Working of crypto currency swaping (Exchanging) in Crypto exchange

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I am new in crypto. I know something about cryto currency and its working. I am curiosity about the working of Crypto exchange like binance,coinbase...etc... My doubts is

  1. Some exchanges provide the swapping facilities like one click swapping from one cryto currency to another(That is without use of trading mechanism of buy order and sell order)...How it is possible ?

  2. Actually the exchanges is hold a large amount of crypto asset for the users to provide one click swapping facilities to the users ....???

I expect a detailed explanation as possible from this community. Thanks

salman faris

Posted 2019-09-30T03:56:31.563

Reputation: 35

Answers

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Any service or exchange allowing conversion of one asset into another (whether it is decentralized or centralized), is eventually executing the trade on an orderbook with a large exchange or liquidity provider.

Larger exchanges like Coinbase, Binance, Bitstamp etc. operate their own orderbooks, which have liquidity from users and market makers.

Second tier services like Shapeshift, Changelly etc. maintain balances in all the coins they support on larger services, and when a user wishes to convert an asset, they will execute a corresponding trade on these services.

Raghav Sood

Posted 2019-09-30T03:56:31.563

Reputation: 10 897

That is they are actually use the trading mechanism for provide swapping facilities. Is it right...??? – salman faris – 2019-09-30T04:04:21.440

Yes, that's right. – Raghav Sood – 2019-09-30T05:15:32.147

Can you clear one more doubts please. How it implement?? using trading api that are provided by coinbase like platform...??? – salman faris – 2019-09-30T05:19:54.563

The implementation details will vary depending on the services used - most exchanges offer REST or websocket APIs, while market makers might offer FIX APIs. It's impossible to provide a good answer without more details – Raghav Sood – 2019-09-30T05:23:38.800

Thanks a lot @Raghav Sood – salman faris – 2019-09-30T05:25:35.613

This answer is not entirely correct. Bisq (decentralized exchange) only allows peer-to-peer trades -- there is no interaction with another "larger" centralized exchange. Also, one can use Atomic swaps to exchange cryptocurrencies with no middleman / liquidity provider / escrow.

– Jonathan Cross – 2019-10-01T15:18:40.410

Asked: 2019-09-30T03:56:31.563

Viewed: 30 times

Active: 2019-09-30T04:00:42.883