I was checking Peakmonsters (https://peakmonsters.com/) this week and found a new article by them: @peak-monsters/using-token-routes-for-splinterlands-assets.
This piqued my interest because I could potentially minimize my costs when swapping crypto from different apps or exchanges. So naturally, I took a look and was amazed because of the following:
As can be seen in the picture, if I were to swap my 80,000 Starbits for swap.hive, I could potentially even earn crypto! So, being someone who tries to be a crypto hoarder, I wanted to get into this new way of earning. But I remembered that one always needs to do their due diligence before acting on some rumors or advice. Thus, I went to work by seeing what would happen if I traded just like the token route told me to. As can be seen in the following pictures:
Swap 1:
Swap 2:
Swap 3:
Swap 4:
Swap 5:
Swapping 80,000 Starbits through the smart swap would have given me 0.11781751 Swap.hive.
If I were to swap the traditional way, I must receive less than 0.11781751 Swap.hive, right?
Normal swap:
Well... sadly not. A direct swap would give me 0.712 Swap.hive for my 80,000 Starbits. Thus, by doing it the "smart" way, I would be losing approximately 0.6 Swap.hive. A possible reason for this could be the low liquidity on the tokens in between, which is also stated during the swap process (see picture underneath for reference).
Price impact problem:
Therefore, even though the token route is a novel idea, I would not suggest using it without testing if the provided route is actually worth it. I would love to see such a tool working. Not for people to make money with, but to make transactions with the lowest swap fees possible. Since avoiding any unnecessary fees is the best for every crypto investor!