I was talking about decentralized exchanges though (Sorry if I should say CEX and DEX but I thought smart contract automatically means DEX). You should check out 1inch for example, it does use a smart contract for limit orders on ETH DEX like Uniswap. Those smart contracts were built on as far as I know, Ethereum, or copies from Ethereum.
There is a big difference between an "exchange" and a "token swap". An exchange (whether decentralized or centralized) is where you can trade any cryptocurrency with almost any other cryptocurrency for example BTC with LTC. A token swap on the other hand is where you can only swap a token for another token. For example there is NO option to swap BTC for WBTC only ETH for WBTC.
This is useless.
Also 1inch is not even an exchange or a token swap, it is a DEX aggregator where it searches other token swap platforms (using the wrong term DEX) and gives the user the best option.
OK, then obviously we are going into technical differences here but dude, I know 1inch is not a DEX but a DEX aggregator but there you go, you are saying they (and everyone else in the DEX industry including educators) are all using the wrong term.
For me, if they call it a DEX it has evolved. They are already articles talking about DEX using orderbooks (which is what you are thinking of) and DEX using liquidity pools like Uni.
It is a big difference, but they are merely different mechanisms, both are DEX.
An exchange can have as many pairs as they make available. If an exchange only has BTC-fiat, it is still an exchange. Your "token swap" example is just the same in BTC-USD market you can ONLY exchange BTC for USD. All the exchanges talk about trading pairs. And all the "token swaps" talk about swap pairs. I think you will be surprised to learn now "token swaps" have much more capacity to swap between networks (which is why I ask you to look at 1inch) but as you say not for BTC (again to my knowledge) but of course, you can use a regular exchange for interchain assets and even fiat but this is because none of this interaction is on chain. You even have Yobit exchanging with assets that don't even exist, anything is possible offchain:)
I'm sorry, I really think your posts are very good and I enjoyed them a lot here but on this case I think sometimes Bitcoiners like to argue semantics when the rest of the world using those things has moved on and accepted that "token swaps" are also exchanges, with the difference that every exchange (swap) happens on chain in liquidity pools (as opposed to off chain orderbooks), which makes it difficult, but not impossible these days, to manage inter-chain swaps.
P.S. I totally hate defi it's the most toxic and scammy world but we were talking about use case for smart contracts and I see it and accept it even if I don't like it.
