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Simple swaps are a great way of buying or selling small amounts of crypto, as they are super flexible, mobile-friendly, crazy simple to use and have a large array of coins that can be swapped between. The main downside with simple swaps is their custodial nature, meaning that a middleman takes control of your funds to complete the exchange between coins. You should be aware of this risk, as it could lead to loss of funds.
Simple Swaps are not the same as AtomicSwaps. AtomicSwaps, as in the case of DCRDEX, are completed fully peer to peer and do not require any middlemen or third-party services.
As a final preemptive warning, they also tend to be costly in terms of trading fees, network fees, and exchange slippage. When you complete a simple swap, you are effectively placing market orders to find a route to the desired coin. Matches are generally not competitive, can change unexpected and are subject to commissions and front running.
That being said, if you are intending to buy a small amount, for purchases, testing or trying out a project, this can actually be a very useful way of interacting with non-mainstream cryptocurrencies.
Some simple swaps, like the one found on the Binance mobile app, will also allow you to trade directly from fiat to the coin of choice. But most simple swap apps, are crypto to crypto only.
There are also several dedicated simple swap services like Changelly, Flyp.me, and ChangeNow. All of which will change any of the most popular cryptocurrencies to and from Decred DCR.
How do they work?
In this example, we’ll use changelly and assume you have never used crypto before, and you don’t have access to Binance.
- Step 1 – set up the coinbase exchange app and deposit fiat funds
- Step 2 – use your fiat fund to buy a high liquidity cryptocurrency. In this case, we’ll buy Litecoin LTC, which will also help keep the fees down.
- Step 3 – Set up a Decred wallet, For mobile use, I’ll set up the Trust wallet and enable the Decred option
- Step 4 – Install and open the changelly mobile app
- Step 5 – follow the Changelly step-by-step instructions to swap between Litecoin to Decred. This process will take a few on-chain confirmations to fully complete the swap.
- Enter the coins you’d like to swap and the amount, in our case, LTC to DCR
- Enter your Trust DCR receive address
- Copy the LTC receive address given by Changelly into your Coinbase LTC wallet in the send section. And press the send button.
- Finally, head back to Changelly to wait for the swap to complete
Simple swaps are a great way of getting your first crypto, especially for those coins like Decred that are not listed on Coinbase or other popular centralised exchanges. But once you are established in crypto and looking to buy larger amounts, you should consider trying DCRDEX, which is a peer to peer exchange that offers many advantages, including zero trading fees, no middlemen, and no front running.
What would you say is Decred's biggest barrier to entry?