The process of transferring tokens from one blockchain network to another (“migration of tokens” or “token swap”) is a very important part of a modern crypto world.
Token swap appeared as a term to describe the process by which the balance of tokens holders are transferred from their ETH wallets to new compatible one of a specific project. After replacement, tokens are effectively moved from one blockchain network to another.
Here are some pros of the process:
Millions or even billions of dollars are involved in each migration, so the stakes are high. But despite this, the blockchain industry remains mostly ignorant of the migration of tokens and their consequences.
Often, swaps are performed by projects that raise money by the crowdfunding method using the Ethereum blockchain to distribute tokens. The assets at this stage usually act as “substitution” for future tokens, which will eventually be used when the project is released.
For users and investors, their degree of participation in the token migration procedure varies – as a rule, depending on the place where they store their assets.
Storage of coins on exchanges:
Storage of coins in wallets
In practice, this procedure usually entails creating a key for a specific platform (for example, a key in the EOS blockchain) and sending tokens to the key address where they were initially stored after the purchase before the network starts functioning (for instance, the Ethereum key).
Projects typically include timeframes during which users must change their tokens. In platform such as EOS, these are strict deadlines, after which the tokens on the old blockchain will be “frozen” and unavailable to users.
Binance Coin was the last one in this list that switched to its own Binance Chain network. As for now, several projects have already announced the transition from the Ethereum blockchain to Binance Chain.
Atomic Wallet is one of the examples of such. The wallet has its own AWC token, available on the Ethereum network, and it’s also issued on Binance blockchain. So, it is supposed to be a unique solution for both cases. Check out our step-by-step guide on how to swap your AWC tokens.
The risks remain despite the attempts of the exchanges to simplify token-swaps.
Dialogue with the community is one of the ways that can mitigate a common issue: lack of awareness among token owners which is, perhaps, one of the most significant risks.
Token-swaps are not “defenseless” processes: users should trust those who are responsible for the project to implement the transfer of assets following the plan.
However, since the migration of tokens is a relatively new phenomenon, a plan for their implementation often does not exist.