SWAP

Swap for tokens of your choice on the SWAP page.

The SWAP page allows traders to exchange tokens in their wallet with other tokens. A swap request from token X to token Y will be processed depending on the relative value of these tokens within Pangea Swap at the time of the request. Excluding the swap fee, the trader will receive the remaining value of token Y. The swap fee will be distributed to Liquidity Providers and DAO funds.

Price Impact

Definition

Token prices (exchange ratio) may fluctuate before and after the swap due to the total volume of the swap requested by users. This value loss is known as the price impact.

Example

Let’s say you requested to swap for KLAY with $1000 worth of oUSDT when KLAY was $1. During the swap process, KLAY prices will rise, leading to you receiving approximately 980 instead of the originally anticipated 1,000. With this discrepancy of 20 KLAY, the price impact you experienced would be 20/1000 x 100(%) = 2%.

Principle

Commonly found across AMM-based DEXs, the price impact occurs because a swap drives up the no. of token X and drives down the no. of token Y, causing a fluctuation in the token Y price against token X. (Y/X) The breadth of fluctuation becomes bigger if 1) the liquidity pool is smaller or 2) users request for bigger-volume swaps. Greater volatility within the two tokens will lead to a bigger price impact.

Conclusion

Pangea Swap provides concentrated liquidity. Provided that liquidity levels are similar within the pool, we may offer a more negligible price impact compared to other Uniswap V2-based DEXs. You can see their expected price impact based on the dollar value and no. of possessed tokens. We advise the users to be cautious about exchanges when a strong price impact is anticipated.

Slippage and Slippage Tolerance

Definition

Slippage refers to the difference between the expected price of a swap request (considering the price impact) and the actual transaction price. Slippage tolerance is how much tolerance you are willing to allow to submit a transaction.

Example

Let’s say you requested to swap for KLAY with $1000 worth of oUSDT when KLAY was $1. You would expect to receive 980 KLAY considering the price impact, but slippage could bring the actual amount down to 970. In this case, slippage would be 10/980 x 100(%) = 1.02%.

Principle

Slippage may occur if and when it takes time for the actual transaction to take place since the swap request, during which time there would be price fluctuations within the pool.

Conclusion

Slippage is a variable that users cannot know about in advance. For a better trading experience, you can set your slippage tolerance. For instance, if you set a 0.5% slippage tolerance, transactions up to 0.5% or lower of actually anticipated token Y volume will be allowed, and the swap will be automatically canceled if the slippage exceeds 0.5%.

How to Swap

1. Set the tokens and amount.

2. If this is your first time trading the token with the Pangea Swap, then you'll need to approve the token first.

3. Change slippage tolerance(if needed).

4. Check for swap information on confirmation page and click on ‘swap’ button.