Why do some swaps ask for a memo or destination tag

05 September 2026

Some swaps ask for a memo or destination tag because the receiving blockchain uses a single shared address to process many transactions, and the tag tells the network which account or order the incoming funds belong to. Without that tag, the exchange or wallet cannot route the money to the correct recipient.

How shared addresses work

Certain blockchains - most notably Ripple (XRP), Stellar (XLM), and some exchanges’ deposit systems - assign one public address to many users. This is not a privacy feature. It is an accounting convenience. When you send funds to that address, the network sees a pile of incoming transactions all aimed at the same place. The memo or destination tag is a short numeric or text identifier appended to the transaction. It acts like an apartment number on a building address. The building (the shared address) receives the package, but without the apartment number the mail sits in a lobby, unclaimed.

Why cross-chain swaps use them

When you swap crypto across chains, the service typically gives you a temporary deposit address on the source chain and a destination address on the target chain. For chains that rely on shared addresses, the service provides both the address and the required tag. The tag is not optional. If you omit it, the service’s automated system cannot match your incoming transaction to your order. The funds may become stuck or require manual recovery, which can take days and may involve fees.

Memos versus destination tags

The terms are chain-specific. Ripple uses "destination tag." Stellar uses "memo." Both serve the same function. Other chains, such as EOS or Monero, have similar concepts (memo ID, payment ID). The principle is identical: a label that disambiguates a transaction sent to a pooled address.

What happens if you forget the tag

If you send funds to a shared address without the correct tag, the receiving service sees an unidentified deposit. Some services automatically attempt to match the amount and timing to open orders. This is unreliable. Most require you to contact support, prove ownership of the sending address, and wait for manual processing. During that time the funds are not tradeable or swappable. In a cross-chain swap, the swap itself may expire before the tag is resolved, and you may lose the rate or the entire trade.

Why not just give every user a unique address

Some blockchains charge a reserve fee for each new address. XRP, for example, requires a minimum balance (currently 10 XRP) for each address you create. A service processing thousands of swaps per day cannot afford to lock up that much capital. A single address with destination tags is cheaper and simpler to manage. Other chains, like Bitcoin or Ethereum, do not have this reserve requirement, so swaps on those chains rarely ask for tags. The need for a memo or tag is a direct consequence of the receiving blockchain’s economics, not a deliberate design choice by the swap service.

When you encounter a tag request

During a cross-chain swap, the service will display the tag clearly, usually in a separate field or as part of the instructions. Copy it exactly. Do not add spaces, punctuation, or extra characters. Some tags are numeric, some are alphanumeric. Paste the tag into the memo or destination tag field of your wallet before sending. If your wallet does not support tags for that chain, you cannot use that swap route.

This page is part of a larger guide on swapping crypto across chains. For the broader context of how these swaps work without bridges or centralised accounts, see the hub page that covers the full process from start to finish.

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