Financial affairs have been completely transformed by new globalized approaches and digital technologies. Individuals have simple access to numerous currencies and may enjoy using digital assets that aren’t issued by any of the governments.
Decentralization is one of the major reasons why many people are getting so attracted to cryptocurrencies. However, this concept is slightly neglected with centralized exchanges. Luckily, there’s an alternative in the form of swaps, and a popular platform for crypto swaps Swapuz starts using its own liquidity for swap processing. What should you expect from that and why is this piece of news worth your attention?
What is Swapuz and How Does it Work?
As already mentioned, Swapuz is a platform that enables users to process cryptocurrency swaps. It promotes itself as a transparent cryptocurrency platform that provides safe and user-friendly spaces for both individual and industrial traders to make low-fee crypto transfers from one asset to another.
It’s important to mention that Swapuz isn’t a fully decentralized exchange. It’s referred to as a partial custodial solution, which means that the platform is responsible for holding and managing digital assets on behalf of its users. The biggest advantage of such an approach is that it enables better security and implements robust protection measures for crypto storage. Custodial solutions are less likely to be hacked compared to a simple digital wallet.
Swapuz specialists in processing cryptocurrency swaps. The difference between them and basic exchanges is that exchanges involve additional charges for processing. Besides, swaps are processed faster without a centralized authority. On the one hand, this approach is supposed to make such a crypto transfer cheaper, but here is where the liquidity comes into play.
The Basics of Crypto Liquidity
In a nutshell, crypto liquidity refers to the conditions when a user has the possibility to trade digital assets without facing an impact on its prices. Simply speaking, the level of liquidity can define health and the level of activity in the crypto market. Optimal liquidity means that traders and investors feel confidence in their assets, which contributes to the increase in trading volume and stabilizes the prices of the respective assets. This is often the biggest issue for the crypto industry.
The issue is that it’s difficult to define the value of the crypto industry in the conditions of the modern financial system. Although the blockchain concept opened a broad landscape for digital assets, the level of their adoption cannot be compared to traditional assets. As a result, a significantly lower number of financial institutions supply liquidity to the crypto market, which results in instability, higher volatility levels, and public skepticism about the industry.
The fact that Swapuz contributes its own liquidity for transfer processing doesn’t change the whole landscape, obviously, but gives some advantages to those interested in crypto swaps. Before exploring them, let’s find out the importance of liquidity for Swapuz.
The Importance of Liquidity for Swapuz
The fact that Swapuz is now a liquidity provider means several things:
- Better adoption: With optimal liquidity supply, the platform becomes a safer space for swift and cost-effective operations. This will help it to increase the number of audiences while providing the user with more confidence in their assets.
- Dynamic market: Swapuz will become a part of an active crypto market, which will contribute to its reputation as a safe and transparent decentralized instrument and custodial solution. Also, its users are supposed to trade more actively now.
- Better conditions: The use of its own liquidity for swap processing enables Swapuz to provide swaps for more cryptocurrencies. As of today, this list includes BTC, ETH, XMR, LTC, TRX, and USDT (ERC20/TRC20).
Why Is This Change Beneficial for Swapuz Users?
The problem with crypto swap platforms that don’t provide liquidity is that they limit their users in terms of access to trading pairs. In addition to this, a lack of liquidity might slow down the transfer process, resulting in users losing the possibility to make trades at the desired selling or buying prices. Users of Swapuz can now forget about those issues because with liquidity from the platform they’ll enjoy the following advantages:
- High liquidity: The space of crypto swaps will become more dynamic and active, meaning that users will be able to process their operations more swiftly.
- Lower transaction fees: With no centralized authority charging fees and optimal liquidity, users will pay fewer costs for their transactions. Crypto swaps will become more affordable and cost-friendly.
- Improved stability: Better liquidity means a lower chance of facing slippage in the course of trading. Prices of assets will stay up today and will be traded accordingly, so users shouldn’t be afraid of missing a favorable price.
On the whole, Swapuz becoming a liquidity supplier for swap processing is a massive advantage for its users in terms of stability. Of course, bigger risk might mean bigger returns but now this risk is reasonable and less chaotic.
