How Token Swaps

Function Token swapping represents a foundational operation within a DeFi decentralized exchange (DEX) system. DeCentralized exchanges like TonCloud Swap provide users the ability to deposit their tokens into the protocol and subsequently receive tokens of another type, aiming to maintain an approximate equivalency in value, while factoring in transaction fees, slippage, and price fluctuations.

Within the DeFi landscape, the process of a swap transaction is governed by smart contracts, removing the need for human or centralized intermediaries. This confers several benefits to users in comparison to traditional or centralized currency exchanges, including:

  1. Swift transaction speeds

  2. Unrestricted trading access

  3. Versatility and exposure to a diverse array of tokens

  4. Non-stop market availability

Trading Fees

In the process of token swapping on TonCloud Swap, a Routing Fee is gathered with each transaction where users exchange tokens. This Routing Fee typically amounts to 0.2% of the trade's value. Additionally, an LP fee may sometimes be included, determined by the route taken for the trade. The fees collected are divided, with a segment directed to the TonCloud Treasury, and another portion distributed among liquidity providers.


Even with the rapid pace of token swaps on the blockchain, a slight variance—usually minimal—can exist between the price seen during the submission of a swap transaction and the price recorded upon the transaction's blockchain confirmation. This price variance is known as "slippage."

When engaging in a swap on TonCloud Swap, users choose a "slippage tolerance" value, representing the acceptable price difference during trade execution. The typical range for slippage tolerance is between 0.10% and 1.00%, with the default set at 0.50%. However, if the price difference exceeds this amount between submission and confirmation, the trade will not proceed. Users can adjust the slippage tolerance beyond the default 0.50%, but it's important to note that this might significantly affect the received token amount. The "Minimum Received" indicator offers an estimate of the trade's slippage impact.

For trades involving tokens with a reflect fee, the slippage tolerance must meet or exceed the percentage of the reflect fee for a successful trade.

Understanding Price Impact

Slippage doesn't solely arise from changes in prices due to other users' trades; it's also influenced by an individual user's submitted trade. This phenomenon is referred to as "price impact" and is represented as a percentage at the bottom of the swap module. If the slippage tolerance falls below the trade's price impact, the trade will not proceed.

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