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Paraswap is an aggregator. Think of it this way, Trivago is to hotels what Paraswap is to decentralized exchanges. Like how trivago helps you find the lowest prices on hotels without letting you juggle 10 different tabs, Paraswap enables you to find out the best possible rate in order to swap your tokens across the most sought-after decentralized exchanges on Ethereum.
What do you mean by Token Swapping?
As the name suggests, Token Swapping can be termed as a process of acquiring new Tokens in exchange of already owned Tokens or fiat money. This can be done through cryptocurrency exchanges. However, in today’s time cryptocurrency exchanges face a number of issues which need resolution.
The process of Token Swapping using a decentralized exchange doesn’t involve a seller or any sort of intermediary to facilitate the transaction. The exchange does all the calculations on its own presenting the best possible deal to you.
Since, there’s no intermediary involved, pools of different currencies are created where people can deposit the currency currently owned by them and withdraw their desired currency, this way it satisfies the demand and supply of the desired Token to be exchanged by individuals. This is done with the help of Smart Contracts.
How can Paraswap be beneficial?
The aggregator platform recently came out with its own Token named, PSP, which was airdropped to the existing users. The Token allows the user to get involved in working on the platform in the form of enabling them to provide insights on the changes that they wish to see in the platforms including the UX/UI changes. This is a big step in terms of making the platform more decentralized and user focused.
Provides a higher degree of freedom and outright ownership.
People oftenly use CEXs and DEXs because it provides a smooth trading experience with respect to the ownership of the user. However, Paraswap, on the other hand, offers you a user-friendly experience to swap your tokens.
Paraswap being a decentralized exchange doesn’t require access to your non-custodial wallet, meaning, the ownership of your assets remains with you in its entirety with Paraswap having no control over them.
Paraswap provides better liquidity and smooth functioning of trading transactions:
If we take an example, suppose you went to swap your ETH for USTD to an exchange, there you find out that the exchange isn’t liquid enough to carry out your transaction. The same thing happens upon visiting the other exchanges until finally you find an exchange which has the required liquidity to carry out your transaction but it’s still dicey if you would receive your final amount without any haircut.
Now if you use Paraswap, being an aggregator, it does the searching for you and brings you the best deal by comparing prices across all other exchange platforms. This working mechanism of Paraswap not only reduces your swap time but also minimizes the risk of potential slippage of the final amount.
Lower prices and Lower fees:
As claimed by the project founder, Paraswap can save you between 5% to 10%, which is due to the varying exchange rates. Using multiple exchange platforms allows Paraswap to achieve this objective.
If we talk about fees across other platforms, it may vary considerably but Paraswap can customize your trades in order to reduce your fee per trade.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
