Steemit Crypto Academy/S13W1 -Token Swap

Good morning 🌄

Greetings to all of you!
Token swap is most interesting topic to discuss so I would try my best to give my maximum knowledge to all of you through this post so let's start giving answers of all the questions!

Use your own words to define what a token swap is, and interpret the fate of this group of tokens when the final tokens are created

Token swap	When you have to exchange one type of token for another type of token then this process is known as token swap and when a project decides to upgrade their tokens or decide to migrate to a new blockchain then usually token swap is a process that happens

Token swap is a process in which old tokens are transferred to a designated address and new tokens are received as a result

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After token swap if I talk about fate of tokens then it depends upon various factors and one of the important factor is goals of a project that work is the general purpose behind it but more specifically if we talk about general purpose of token swap then it is to improve ,to upgrade the functionality and security of tokens. In this way mostly it is also expected after a token swap that new tokens would be much scalable ,much secure as well as much better in their features and in their benefits.

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There is nothing to be astonished after a token swap if older tokens are becoming obsolete. Users mein also be encouraged by project for swapping their tokens before a token swap for ensuring a smooth transition so in this case after a token swap happening older tokens may not be supported so its very normal thing.

I doesn't mean to say that after I token swap everytime it leads to demise of old tokens. There are some projects that hat give choice to their token holders to choose a way that they may keep the old tokens with them as well as they can also swap them with new tokens.In this way it is a good way to permitting users to decide that they can do anything but they want to do with their tokens depending upon their own choices and preferences.

Explain why blockchains perform an exchange. And is this operation essential during your launches?

Exchanges at blockchain are performed by a process which is called transactions and transactions are most crucial part of a blockchain because they are just like a fundamental building block of blockchain because they involve transfer of assests from one user to another user.

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Every transactions that happens at a blockchain always recorded in the form of block and list of transactions that each block contain is always linked together in a specific order that forms a chain of blocks that's why it is called blockchain as it is also understood by the name (Blockchain).Transaction history remains immutable by this chain of blocks.

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We all know that blockchains are those that allow peer to peer transactions so it means that there is no need of intermediaries while making any transaction that's why it is a very decentralized nature that a blockchain have that's why it always permits for more secure ,more scalable and more efficient exchanges. So that's the reason that blockchain performs exchanges.

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Consensus is a process that we all know which is the key feature of blockchain and all transactions are verified and validated at blockchain by a process which is called consensus and consensus mechanisms could be like proof of work as well as could be like proof of stake but in return whatever they are they always ensures that transactions are legitimate and there is no involvement of fraud activities in them.

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Whenever there is a launch of a blockchain or there is a launch of new token there are exchanges that plays a key role at that time because when ever there is a need to introduce a token then there is also a great need that it should be distributed in between all participants and there are different methods that could be used for distribution of these tokens and these methods are like token swap or AirDrop etc.

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During launches exchanges are very important as well as essential because exchanges provides a platform and a way to all users for trading and acquiring new tokens that's why exchanges plays a role and act as a market place where different users as well as users that are participating can trade these tokens in the form of buying and selling them depending upon their own choice.

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Exchanges also is a great way for the contribution of more liquidity of new tokens so when these tokens are listed on high reputed exchanges then these tokens become more accessible to audience at higher extent and in this way their trading chances also increase.

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Exchanges are very important for blog change because they help out in trading of tokens by providing more liquidity accessibility to participants during a launch but it is much worthy to understand that specific roles of exchanges may vary depending upon specific goals and tasks of the project.

Show how the blockchain that performed the token swap works? Let's take an existing example

I'm sharing an existing example of a token swap so let's discuss it without wasting further time.

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Migration of Ethereum blockchain to binance smart chain is a very interesting example of a token swap. BNB is a token that have been passed from a token swap from being an ERC-20 token on Ethereum blockchain to be a BEP-20 token at binance smart chain.

A series of steps I'm explaining that were involved in this token swap.

Announcement

There was a plan of token swap that was announced by project team that provide details about reasons, as well as also give some of the important instructions to token holders so that they may participate in a proper way.

Snapshot

Snapshot is taken at specific block height and snapshot give surety that token holders would receive equal amount of new tokens that they are holding of previous tokens when they would enter at new blockchain.

Token Burn

Original tokens are locked by project team on original blockchain that gives surety of prevention of double spending and in this way it results in reduction of supply of original tokens.

Token Generation

Token would be generated by the project team and this token would be the definitely new token at new blockchain which follows a specific token standard and in the case of BNB new tokens are generated as BEP-20 tokens at binance smart chain.

Token Distribution

New tokens are distributed to the holders by project team which totally based upon their snapshot that were taked earlier. If I talk about distribution token ratio then it is just like this if I user have one old token then he will receive it will amount of new token which would be one definitely.

Token Swap

Token holders normally need new tokens that's why there is a need to swap there old tokens for new tokens and all this process can be done through different methods like use of dedicated swap platform or use of specific instructions that were already provided by project team and swap is a process that involves transferring of original tokens to specified address and then gaining new tokens as a result.

Listing and Trading

When the token swap would be completed then new tokens would be listed on different exchanges which would result for the support of new blockchain. It would permit token holders to trade their new tokens in market in a very open way so in this way they can buy and sell their new tokens on open market.

Has Steem Blockchain already done a token swap? If so, tell us how. If not, do you think it would have been better to use it?

If I talk about steem blockchain then token swap happens for steem blockchain at a time when platform underwent a change in March 2020. There was a controversial hard fork that occurred at that time and due to this hard fork it results in the creation of new blockchain which is still famous by the name HIVE. Community members that have no agreement with the direction and management of steem were responsible for this hard fork.

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Steem blockchain at the time of hard fork was cloned and token holders that were holding steems received equal amount of new tokens that was HIVE. So it was understood that if there is a user who is holding 10 steem tokens would receive 10 hive tokens.

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This was a token swap that was executed by a snapshot mechanism and Snapshot of steem blockchain was taken at a specific block height which also record the token balances of all token holders and this snapshot was for giving surety that token holders would receive same amount of hive tokens which word new tokens of hive Blockchain.

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After this hard for hive Blockchain operate in independent way from steem. They were different improvements in hive community related to governance and consensus mechanism and there was just one aim behind it and that a was about the creation of more decentralized platform.

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If I talk about more better option from both of them then I think both are good but it depends upon the specific features of both blockchains as well as it also depends upon personal choice of a user that which one is better to use so definitely there would be some users that would prefer to use steem blockchain as well as there would be some users that would prefer to use hive Blockchain.

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Within steem community there was definitely I division after token swap and after the creation of HIVE. So it results in some users to move to hive and support it and some users remains attached to steem blockchain. Again at last I want to say that it depends upon features in which you are more interested so depending upon your choices you can choose more better option from both of these blockchain for your use. But my personal interest is in steem blockchain because I really love every feature of this blockchain.

Is there any risk when using it?

While using token swaps there can be some risk that I am explaining here.

Scams and Fraud

When you are using token swap services then there is a higher risk of encountering scam activities that's why verification is very important so you should always verify either the platform is secure or not or service provider is secure or not before you are performing any type of transaction and also you should look for reputation,reviews as well as other security measures before doing anything.

Loss of Funds

During token swap there can be loss of funds because we all are humans and there are thousand mistakes that we made everyday that's why there could be a mistake while doing any transaction like we can send our tokens to wrong address by mistake that's why this type of error could be very unlucky for you and could result in permanent loss of your funds.

Lack of Regulations

Cryptocurrency industry lacs comprehensive regulation in many jurisdictions that's why there maybe very little protection for users for protecting them from any activities in which there is involvement of fraud so it is very important to understand some of the important risks that are associated with token swap in your specific location.

Technical Issues

Technical glitches is something that is very common in a token swap platform that's why token swap platforms are very vulnerable to have technical issues so it is very important to stay updated with advanced security practices and very important to choose platform which have higher reputation and that give priority to protection to user.

I want to invite

@suboohi
@steemdoctor1
@fjjrg
@harferri
To participate 😀

Have a nice day☺️