🔥 Swap Cross-Chain/Local
With Blueshift Cross-Chain Swap, you can exchange a token from the current application network for a token from another or the same network supported by Blueshift. This has become possible thanks to Blueshift's cross-chain portfolios, which aggregate liquidity from all supported networks into a single cross-chain token reserve.
If the swapping route includes at least one cross-chain portfolio, the swap will take place in three stages and is called Cross-Chain Swap:
Execution of the swap in the source network (current application network).
Execution of the swap in Blueshift.
Sending tokens to the wallet in the destination network.
If only local portfolios are present in the swapping route, the swap will take place in a single stage executed in the current application network and called Local Swap.
By default, the route-building algorithm tries to suggest a route without cross-chain portfolios (if it is possible), even if this route is not the most optimal in terms of price impact. You can cancel the local swap priority in the swap settings.
Swap mechanics
Blueshift uses portfolios instead of pairs to make a swap. Each portfolio defines virtual token pairs. A pair ties two tokens and defines their exchange price. Every pair works as a CFMM pool with virtual liquidity reserves. The amount of virtual reserves depends on existing tokens reserved in the portfolio and internal Oracle token price history.
Every swap affects the prices of the tokens participated. A swap price is always less beneficial than the current price. Price impact shows how much fewer tokens the user will receive after the swap than if he would be swapped at the current price (without price impact).
The larger the swap amount, the greater the impact.
The larger tokens pair liquidity, the lower the impact.
If a trader swaps token A to token B and sees the price impact equals to 5%, it means that he will get 5% less amount of tokens than without price impact. In other words, the trader will acquire the token B at the new less beneficial price.
The usage of virtual pairs instead of real ones allows using complete token liquidity in each virtual pair swap. It is much more efficient than using partial liquidity dedicated to ordinary real pair swaps. Here is an example:
Consider three ordinary real swap pairs [liquidity in brackets]:
[1 000] BLUES <-> milkADA [4 000] [1 000] BLUES <-> USDT [5 000] [1 000] BLUES <-> ETH [30]
Now consider a portfolio with same total liquidity: BLUES [3 000], milkADA [4 000], USDT [5 000], ETH [30]
virtual pairs in this portfolio will be:
[3 000] BLUES <-> milkADA [4 000] [3 000] BLUES <-> USDT [5 000] [3 000] BLUES <-> ETH [30]
As you see BLUES liquidity for each virtual swap pair is 3 times higher than the real one. The larger tokens pair liquidity, the lower the impact.
Virtual pairs help to reduce price impact with the same amount of total liquidity.
Swaps are available between tokens that are a part of the same portfolio as well as between tokens that belong to different portfolios. Blueshift’s smart router defines the most price-efficient route for each swap. Swapping through a route that contains more than 2 tokens is called “multihop”. You can turn off multi-hop swaps in transaction settings.
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