Swaps

Introduction

Swaps are the most common interaction with the Blaster protocol. Users select an ERC-20 token they own and a token they want to trade for. Executing a swap sells the owned tokens for the desired tokens, minus the swap fee awarded to liquidity providers. This process is permissionless, though web interfaces may introduce additional permissions and execution behaviors.

Unlike traditional order book trades, swaps on Blaster execute against a passive pool of liquidity, with fees proportional to the liquidity provided.

Price Impact

In Blaster, the relative value of assets shifts during a swap, resulting in a final price between the start and end prices. This dynamic, inherent to AMMs, affects every swap. Greater liquidity at a price point reduces price impact, while lesser liquidity increases it. Real-time approximate price impact is shown via the Blaster interface, with warnings for high impact.

Slippage

Slippage occurs when prices change while a transaction is pending. Slippage tolerance sets an acceptable margin of change; if the execution price is within this range, the transaction proceeds. If it falls outside, the transaction fails. This is similar to a delayed market-buy order in traditional markets.