Exchange on smart contract

Question

Question: Is it possible to upload tokens on a contract and then distribute it to whoever sends ETH to that contract (not create a token as if it is an ICO, but preload already existing one). For e.g. 10 token x for 1eth?

Also is this the way decentralised exchanges works?

Thanks

Answer 1

Yes, this is certainly possible. If all goes as planned, we'll publish a blog post on https://programtheblockchain.com next week showing exactly how to do this.

For a simplified, one-off contract, something like this would work:

address owner = msg.sender;
IERC20Token token = IERC20Token(0x...);
uint256 rate = 10;  // 1 wei == 10 token units
function buyTokens() public payable {
    uint256 tokenAmount = msg.value * rate;
    require(token.transferFrom(owner, tokenAmount, msg.sender));
    require(owner.transfer(msg.value));
}

You would need to allow the number of tokens you're selling to this smart contract first.

And yes, this is essentially how decentralized exchanges work.