Swap

Swap in Terraswap works as same as trade in other exchanges. The prices of centralized exchanges for both stock and cryptocurrency move by price bidding system, and supply and demand. These prices change in millisecond intervals, and the market carries out real-time transactions. In contrast, immediate execution of transaction becomes almost impossible due to block time when it comes to the exchange on blockchain.

Therefore, Terraswap adopted a different pricing approach - algorithmic pricing by tracking the ratio of the paired asset within the liquidity pool. To learn more about this approach, please refer to mechanism section.

Prerequisites #

• Tokens and pairs should be deployed on the chain.
• You should know the addresses of tokens and a pair for trade.

Swap by Using CLI #

When offer_asset Is Native & IBC Token #

All transactions can be executed with the below command:

terrad tx wasm execute <contract-address> <handle-msg> <coins>

• contract-address: The pair contract address in a swap transaction
• handle-msg: The method and parameters of the execution, which will be explained following lines
• coins: Transaction execution fee

To learn more about the general rules for handle-msg, please refer to this link.

{
  "swap": {
    "offer_asset": {
      "info": {
        "native_token": {
          "denom": "uluna"
        }
      },
      "amount": "10"
    },
    "to": "<Addr>"
  }
}

swap.offer_asset represents your source asset. It is mandatory to acknowledge the decimal of the token setting when entering the value of swap.offer_asset.amount for an accurate transaction you want. For instance, the decimal of LUNA is 6, and it implies the value 10 of swap.offer_asset.amount expresses ‘10 x 10^-6in the actual amount. That means you should multiply with the matching value,10^(decimal)`.

swap.to is the destination token address. You don’t need to enter the amount to swap into since Terraswap calculates the price algorithmically.

After filling them out, you may choose to change it into an inline string (not necessary if you can make it with multiline):

'{"swap":{"offer_asset": {"info" : {"native_token": {"denom": "uluna"}},"amount": "10"},"to": "<Addr>",}}'

This is your handle-msg. The handle-msg can be used to complete the CLI command to swap tokens.

When offer_asset Is Contract-minted Token #

Swapping contract-minted token to native token is executed with the same logic as above. However, it requires a different handle-msg due to the token system’s difference and implementation. The message looks like:

{
  "send": {
    "contract": "<Addr>",
    "amount": "10",
    "msg": Base64({
      "swap": {}
    })
  }
}

The method is a little bit tricky. Please keep your concentration on!

terrad tx wasm execute <contract-address> <handle-msg> <coins>

In the CLI,

• contract-address: Enter token address

In the message:

• send.contract: Enter pair address
• send.amount: The amount of the origin token to swap from

send.msg.swap is an optional attribute, which is not required for basic swap executions.

Encode {"swap":{}} into base64 encoding. It should look something like: eyJzd2FwIjp7fX0=.

Enter the base64 encoded value for msg of the JSON:

{
  "send": {
    "contract": "<Addr>",
    "amount": "10",
    "msg": "eyJzd2FwIjp7fX0="
  }
}

After then, you may proceed as the above.