy that includes DApps and Web3 websites.

Interested in exploring decentralized cryptocurrency trading? Start by designing your own crypto swap interface or aggregator today—DexAppBuilder can help you ship a production‑ready Web3 swap experience in minutes.