HUPAYX(HPX) Token Swap
With the scheduled release of our official Blockchain MainNet, our current ERC-20 based HUP utility token, is scheduled for a swap with the newly created HPX token, which is based on Cosmos Chain. The swap is scheduled from beginning of July 2020 at CoinBene exchange.
What is a Token Swap?
A token swap is a process by which one cryptocurrency is exchanged for another at a predetermined rate. Unlike selling one coin to buy another, a token swap is the replacement of one coin for another, so it means that you are required to exchange the old coin for the new one, or you will lose value.
A token swap is not a simple rebranding, as that can happen without the participation of anyone holding the coin. With a rebranding, tokens might change names or have their ticker symbol switched to something else, but with a token swap, the underlying blockchain that supports the token is being changed entirely, and holders are compelled to take some kind of action. in short, a token swap — is a token migration, the transfer of digital tokens from one blockchain onto another blockchain. In our case, from Ethereum (ERC-20) into Cosmos Chain.
Why Do Token Swaps Happen?
The process of building the foundations of one’s own blockchain, called a “mainnet,” can itself be a process requiring investment. This creates a sort of chicken and egg problem for aspiring blockchain companies. They want to issue tokens to fund the creation of their blockchain, but they also need to build their blockchain to have tokens to issue. In our case HUPAYX is entirely self funded.
The way through this conundrum is to create a token on an existing blockchain, which we did. Through an extension of smart contract functionality, some blockchains have the ability to create a second layer on top of their own native token. In this way, organizations can have their own token on someone else’s blockchain, to raise funds while they build their own blockchain.
The most famous blockchain for creating custom tokens is Ethereum, which created what’s known as the ERC-20 standard. ERC stands for “Ethereum Request for Comment,” and it’s an internal system for proposing upgrades to the Ethereum blockchain. 20 is simply the number of the specific proposal that made token issuance possible.
Although almost any blockchain capable of smart contracts could potentially be used to build tokens, depending on how that blockchain is governed, ERC-20 tokens are by far the most common. It was the ERC-20 standard that led to the explosion of new coins after it was implemented in November 2017.
How Do You Swap Your Tokens?
Token swaps might have slight differences in process, HUPAYX will provide all the necessary instructions to our token holders for smooth token swap process. But there are generalities you can familiarize yourself with to get a sense of how it works.
First, whether you let an exchange handle it for you or you do it yourself, you should be aware that in advance of the token swap, trading on the current token will often be halted so as to not confuse the process with any trades that might be in progress. Also, as some coins have mechanisms for coin creation and distribution in the form of block rewards, air drops, or other offerings, those will also be halted.
So you need to be aware that it’s not just a matter of the deadline for when the token occurs — different exchanges may take action to prepare at slightly different times in advance.
You can often opt for an exchange to handle the swap for you. In this case, you simply put your tokens on the participating exchange. They hold it in a wallet for you, and when the swap happens, they will create a new wallet for within your user account on that exchange, and then transfer new tokens into it. The wallet with the old tokens will be destroyed. Once trading begins on the new token, you can withdraw them to your own wallet or trade them, or whatever you usually do with your tokens. Simple as that!
If you want to handle the swap yourself, then it’s largely the same. Generally speaking, the people who issued the coin you are currently holding will issue a wallet or online site that you either download or register with, respectively. In either case, you will see an account with 2 wallets, one for the old coin and one for the new. You will be prompted to transfer your old token to a specific address. When you do, you should soon see the wallet for the new account be credited.
While the 2 processes are essentially the same, there are a few reasons why the manual method carries a little more risk. One is that the wallets and sites created by the token issuers are often newly created, or created specifically for this task, so it may be an unfamiliar interface, and it may not work as described or designed.
Also, the process described here is the broadest outline, there may be specific option boxes to tick or other requirements that might create a little confusion. Lastly, if somehow you make a mistake, there will be no recourse. If you let an exchange handle the swap, if something goes wrong you might be able to appeal to them for help.
In any case, as you can see, a token swap is nothing that requires any specialist knowledge or should concern you too much. So long as you take action in the specified time and carefully walk through each step, you should find it a very manageable process.
Reference: https://www.investinblockchain.com/what-is-token-swap/
