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What really happens during a token swap?
Let’s break it down 👇
🧵
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A token swap sounds simple:
“You give one token, you get another.”
But behind the scenes, it’s a smart contract running the show—not a person.
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Here’s how it works:
▪️ You approve the swap
▪️ A smart contract takes your token
▪️ It taps into a liquidity pool
▪️ It sends you back the new token
No order book. No human. Just code.
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These swaps happen mostly on decentralized exchanges (DEXes) like:
🔹 Uniswap
🔹 PancakeSwap
🔹 SushiSwap
All of them rely on smart contracts and pools of tokens provided by other users.
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So why do token swaps matter to investigators?
Because they’re used to:
⚠️ Obscure the origin of funds
⚠️ Break traceable patterns
⚠️ Swap into stablecoins or privacy tokens
Swaps aren’t just for trading—they’re for hiding too.
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And the kicker?
One swap can involve 5–10 tokens.
All in one transaction.
If you’re not watching carefully, it’s easy to lose the trail.
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Token swaps may look harmless.
But for crypto investigators, they’re often where the laundering starts.
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