Use Arbswap when you want to trade Arbitrum tokens from your own wallet, or supply a pool if you accept liquidity risk. Compared with leaving coins on a centralised exchange, choose Arbswap to swap tokens, add liquidity, or farm rewards from that wallet. An Arbswap token swap needs ETH for gas; a pool position also carries impermanent loss.
How Does Arbswap Work From Your Wallet?
Your wallet signs transactions that trade against liquidity pools instead of placing orders against another trader. An automated market maker (AMM) uses the tokens in a pool to quote a swap. Depositors supply those tokens, and trades change both the pool’s balances and its quoted price.
You need the tokens you intend to use on the correct Arbitrum chain, plus ETH there to pay gas. Check the chain before moving funds: ETH held on Arbitrum One cannot pay for a transaction on Arbitrum Nova. Your wallet address may look the same on both, but the balances are separate.
How Do You Swap Tokens and Check the Cost?
Connect your wallet, choose the token you will spend and the one you want, then enter an amount. Verify the token’s contract address if its name or symbol could be copied. Check the quoted output, price impact, and minimum amount you would receive before signing.
Before the trade, say your wallet holds 0.10 ETH and no USDC on the selected chain. After swapping 0.05 ETH at an illustrative $2,000 per ETH, it holds roughly $100 in USDC and just under 0.05 ETH. Pool fees and price impact reduce the USDC received; gas reduces the ETH left in your wallet.
Price impact is the change your own trade causes in the pool’s price. A large trade against a shallow pool can cost more than the gas. Slippage tolerance covers a further price move between the quote and execution: at an illustrative 0.5%, the transaction should fail if the output drops more than that allowance.
Spending an ERC-20 token may first require a separate approval transaction, which also uses gas. Review how much the approval permits, then confirm the swap in your wallet. Keep some ETH unspent so you can make your next transaction.
When Should You Add Liquidity or Farm Rewards?
Add liquidity when you are willing to hold both tokens and expect your share of trading fees to justify the risk. A pool deposit gives you a claim on its reserves, often represented by LP tokens. If a matching yield farm accepts those LP tokens, staking them can add rewards on top of the pool position.
The deciding comparison is your result against simply holding the two tokens. In a standard 50/50 constant-product pool, say you deposit $100 of ETH and $100 of USDC. If ETH doubles, holding them would be worth $300; the pool position would be worth about $283 before fees and rewards. That roughly $17 gap is impermanent loss.
Check the pair’s liquidity, expected trading fees, farm reward token, and any lockup before depositing. A displayed farm APR annualises a rate that can change; it does not guarantee a profit or protect you if either token falls. I would start with a small swap and consider farming only after the likely rewards justify holding both assets.