Decentralized Exchange THORSwap to Support Cross-Chain Swaps for Over 4,300 Ethereum-Based Tokens
Starting Thursday, users are able to swap supported ERC-20 tokens across eight blockchains in a single transaction.
Aug 25, 2022 at 1:22 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/UVMBKGWFIJDOJHQW5LHKOGFP3Y.jpeg)
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The developers behind THORChain-based decentralized exchange (DEX) THORSwap this week said the protocol had added more than 4,300 Ethereum-based tokens to its cross-chain liquidity aggregator – a move that allows users to swap them into other supported blockchains, such as Bitcoin, Cosmos, Dogecoin and THORChain.
Liquidity aggregators rely on smart contracts to gather token prices across a number of decentralized exchanges (DEX) on other blockchain networks. This allows users to get better tokens prices on their trades with low slippage. Slippage is the difference between the expected price of a trade and the price that's actually achieved, while gas is the blockchain transaction fee.
Using liquidity pool aggregators has benefits compared to using blockchain-based bridges to transfer funds to various networks. Liquidity pools refer to a collection of tokens or digital assets added and locked by users in a smart contract that provide essential liquidity to DEXs. Bridges, on the other hand, are a tool that lets one port assets from one blockchain to another.
However, bridges are susceptible to hacks due to their operating mechanism, with over $2 billion so far just this year. This is where products like THORSwap help, allowing users to trade thousands of tokens across several networks without having to switch between DEXs or using bridges.
The more than 4,300 added tokens are part of CoinGecko's token lists that are used to access token names and data to input on a DEX before trading. The lists do not include any fake tokens and contain a direct link to check any token's legitimacy on blockchain explorer Etherscan.
"The benefit of using a decentralized exchange protocol like THORSwap is always having self-custodial control of your assets," THORSwap's pseudonymous product manager "paperx" explained in a Twitter message to CoinDesk. "Users connect their own native chain wallets (Bitcoin, Ethereum, BNB Chain, Cosmos, Litecoin, Dogecoin and THORChain, among others) to swap assets on one and receive assets on another directly into their personal wallet."
"There is no need to create accounts or the possibility of funds being frozen for withdrawal because they interact directly with THORChain liquidity pools to perform cross-chain swaps in one click, always receiving the assets they want directly to their personal wallet," paperx further explained.
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Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.