When executing swap trades on Panaroma Decentralized wallet, users are guided through the process with simplified steps, but there are important considerations:
Cost of Swap Transaction:
Users pay both a transaction fee (to the Ethereum blockchain miner) and a swap fee (to the DEX settling the order).
Ethereum network congestion can result in high transaction fees, making Binance Smart Chain a more cost-effective option.
DEXes generally charge around 0.3% of the swap amount.
Transaction Deadline:
A swap transaction is valid for about 20 minutes after submission.
On busy blockchains like Ethereum, a sufficient transaction fee is crucial for processing within the deadline.
A low fee may lead to a pending state beyond the deadline, resulting in a failed swap action, still incurring network fees.
Price Slippage:
Price slippage is the difference in token price between order placement and transaction completion due to market changes.
Panaroma Decentralized Wallet estimates potential slippage, and users can set acceptable slippage levels.
Setting excessively low slippage may cause transaction failure due to an inability to execute within the indicated slippage.
Price Slippage Tolerance:
Slippage tolerance sets a minimum acceptable amount of tokens received, as a percentage of the total swap value.
Users can manage acceptable variations in token amounts by setting slippage tolerance.
Swap Transaction Fees:
Ethereum transaction costs can be high, with a plain ETH transfer costing up to $10.
Swap transactions can exceed $50, making it less economically viable for lower amounts.
Approval Transactions:
Selling ERC20 or BEP20 tokens requires an Approval Transaction, granting permission for the DEX to deduct tokens.
DEXes cannot use tokens for trades without an approval transaction.
Users are advised to carefully review these points, considering transaction costs and potential risks, before proceeding with swap transactions.