How Bake’s Direct Token Swaps Beat the Competition

Swing trading is a simple-to-understand yet difficult-to-master method for capitalizing on the sudden price changes in the volatile crypto market. 

What is Swing Trading?

Swing trading is an opportunistic trading strategy where traders take advantage of sudden price swings in the market. 

Unlike day trading, which requires multiple trades within a single day, swing trading can span from days to weeks, allowing traders to capitalize on more significant price movements. 

The keys to successful swing trading are:

  1. Speed: Executing trades quickly to capitalize on price movements.
  2. Low Fees: Reducing the cost of trading to maximize net profits.
  3. Low Slippage: Ensuring the trade is executed at the expected price.

One of the biggest problems swing traders face is the gap between the “expected price” and the “actual price.”

The expected price is the value gained on the trade alone, while the actual price is the value gained after all fees and slippage have been accounted for.

This gap often catches new swing traders out, specifically due to most trading platforms requiring users to convert tokens into stablecoins before making trades. 

This extra step not only increases costs but also introduces additional slippage, reducing a trader’s profits. 

The solution? Simplify the steps.

Bake’s direct token swaps remove the need for stablecoin conversion, reducing fees and minimizing slippage.

Now you can swap the token you have for the token you need, without converting to stablecoin and incurring additional costs and effort.

Most trading platforms require traders to convert their tokens into stablecoins (like USDT or USDC) before trading them for another token. 

This two-step process incurs double the fees and often results in higher slippage, which can reduce a trader’s profits.

For example, on platforms such as Kraken or Coinbase, a typical trade involves:

  • Step 1: Converting ‘Token A’ to a Stablecoin (incurring a fee)
  • Step 2: Converting the Stablecoin to ‘Token B’ (incurring another fee)

This double conversion increases transaction costs and exposes the trade to potential market fluctuations between the two steps.

Bake’s Approach: Direct Token Swaps

Bake’s “Any Token to Any Token” swap functionality eliminates the need for stablecoin intermediaries, requiring only one transaction for any token swap:

  • Single Transaction, Single Fee: By allowing direct swaps between any two tokens, Bake reduces the transaction to a single step, halving the fees.
  • Reduced Slippage: With only one transaction, the risk of price fluctuations between steps is minimized, resulting in lower slippage.

Cost Comparison

Example for a trader swapping $10,000 worth of Token A for Token B:

Coinbase (Two-Step Process):

  • Step 1: Token A to Stablecoin ($10,000 * 0.50% = $50)
  • Step 2: Stablecoin to Token B ($10,000 * 0.50% = $50)
  • Total Fee: $100

Kraken (Two-Step Process):

  • Step 1: Token A to Stablecoin ($10,000 * 0.40% = $40)
  • Step 2: Stablecoin to Token B ($10,000 * 0.40% = $40)
  • Total Fee: $80

MetaMask (One-Step Process):

  • Direct Token A to Token B Swap ($10,000 * 0.875% = $87.50)
  • Total Fee: $87.50

Bake (One-Step Process):

  • Direct Token A to Token B Swap ($10,000 * 0.40% = $40)
  • Total Fee: $40

Try Bake’s “Any Token to Any Token” Trading

Bake’s Any Token to Any Token trading eliminates the need for stablecoin intermediaries. It reduces the transaction steps, slippage, and fees — making it an optimal choice for swing trading.

You can try Bake’s “Any Token to Any Token” trading directly through the Bake app.

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