Steemit Crypto Academy Contest / S13W1 - Token Swap

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.

Explain why do blockchains perform a swap? and is this operation essential during its launches?

Show how such blockchain which performed token swap? take an existing example.

Has Steem Blockchain already performed token swap? If so, tell us how. If not, do you think it would have been better that used it?

Are there any risks when using it?

It's really I pleasure going through such post, I really learnt a lot writing this article, hopefully you would learn much more after going through my article. As we the name implies token swap is the replacement or upgrading of a Blockchain where by a new Token is shared to represent the old token

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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.

As the name implies Token swapping is the act of swapping a token, as we all know swap can also mean replacing, updating or changing. Token swap, is a famous term in crypto currencies and blockchain world.

Token swap can best as a process whereby a tokens are exchanged for new ones, usually there is always a unique rate or conditions to be met. This action is typically triggered by various reasons, such as Blockchain upgrades, Blockchain migrations to different blockchain networks and hard-forking an existing Blockchain technology.

As i have said when a token is swapped, it's focused on the transformation of a crypto asset. It's mostly as a result of Blockchain update.This act is have been adopted by bigger Blockchain technology like Bitcoin and Ethereum which brought about Bitcoin cash, Bitcoin SV And Ethereum classic.

One major reason for a token swap on any Blockchain is to develop the technology underlying the cryptocurrency, thou some were done for wrong reason. For example on the case of steem and hive, to me i still say the fork is a wrong decision. Blockchains may identify issues with the existing features, such as consensus mechanism, speed, security issues.

To handle such issues, the Blockchain may then be upgraded and as we know every hard fork produces new tokens. The user's who meet the requirements are then expected to receive new token which are usually airdroped.

and interpret the fate of this group of tokens when the final tokens are created.

They fate of these crypto currency or token depends on so many reasons, it's might be influenced by the value of the old Token, it might be influence and popularity of the old Token, it might also be influenced by the reason of the new token and it might be influenced by how the upgrade was done.

After some upgrades the old token loses its total value, while the new token grows its value, in some case the old coins still has higher value than its new token, in some case the both token co-exist and the value of the both token fluctuate (that is to say at times the old Token value goes higher than the new token and after some period they need token higher value than the old token).

For example LUNC was created as a result of Luna hard fork who security failed and lose value but as it stands the new token Lunc is valued at $0.0005 and Luna is valued at $0.4 according to www.coinsmarketcap.com.

Same thing occurred in the biggest and first Blockchain technology known as Bitcoin, after the hard fork Bitcoin Cash was born but currently Bitcoin cash is valued at #185,430.44 naira and Bitcoin is valued at #22,859,796.80 naira.

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Explain why do blockchains perform a swap? and is this operation essential during its launches?

Blockchains perform swapping for different reasons, and the significance of this operation during a the blockchain launch depends on the Blockchain and it's validators mission. A token swap can be defined as the process of exchanging one cryptocurrency or token for another, between the mother and child child Blockchain.

Major Reasons for Token Swaps

• Blockchain Upgrades:

Blockchains often updates and perform technical upgrades to enhance its scalability, its security, or it's decentralization. After the upgrades, old tokens will be swapped for new ones to ensure its compatible with the upgraded Blockchain.

Token swap is needed to prevent Blockchain issues like double-spending. For example Bitcoin Blockchain team triggered it's upgrade to improve it's processing speed and this act brought about the new Blockchain technology Bitcoin Cash.

• Consensus Algorithm Changes:

If a blockchain project decides to change its consensus algorithm for example in most cases, there are more changes of Work to Proof consensus mechanism to Proof of Stake consensus mechanism. Token swap would be necessary, if a new Blockchain is created and a new Token is produced.

Tokens produced form one consensus mechanism might not be suitable for the other consensus mechanism, so a swap ensures a smooth transition and continued use of the native tokens.

• Blockchain Migration:

Some Projects sometimes migrate from One chain to another chain. In most cases this occurs as a result of misunderstanding between the witness or validators, which at the end might cause a hard fork, for example in the case of STEEM and Hive.

There was a misunderstanding between the witness and Justin sun take over, this caused so many bad witness trigger a hard fork, which in turn brought about the hive Blockchain and give Token. The hive supporters were airdroped with the hive Token, according to the value of STEEM the hold or save.

Is a Token Swap Essential During Launches?

The need of a token swap during a blockchain's launch depends on the Blockchain and the motives of the forks. In most cases, new blockchain projects are launched with their native tokens, so therefore a swap is not necessary in every launch. Token swaps are more commonly associated with established blockchain network that are undergoing total different changes.

During a crypto blockchain initial launch, validator have the opportunity to redesign the blockchain to their wishes, including the creation of a native token. Users who participate in the Blockchain from the beginning will receive these new tokens, and swaps are not necessary or essential.

However, as the project changes and if major upgrades become necessary, as discussed earlier, token swaps may come occur. So, while token swaps are not totally essential during the the launch of a blockchain, they can become necessary in the improve its growth, it's technical improvements. Infact not all forks produce a new Token, that's to say soft fork won't need to produce a token.

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Show how such blockchain which performed token swap? take an existing example.

In this question I would be talking about Tron Blockchain Token Swap.
Tron (TRX) a blockchain crypto blockchain founded steemit current CEO Justin Sun triggered it's token swap in month June 2018. The migration marked a vital moment in Tron's development because it changed from using Ethereum-based ERC-20 token to its own official and independent blockchain, which introduced its native token TRX.

Reasons for the Tron Token Swap:

• Main-net Launch: Tron's main goal was to launch its own mainnet, separating itself from its initial dependence as ERC-20 token on Ethereum blockchain, that's to say before the token swap Tron was running on Ethereum Blockchain. The token swap was needed to give Tron it's own Blockchain by swapping the ERC-20 TRX tokens to TRX tokens.

• Blockchain Performance Enhancement:

Been dependent on Ethereum blockchain hinder the goal Tron from achieving as much as it wanted, for example it always wanted to offer improved security, scalability, faster transaction confirmation times, and lower transaction fees on its independent Blockchain and Ethereum Blockchain wasn't offering those benefits.

The Tron Token Swap Process:

• The Token Registration: TRX token holders were asked to register their Ethereum wallet addresses that stored their ERC-20 TRX tokens. This registration process was needed to ensure that the corresponding TRX tokens would be airdrop on the Tron Blockchain.

• The Snapshot Stage:

The snapshot of Ethereum blockchain was taken at a specific block height, noteing the TRX token balances of registered addresses. This snapshot contained the details for the allocation of TRX tokens on the Tron Blockchain.

• The Exchange Support: Then Cryptocurrency exchanges played an important part in the
success of Tron token swap. Crypto Exchanges that backed the migration of Tron Blockchain ensured that it was user-friendly for TRX token holders who stored their old asset on their exchanges.

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Has Steem Blockchain already performed token swap? If so, tell us how. If not, do you think it would have been better that used it?

Yes, our lovely steem blockchain had experienced a of token swap on a Tuesday in the year 2020, some witness were in disagreement with the new Tron and Justin Sun takeover. An investor known as Justin sun bought steem from it's former owners and CEO.

The were so many things that caused the issue, according to what I was told the didn't like the development brought by Justin sun and Tron foundation so the old witness tried to frustrated Justin sun take over by lieing that Justin sun was planning a hostile takeover which was a lie

Infact the initial ran a soft fork to upgrade the Blockchain with the sole motive to slash steemit over 65 million worth of steem, but with help of binace and other legit platform the bad guys were defeated and Justin sun and steemit reclaim their frozen steemit, also the bad witness were all removed all thanks to the exchanges and the consensus mechanism.

Before the defeat the bad witness successfully hard fork the steem blockchain and created a new Blockchain and token know as Hive, in other words they took their problem and left our lovely Blockchain.

Before I forget they were also problem and issues between the two teams because of the power down time but as we can see the team suggestions the 4 weeks power down won the team supporting 13 weeks power down.

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Are there any risks when using it?

As we know there are always risk when doing something this powerful, so therefore it's advised that we are to make researches to avoid falling victim, Even after making research, it's wise we take maximum caution before taking risky actions.

• Financial Risk:

This refers to the chances of losing money or financial asset, because this token swap is risky, users can loss so much financial money if the project fail or if hackers take advantages of the condition. For example we can face different financial risk like market movement risk credit risk or liquidity risk. Any of this risk can befall a user if a token project goes wrong.

• Fallen Victim of Scam:

It's no News , that so many are taking advantage of the crypto technology to scam and Rob people of the hard earned money or crypto asset, so many Blockchain upgrade or token swap are scam and fake but if you are really knowledgeable and you make necessary research you would easily find the right project and avoid scam initiative.

• Price Volatility:

As we know the crypto market is very volatile, so therefore the price of any asset can change at any period. The price of the native token might grow too high or too low to swap with the new token because it would be more expensive or too cheap.

• Technical Risk:

As we all know the technicality of Blockchain technology is very complex and complicated and ever programmer knows complex programs are expected to generate bugs that are difficult to solve, that's to say the complexity of a Blockchain needs only an advance programmer to handle efficiently.

• Loss of asset:

There are high probability that the would be cases of lost asset when swapping tokens is high because, they may be sent to a different wallet address, some users might hide or steal the token during the swap.

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Conclusion

I must say in some Blockchain the token swap was very necessary, while in others It wasn't.

Note: It's important to note it's not in every upgrade that new token are produced, that's to say it's only after a hard fork a Blockchain that this new Token are produced. In soft fork they are no new coin or token .

This article so is my most time consuming because I enjoyed it, it took me hours of constant research and writing. Thanks for going through remember starrchris cares ❤️.

_{I would like to invite my friends @malikusman1, @suboohi, @sahmie and @ngoenyi .}