A swap is a fundamental concept in finance (and crypto) that might sound complex, but the basic idea is straightforward.
๐ A swap is an exchange of cash flows or assets between two parties, under agreed conditions.
๐ง ๐ What is a swap (simple explanation)?
A swap is a contract where:
two parties agree to
exchange something over time
it can be:
money
interest rates
currencies
tokens
๐ It's not a direct buy, it's a structured trade.
๐ ๐งฉ Main types of swaps
1๏ธโฃ ๐ฐ Interest Rate Swap (traditional finance)