Swapping in your wallet versus using an exchange

Many wallets now have a swap button. It is not the same operation as a cross chain exchange.

In wallet swaps

Usually route through a decentralised exchange on one chain. Fast, no third party holds anything, and your wallet signs everything. The limitation is that they work within a chain: swapping an asset on Ethereum for an asset on Bitcoin is not something a single chain can do.

Cross chain exchanges

Handle pairs that live on different networks. You send on one chain and receive on another, which requires something in the middle to hold both sides briefly.

Choosing

• Same chain, mainstream tokens: the wallet swap is usually simplest.
• Different chains, or an asset with no presence on the chain you are starting from: a cross chain exchange.
• Privacy coins: almost always a cross chain exchange, since they do not exist as tokens elsewhere.