Token Swaps: What Are They, How They Work & Why They're Happening Now

The blockchain industry remains largely uninformed on token migrations and their implications.

Much about token migrations can be discerned from those pioneering the shifts.

For Shawn Wilkinson, founder of decentralized storage startup Storj, which started its token migration in 2017, the rewards simply outweighed the risks.

Why would a project need to complete a token migration in the first place?

A "Token migration" has come to describe the process by which token holders' balances are transmitted from their ethereum wallets to a given project's new compatible wallets.

It's important to note that token migrations are not exclusively linked to live blockchain launches, and also take place when projects merely shift from one protocol to another.

Storj's token migration was prompted by its decision to move from a bitcoin-based protocol to ethereum due to scalability issues.

Despite exchanges' efforts to simplify token migrations, risk is not entirely diminished.

According to Wilkinson, despite initiating Storj's token migration in 2017, users are still migrating their tokens one year on.

Storj has continued to support its token migration, but for projects with hard token freeze deadlines, token holders stand to lose their money if they are unaware of the migration process.