Token Swap Best Practices

Token Swap Best Practices

A practical guide for AI agents helping users execute safe, efficient token swaps.

DEX Aggregators

Aggregators split your trade across multiple liquidity sources for the best price.

Always prefer aggregators over single DEXs — they find better prices by checking multiple sources.

Slippage Settings

Slippage tolerance = how much price movement you'll accept.

Default recommendation: 0.5% for most swaps.

When Swaps Fail

If a swap fails with "insufficient output":

1. Try slightly higher slippage (0.5% → 1.0%)
2. Check if the token has transfer taxes (some meme tokens have 5–10% tax)
3. Try a smaller amount
4. Wait — price may be moving rapidly

Gas Optimization

Timing

Gas prices fluctuate. For non-urgent swaps:

• Cheapest: Weekends, early UTC morning
• Most expensive: Weekdays during US/EU business hours
• Check: etherscan.io/gastracker or L2-specific dashboards

Chain Selection

Recommendation: For routine swaps, use L2s like Arbitrum (where Sperax ecosystem lives) for cents-level gas costs.

Cross-Chain Swaps

When you need to move tokens between chains:

Bridge Options

Best Practices

1. Bridge stablecoins when possible — less slippage risk
2. Check bridge liquidity before large transfers
3. Double-check destination chain — mistakes are irreversible
4. Allow extra time — bridges can be slow during congestion

Common Swap Pitfalls

1. Tax Tokens

Some tokens (especially meme tokens) have built-in transfer taxes:

• 1–10% on every transfer
• Requires higher slippage to account for tax
• Not shown in quoted price

2. Low Liquidity

Signs of low liquidity:

• Large spread between buy/sell price

• 2% price impact on your trade size

• Few liquidity sources on aggregator

3. Front-Running / MEV

Your transaction may get sandwiched (see MEV Protection skill).

Mitigations:

• Low slippage tolerance
• Private transaction submission (Flashbots)
• Limit orders instead of market swaps
• Batch auctions (CowSwap)

4. Approval Issues

Before swapping, you must approve the router to spend your tokens:

• First swap with a token requires an approval transaction
• Consider using exact-amount approvals for security
• See Token Approval Safety skill for details

Swap Checklist

Before every swap:

• Verify token contract address (not a scam token)
• Check price impact (<2% for most trades)
• Set appropriate slippage (0.5% default)
• Compare price across 2+ aggregators for large trades
• Consider gas costs vs trade size (don't pay $10 gas for a $50 swap)
• Check if you need an approval transaction first

Agent Tips

1. Always quote before executing — show the expected output and price impact
2. Warn about high price impact — >2% impact suggests splitting the trade
3. Recommend L2s for small swaps — don't pay Ethereum L1 gas for small trades
4. For large swaps ($10K+) — suggest splitting, using aggregators, and low slippage
5. Cross-chain: bridge stablecoins first, then swap on destination chain
6. Sperax ecosystem users should swap on Arbitrum for lowest costs

Links

• 1inch: https://1inch.io
• CowSwap: https://swap.cow.fi
• Sperax App (Arbitrum): https://app.sperax.io
• Arbiscan Gas: https://arbiscan.io/gastracker