A token migration or token swap, has become increasingly popular among blockchain projects.
Token swapping means sending tokens from the previous blockchain to a new network. Tokens swap when a cryptocurrency moves from a host blockchain to their own blockchain and convert their host blockchain tokens into their own coins.
Example : Ethereum ERC20 token like the Icon Token (ICX) moving to its own blockchain, and converting their ERC20 tokens into ICX blockchain coins.
1. Mapping
Users who intend to store their tokens in wallets may need to initiate the process manually. They have to undergo token registration, also known as “mapping,” in order to send their tokens from the previous blockchain to the new network.
2. Token swaps and Atomic swaps are different
Token swaps – Users must send their tokens to a particular address and are expected to receive a 1:1 ratio in return. A 1:1 ratio means that a user would receive the same amount of coins he swapped.
Atomic swap means swapping everything or nothing. Earlier in the case of cryptocurrency, peers had to send their cryptocurrency first and trust the receiver to pay them the correct amount of a different currency. But there was a trust issue. Atomic swap overcomes this issue by refunding the cryptocurrency and terminating the exchange,if the receiver does not pay.
3. Where can Token swaps occur?
Exchanges like Binance will usually monitor this conversion, so users do not have to worry about safety. Although, if your cryptocurrencies are stored in independent wallets, you will have to adhere to instructions given out by the respective cryptocurrency team that is administering a token swap.
Binance and CoinSpot intend to support the following MainNet token swaps:
- Ø Ontology (ONT)
- Ø VEN
- Ø EOS MainNet Token Swap
- Ø Tron (TRX) MainNet Token Swap
- Ø ICX MainNet Token Swap
Exchanges to Support (EOS) Token Swap are Bitfinex, Cobinhood, CoinDCX,Bitbns, Zebpay and 9 more exchanges listed on Etherum World news (https://ethereumworldnews.com/binance-bitfinex-and-more-to-support-eos-eos-token-swap/)
4. Swapping period
Users must swap their tokens within a given time window. In projects (Example: EOS) there are tight deadlines until which, if the tokens aren’t swapped, tokens on the old blockchain will be frozen and users will lose accessibility.
5. Importance of token swap
A token swap makes your tokens become tradable, transferable, and usable.
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