Decentralized exchanges (DeX) like Uniswap, PancakeSwap, SushiSwap, and others offer the opportunity to trade without holding funds on a centralized exchange. Here, you can discover new tokens, which can be very interesting as an investment, but also risky. Therefore, be cautious. Here, we’ll show you how to use Uniswap and trade ERC-20 tokens and other cryptocurrencies directly, with the help of a web3 wallet.
The Uniswap platform was built in 2018 on top of the Ethereum blockchain, the second-largest cryptocurrency project in the world by market capitalization. It is compatible with all ERC-20 tokens and supports wallet services such as MetaMask, Trust Wallet, WalletConnect, Coinbase Wallet, Portis, and Fortmatic…
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How to trade on the decentralized exchange (DEx) – How to buy ERC-20 tokens without a centralized exchange directly from the MetaMask wallet
Let’s now take a look at how to trade on the decentralized exchange Uniswap, perhaps directly from the MetaMask wallet. (Uniswap is the same as Pancakeswap, Suschiswap, 1inch etc.)
Using DEX is straightforward. The principle is quite simple. We’ll set aside some technical details for the geeks and focus on Uniswap from the perspective of a future user.
The decentralized exchange with the unicorn logo allows swaps directly on the blockchain.
What this decentralized exchange does is allow you to connect your wallet with just one click and then freely swap your ETH or Ethereum tokens at the current market price.
So, start with your wallet and set up MetaMask. You can use our guide, and don’t forget to transfer some ETH into it. Fees on the Ethereum blockchain are paid in Ether, most of which are subsequently burned, which, by the way, has led to its deflationary nature.
Once you’ve completed the first step, you should have your new wallet in your browser, such as Mozilla Firefox, Brave, or Google Chrome, with some ETH ready for trading.
- Now, navigate to the Uniswap interface (https://uniswap.org/), launch the application, and connect your wallet by clicking on “connect” at the top right corner.
- Log in to your wallet and allow it to connect to Uniswap.
- Choose the token you want to exchange, enter the amount, and click on “swap.”
- Verify the details and confirm the transaction in your wallet.
- Wait for the transaction to be added to the Ethereum blockchain (You can track the progress of the transaction by copying and pasting the transaction ID on https://etherscan.io/)
Trading on DEX has its pros and cons.
Advantages
No KYC (you don’t expose your personal data to attack), Cryptocurrencies remain in your possession at all times (no custody), Access to the latest ERC-20 tokens without waiting for listing.
Disadvantages
Scam tokens (beware, there is no third party to select tokens, anyone can list anything on Uniswap), Higher fees (each trade occurs on the ETH blockchain), Lower liquidity and slippage (you may get a higher or lower price than expected at the time of trade entry, especially during high volatility).
The wallet interface allows users to choose the fee level (usually from three options) based on how urgently they need the transaction to go through. Keep in mind that fees can vary significantly depending on the current blockchain congestion.
Conclusion Many projects in the past have provided attractive returns to investors. Traders often seek ways to gain access to those with the greatest potential early on. A significant advantage of decentralized exchanges like Uniswap is the absence of third parties to whom you would have to entrust your crypto.
However, we strongly caution against investing in unknown altcoins. Before acquiring any token, take the time to research and verify as much information as possible about it. Watch out for phishing – only visit the Uniswap website using the correct address.
