Blackhole swap is an Avalanche C-Chain exchange for trading tokens and supplying liquidity directly from your wallet. You need C-Chain assets and spare AVAX for fees before using the Blackhole crypto exchange. For a wallet trade instead of a centralised exchange deposit, choose Blackhole swap to exchange your tokens.
What does a Blackhole swap do?
A Blackhole swap trades one C-Chain token for another using liquidity supplied by other users. Blackhole is a decentralised exchange, or DEX: you keep control of your wallet while a smart contract, which is code on the blockchain, carries out the trade. There is no exchange account balance to fund first.
Traders draw from liquidity pools, which hold tokens available for exchange. Your trade changes how much of each token a pool holds, so a larger trade can move the price further. If a suitable pool has little liquidity, the amount you receive may be much lower than the headline market price.
A trade can sometimes pass through an intermediate token rather than one direct pool. WAVAX, the token form of AVAX, is a common example on Avalanche. WAVAX represents AVAX one for one, but you still need ordinary AVAX in your wallet to pay network fees.
What do you need before you start?
You need a wallet you control, tokens on Avalanche C-Chain, and enough AVAX to pay for transactions. Core and MetaMask are examples of wallets that can use C-Chain. Unlike a centralised exchange, your wallet signs each action, and its recovery phrase remains your responsibility.
If your funds are still at an exchange, choose its Avalanche C-Chain withdrawal network when sending to your C-Chain wallet address. A token with the same name on another network is a separate asset. Sending it on the wrong network will not put it in the C-Chain balance you need for this trade.
Leave some AVAX unspent even if AVAX is the token you plan to sell. Network fees, often called gas, are paid in AVAX and vary with the work a transaction requires and network demand. A token approval may also need its own transaction and fee before the swap.
How do you swap tokens from your wallet?
To swap tokens on Blackhole, prepare the wallet, inspect the trade, then sign the required transactions. These steps take you from an exchange balance to a completed wallet trade.
- Fund your C-Chain wallet with the token you want to sell and a little AVAX for gas. For example, if you plan to exchange part of an AVAX balance, keep enough AVAX back to pay for the trade and a later transaction.
- Connect the wallet while it is set to Avalanche C-Chain. Connecting lets the exchange read your public address and balances; it does not, by itself, authorise a trade. Check that the address shown is the one holding your funds.
- Choose the token you will sell, the token you want, and the amount. Check the token’s contract address, its unique identifier on C-Chain, if names or symbols look alike. This matters especially for tokens with several bridged or copied versions.
- Read the quote before signing. It estimates the tokens you will receive and reflects the available liquidity. For an illustrative example, if a quote offers 10 tokens with 1% slippage tolerance, the trade may complete at no fewer than 9.9 tokens; below that, it should fail.
- Approve token spending if your wallet requests it. Approval is a separate permission for the trading contract to use the token you are selling, and it can cost gas. Check the amount being approved; an earlier approval may mean this step is unnecessary.
- Confirm the swap in your wallet after checking the amount, network fee, and minimum received. The transaction then goes to C-Chain for execution. A confirmed trade changes your wallet balances; a failed trade leaves the tokens unswapped, though gas may still be spent.
- Check the resulting balance in your wallet or a C-Chain transaction explorer. If a token does not appear automatically, verify its contract address before adding it to your wallet’s display. The on-chain balance, rather than the wallet’s token list, tells you whether you received it.
How do you provide liquidity instead?
Provide liquidity by placing tokens into a pool so other people can trade against them. A pool commonly needs both tokens in a specified ratio; check the pair and required amounts before committing. Your pool position represents a share of its assets and may earn a share of trading fees.
Liquidity is different from holding the same two tokens in your wallet. As traders use the pool, the mix of tokens you own changes. If one token rises sharply against the other, your position may be worth less than simply keeping both; this difference is called impermanent loss.
For an illustrative example, suppose you put equal values of AVAX and a dollar-pegged token into a standard 50/50 pool. If AVAX doubles in price, that pool position would be worth about 5.7% less than holding the original tokens, before earned fees. Check whether expected fees could reasonably cover that gap before supplying a volatile pair.
What should you check before committing?
Check the full cost and the amount you can actually receive or withdraw. A trade has three separate moving parts:
- The pool fee, which depends on the pool; an illustrative 0.3% fee is $0.30 on a $100 trade.
- Price impact, which grows when your trade is large relative to available liquidity.
- C-Chain gas, paid in AVAX for each required transaction.
Before signing, verify the C-Chain network, token contract, and minimum received in one pass. Crypto transactions cannot simply be reversed if you chose the wrong token or accepted an unwanted price. The Blackhole crypto exchange can carry out a wallet trade or hold a liquidity position, but the choice depends on your aim: do you want the other token now, or are you willing to hold a changing pool position to earn trading fees?