Token Swaps
At the core of the TangleSwap protocol lies a token-swapping application that enables users to seamlessly exchange their cryptocurrencies for one another.
Core Technology
Swaps, also known as trades, represent the most fundamental interaction with the TangleSwap protocol. The process is simple: a user exchanges a token they currently own for another token they desire.
Token swaps on TangleSwap operate in a fully permissionless and decentralized manner. This ensures users can access the platform without the approval from a central authority, maintaining full control over their assets and eliminating the need for third-party custodianship.
When compared to centralized solutions — like CEXs — swaps that use the TangleSwap protocol are different from traditional order book trades in that they do not require one user (the buyer) to accept another user's (the seller) proposed trade. Instead, swaps execute against a passive pool of liquidity, with a different class of users — known as liquidity providers — earning fees proportional to the amount of active liquidity that they provide.
To enhance user experience and security, widely-recognized token addresses are displayed as verified within the default token list in the TangleSwap interface. However, anyone is able to add as many tokens as they like to their own local list via the search bar, or by directly typing the token address in the browser URL. If you are a project developer and would like to apply to whitelist your token in the default list, please refer to this guide.
When compared to other decentralized exchanges, TangleSwap's stands out due to its state-of-the-art concentrated liquidity technology, which facilitates high-volume transactions even for pools with modest liquidity. At the same time, high-frequency traders are further empowered by range orders, optimized trading fees, and a feeless base transaction layer, making TangleSwap a powerful tool in the decentralized finance landscape.
Orbit Router
Beyond the features previously discussed, TangleSwap users benefit from minimal price impact, slippage, and fees. This is made possible by our intelligent split-routing algorithm, the Orbit Router, which swiftly identifies the most efficient trading routes for any given token pair.
The Orbit Router employs an advanced smart routing system to secure the best prices for traders. Its features include:
- Split routes that execute trades across multiple pools and hops simultaneously.
- A robust algorithm that considers a large dataset to find better prices.
- Gas cost awareness to ensure that every added step yields a net positive outcome for your trade.
The Orbit Router primarily enhances trade prices by splitting trades across multiple pools. Unlike traditional AMM routers, which execute trades through a single route, the Orbit Router can divide your trade across up to seven paths. Each of these paths can be further divided into up to three individual hops, to take advantage of liquidity depth across different pools.
In the example below, the trader saves $227,832 (roughly ~57%) by splitting the route on a USDT/USDC trade. It's worth noting that the presence of multiple fee tiers — 0.05%, 0.3%, and 1% — in TangleSwap's Concentrated Liquidity Market Maker (CLMM) makes an optimized router more relevant than ever.
Range Orders: next-gen Limit Orders
Limit orders, an important feature for users who wish to trade assets at a specific price point rather than the current market price, are a common option in traditional finance and CEXs. However, in the realm of AMM DEXs, limit orders have been a challenge to implement due to the decentralized nature of these platforms. Traditionally, enabling limit orders in AMMs has required reliance on third-party services or additional support smart contracts, introducing unnecessary complexity, trust issues, and additional costs.
TangleSwap, leveraging the unique capabilities of Concentrated Liquidity, offers a novel solution to this problem: Range Order Swaps. This innovative trading style is made possible by the customizable liquidity positions and single-sided asset provisioning features inherent to CLMM technology.
In practical terms, a range order is created by providing a single asset as liquidity for a given pool within a specific price range. For a comprehensive understanding of this process, please refer to the interactive guide below.
Click here to delve into the mechanics of range order swaps, complete with illustrative examples! 🤓
For the purpose of our examples, let's assume a user holds $USDC tokens and wishes to sell these tokens for $SMR, which currently has a market price of 0.06 SMR/USDC.
Example 1 — Narrow Range: emulating a Limit Order ✅
"sell my USDC for SMR when the price reaches 0.04" by creating a single-sided liquidity pool (100% USDC and 0% SMR) within a narrow price range outside of the current market price, such as 0.04 - 0.04001. This strategy effectively mirrors a classical limit order!For instance, if the asset price dips below 0.04, the user's position automatically converts to 100% SMR and 0% USDC. Meanwhile, the user always retains the option to withdraw their liquidity (effectively 'cancelling' the range order) at any time without incurring any costs or experiencing impermanent loss.
💡 IMPORTANT: If the pool price crosses your desired threshold (0.04 in our example), you will need to manually withdraw your funds from the liquidity pool to execute your range order! Otherwise, the price may cross the threshold again in the opposite direction, effectively 'reverting' your range order. The TangleSwap crew is actively developing and partnering with automated CLMM strategies (including fully-automated range orders) as we work towards an impeccable, 'minimal-effort' user experience. The crew will announce once these automated solutions become available, but in the meantime, feel free to use range orders as described above!
Example 2 — Broad Range: earning fees with Range Orders 🧠
If the asset price dips below 0.04, the user's position will become 100% SMR and 0% USDC.
Meanwhile, if the price drops below the current 0.06 SMR/USDC market price and the user wishes to exit their range order position before the target of 0.04 is reached, they can withdraw their liquidity at any time, but it's important to note that the results will be equivalent to having their range order partially filled. For instance, if the price drops to 0.055, the user will receive 75% USDC tokens and 25% SMR tokens.
Lastly, if the market price moves in the opposite direction than intended by the user (following our example, the price could rise to 0.08), then this strategy will be equivalent to the user holding their assets in their wallet without taking any particular action. They are free to withdraw their USDC tokens (effectively 'cancelling' the range order) at any time, without any cost or [impermanent loss](/onboarding/glossary#impermanent-loss).
While limit orders typically cost fees to the user, range orders now generate fees as the order is being partially or fully filled. That's right — instead of paying swap fees, with range orders you earn the fees instead!
Please note that the Trading interface will be refined with future updates to provide a highly user-friendly and intuitive display for creating and managing range orders. This is a complex endeavor though, and part of a broader effort towards a 'minimal effort' user experience along with fully-automated CLMM solutions. Still, while you wait to relish the ultimate user experience, you can already place range orders through the Liquidity Pool interface!
Explore our Analytics for comprehensive data on tokens and liquidity pools within the TangleSwap protocol.
How To: Swap Tokens
Check out our Explorer's Manual for a step-by-step guide on trading aboard the Tangleship, or navigate to app.tangleswap.exchange/swap to directly experience seamless token swaps by yourself.