This lesson teaches you what actually happens when you click “Swap”

PART 1: What Happens When You Click “Swap”?

Behind the scenes:

1. You submit a transaction

2. It goes to the blockchain

3. A smart contract executes it

4. You receive tokens

Key Insight:

PART 2: Gas Mechanics

What is Gas?

Gas = the fee you pay to execute a transaction

On Ethereum:

• Gas can be expensive

• Depends on network congestion

On EVM chains (like Arbitrum, Avalanche):

• Gas is cheaper

• Faster confirmations

Why Gas Exists:

• Pays validators

• Prevents spam

• Secures the network

Key Insight:

Important Components:

Gas Price

• Cost per unit

  
  

Gas Limit

• Max gas you’re willing to use

Operator Rule:

Always leave enough gas tokens in your wallet

PART 3: Router Contracts

What is a Router?

A smart contract that executes your trade

Example:

Using Uniswap:

• You don’t trade with another person

• You interact with a router contract

What the Router Does:

🔹 Finds liquidity pool

🔹 Calculates price

🔹 Executes swap

Key Insight:

PART 4: Swap Fees

Types of Costs:

🔹 Gas fee (network)

🔹 Swap fee (DEX)

Example:

• Uniswap fee: ~0.3%

• Gas: varies

Key Insight:

PART 5: Confirmations

What is Confirmation?

When the network finalizes your transaction

Depends on:

• Chain speed

• Network congestion

Key Insight:

PART 6: Trade Impact (Slippage)

What is Trade Impact?

How much your trade moves the price

Example:

• Small pool + big trade 👉 price moves against you

Key Insight:

You are part of the market—you move it

Slippage:

Difference between expected and executed price

Operator Rule:

Always check slippage before confirming

PART 7: Expected Output

Before confirming a trade, you’ll see:

🔹 Tokens you receive

🔹 Minimum received

🔹 Price impact

Critical:

“Minimum received” protects you from bad execution

Example:

• Expected: 100 tokens

• Minimum: 95 tokens

👉 If worse → trade fails

PART 8: Why Trades Fail

❌ Not enough gas

❌ Slippage too low

❌ Price moved too fast

Key Insight:

PART 9: Real Execution Risks

Hidden realities:

• Price changes during confirmation

• MEV bots (front-running)

• Low liquidity traps

Key Insight:

PART 10: Ethereum vs EVM Chains (Practical View)

Ethereum:

• Expensive

• Reliable

• Deep liquidity

Arbitrum / Avalanche:

• Cheap

• Faster

• Slightly more risk

Operator Rule:

Match chain to trade size

Putting It All Together

Before every trade:

Do I have enough gas?

What are total fees?

What is slippage?

What is minimum received?

Final Question:

If this executes worse than expected… am I still okay with it?

Practice Mission

Open a DEX (like Uniswap)

Simulate a trade

Observe:

• Gas fee

• Price impact

• Minimum received

Challenge:

Compare the same trade on:

• Ethereum

• Arbitrum

👉 Notice cost difference

Final Thought