Token sweeping, also known as funds consolidation, refers to the process of transferring all assets from sub-address wallets within an account to a designated primary address. This is essentially a single transaction that aggregates scattered funds, streamlining financial management.
Imagine a business owner with multiple storefronts—token sweeping allows them to efficiently centralize revenue from all locations into one account. This functionality is particularly beneficial for centralized platforms (e.g., wallets, exchanges, asset management services), as it ensures sufficient liquidity for payouts and eliminates the need for real-time on-chain settlements for internal transactions.
How Token Sweeping Works: Example
Scenario:
- You receive 100 deposit addresses from Cobo Custody for 100 users.
- Each user deposits 1 ETH, totaling 100 ETH across all addresses.
Custody Workflow:
- Cobo automatically consolidates these funds into your master wallet.
- You only see the total balance (100 ETH) in your Custody dashboard—no need to track individual addresses.
Key Benefits of Token Sweeping
✅ Simplified Management: Reduces manual tracking of multiple addresses.
✅ Enhanced Liquidity: Ensures platforms have adequate funds for withdrawals.
✅ Cost Efficiency: Minimizes transaction fees for UTXO-model coins (e.g., BTC).
✅ Necessary for Account-Model Tokens: Critical for ETH/ERC-20 tokens to avoid fragmentation.
👉 Learn how top exchanges optimize token sweeping
FAQs
1. Why does the on-chain balance differ from my Cobo Custody wallet balance?
Token sweeping moves assets from deposit addresses to a central address. Your Cobo Custody balance reflects the accurate total—ignore individual address balances.
2. Do all cryptocurrencies support token sweeping?
- Yes, but UTXO coins (e.g., BTC) don’t require it.
- Account-model tokens (ETH/ERC-20) must be swept to prevent balance scattering.
3. When does sweeping occur? Is every deposit swept?
Cobo triggers sweeping only when:
[Token Value] > [Cobo Coefficient × ETH Gas Fee Cost]- Small deposits may not meet this threshold (hence exchange minimum deposit rules).
👉 Explore advanced custody strategies
Best Practices for Platforms
- Set Minimum Deposit Limits: Offset gas fee costs.
- Automate Sweeping: Use APIs for real-time consolidation.
- Monitor Gas Fees: Optimize transaction timing for cost savings.
### SEO Notes:
- **Primary Keywords**: Token sweeping, funds consolidation, Cobo Custody, ETH gas fees, UTXO vs. account model.