# TAG EXCHANGE

The **TAG Exchange** is made up of three services.&#x20;

**Token Swap**:&#x20;

Token Swap is a decentralized [AMM](/tagprotocol/technical-glossary/twitter-data-farmin.md) based exchange service that enables users to swap their Tagcoin for BUSD or BNB tokens. User simply has to go to the interface select token they wish to buy or sell than select a token that they wish to trade against. Example: User wants to buy tagcoin using BUSD. The interface will show you current market rate on the interface for the selected pair. Now user simply has to click on swap and system will automatically settle this trade for them.

**Liquidity Pools**:&#x20;

Liquidity pools, in essence, are pools of tokens that are locked in a smart contract. They are used to facilitate trading by providing liquidity and are extensively used by some of the decentralized exchanges.

Users called liquidity providers (LP) add an equal value of two tokens in a pool to create a market. In exchange for providing their funds, they earn trading fees from the trades that happen in their pool, proportional to their share of the total liquidity.&#x20;

Liquidity pools work automatically without the need for counterparty to execute trade,  If you’d like to get a deeper dive into how this works, read our [Liquidity Pools article](/tagprotocol/technical-glossary/liquidity-pools.md).

**Liquidity Farming Pool :**

Farming provides additional incentive to users over the commission they already earn adding liquidity to the liquidity pool.  Users also earn Tagcoin every hour along with the commission they collect from the trades taking place on the exchange.


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