What is Mainnet Swap?
Let's find out Mainnet Swap meaning, definition in crypto, what is Mainnet Swap, and all other detailed facts.
At this time, mainnet swap's cryptocurrency tokens are progressively being swapped with freshly produced coins, and all blockchain activity is being transferred to the new chain.
When a cryptocurrency project is in the testnet phase, a third-party blockchain network is employed. However, when it transitions from the testnet to the mainnet phase, users will get native cryptocurrency in return for their third-party tokens. As a result, it's also known as token migration or token swap.
Users can either switch their tokens themselves or leave them to the platform, based on the primary aspects of implementation. Binance, for instance, permitted users to leave previously issued tokens on their accounts so that the network could automatically switch them out for native tokens.
Keep in mind that token migration isn’t always necessarily linked to the introduction of a new blockchain. It can also take place when projects switch from one protocol to another.
Another example would be Storj, which did a mainnet switch, transferring their tokens from a Bitcoin-based protocol to the Ethereum network in order to prevent scaling issues.
When does the Mainnet Swap Happen?
A mainnet swap often happens when a cryptocurrency project migrates its tokens from one blockchain to another or from a third-party blockchain to its native chain. Besides, the mainnet swap is not solely related to emerging blockchains. If a project intends to switch from one protocol to another, it might make an announcement.
The complexities of how a mainnet switch is executed differ from project to project. The majority of projects provide users a timeframe for token transfer, meaning that is possible to lose access to your tokens because they're generally burnt after a specific time period.
Example of Mainnet Swap
Users were urged to move from the Ethereum blockchain to the Binance Chain following the introduction of the Binance Chain mainnet. As a result, ERC-20 BNB token holders began to exchange their tokens for the newly created BEP2 BNB currency.
The mainnet exchange used a 1:1 ratio, thus 1 ERC-20 BNB was worth the same as 1 BEP2 BNB. Following the transfer, all leftover ERC-20 BNB tokens were burnt, leaving just the BNB of the new chain usable.