There are plenty of ways to convert cryptocurrency into fiat. However, sometimes, users don’t want to cash out entirely and only to reposition from one cryptocurrency into another.
Clearly, going into fiat and then rebuying doesn’t always seem to be the optimal approach for many reasons, including having to pay conversion fees more than once.
This is where cryptocurrency swaps prove to be particularly efficient and convenient, and that’s also where Bitpapa comes into the picture.
Understanding Cryptocurrency Swaps
Services that offer cryptocurrency swaps function somewhat similarly to orderbook-based exchanges and peer-to-peer marketplaces. They all allow the users to do essentially the same thing (convert cryptocurrencies) but with different instruments. Above all, it’s the user experience that’s different.
Orderbook-based exchanges allow users to fine-tune their trades. They can set orders at precise price points that they want to be executed and filled in and pre-set the order amount as well. Of course, they also have their drawbacks, especially for people who don’t wish to trade professionally. They also require users to deposit fiat currency into their accounts with which they can buy crypto. This is in stark contrast with peer-to-peer (P2P) marketplaces, where users have to trade with each other, and the marketplace only stores the cryptocurrency, which is then used to secure trades.
These types of platforms, however, are not very flexible when it comes to the supported trading pairs. They are very well-suited for cashing in and out of some of the most popular cryptocurrencies, such as BTC and ETH, but if users want to convert into some other cryptocurrencies, they might run out of options.
Cryptocurrency swap services combine the simplicity of a P2P marketplace with the wide range of pairs that an advanced orderbook-based exchange supports.
Cryptocurrency swaps work best when there is a need for an immediate solution to swapping one cryptocurrency for another with the least amount of effort. That’s one of the reasons why so many exchanges and marketplaces have enabled this option for their users – as a useful addendum to the list of features these platforms already support.
That’s also exactly what Bitpapa Swaps bring to the table.
Streamlining User Experience
Bitpapa Swaps build upon and extend the functionality of the Bitpapa platform – a global marketplace for secure P2P trades. At its core, the platform provides users with a safe and secure trading environment by facilitating the proper and timely execution of the trades that Bitpapa’s users make between themselves.
The platform currently supports the storing, sending, receiving, and trading of such cryptos as Bitcoin, Ethereum, TON, Monero, and the stablecoin USDT. Users can buy these with fiat and sell them for fiat, but they can’t convert them directly into one another.
Bitpapa Swaps is designed to fix this particular inconvenience.
There are at least two use cases where cryptocurrency swaps may come in handy. In the first case, users might be looking to book their profits now and probably reinvest the gains later. Without swaps, they would need to first sell their coins for fiat and then buy them back via some fiat payment system (for example, bank transfer), fees included.
With cryptocurrency swaps, it is possible to engage USDT as a proxy for fiat without having to actually use fiat and thus avoid the payment system fees altogether (let alone save on time and labor).
In the second case, users might be looking to sell one crypto for another, say, Bitcoin for Ethereum, anticipating or catching the rise of the latter against the former. As in the previous case (without swaps), they would need to first move from Bitcoin into fiat and then get back into Ethereum – the same fees generously apply (twice).
Now, cryptocurrency swaps allow hopping from one crypto to another without facing the necessity of using fiat currency as an intermediary. To do that, the user will only need to jump on the Bitpapa Swaps page, select a cryptocurrency pair, enter the amount of crypto to convert, and start the conversion.
The cross rate at which the swap occurs is determined using the same technique the price is calculated for P2P trades (as an average of prices received from 7+ major exchanges). The user can either choose a floating exchange rate or a fixed one. In the latter case, he will have a 10-minute exchange rate lock-in, within which he needs to complete the swap.
The main idea behind Bitpapa Swaps is to offer a simple tool that will help Bitpapa users quickly exchange one cryptocurrency for another, with no trading knowledge required.