A crypto swap is the process of exchanging one cryptocurrency directly for another — without first converting to fiat currency (like USD or EUR). It's the backbone of decentralized finance and a key feature of privacy-focused exchanges.
The Basic Flow
When you initiate a swap on a platform like SyntheticSwap, here's what happens:
**Step 1: Rate estimation.** You enter the amount you want to send (say, 0.1 BTC). The platform queries its liquidity provider and returns an estimated amount you'll receive (say, 1.52 ETH). This is based on the current floating market rate.
**Step 2: Transaction creation.** Once you're happy with the rate, you confirm the swap. The exchange creates a unique deposit address — this is where you'll send your BTC.
**Step 3: You send funds.** You initiate a transaction from your wallet to the deposit address. The exchange monitors the blockchain for your incoming payment.
**Step 4: Conversion.** Once your deposit is confirmed on the blockchain, the exchange converts it to ETH using its liquidity pool or provider network.
**Step 5: Payout.** The converted ETH is sent directly to the wallet address you specified at the start. You never needed an account — just two wallet addresses.
Floating vs. Fixed Rates
**Floating rate swaps** (like the ones SyntheticSwap uses) give you the market rate at the moment your funds are received and processed. Rates can shift slightly from what was quoted, but you typically get fair market value.
**Fixed rate swaps** lock in a rate for a short window (usually a few minutes). The rate won't change, but the provider needs to maintain a reserve to guarantee it — making them slightly less competitive in volatile markets.
What Is a Non-Custodial Exchange?
Non-custodial means the exchange platform never holds your funds. Your BTC goes directly to the deposit address, the swap happens, and ETH goes straight to your wallet. The platform is just the coordinator, not the vault. This is fundamentally safer than centralized exchanges where your funds can be frozen or lost in a hack.
Conclusion
A crypto swap is a simple, powerful primitive. Understanding the mechanics helps you use these tools confidently and safely.