Your not-so-technical quick guide to getting into defi
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// THREAD //
You've heard of bitcoin and ethereum and you've probably used coinbase before.
You see me and 100+ other people calling out new projects left and right.
None are on coinbase, so you wonder where we're buying them from?
Decentralized exchanges, mainly @Uniswap.
Let's begin!
You see me and 100+ other people calling out new projects left and right.
None are on coinbase, so you wonder where we're buying them from?
Decentralized exchanges, mainly @Uniswap.
Let's begin!
0. Big picture
- You're going to have your own wallet.
- You fill it with ETH (other assets work too).
- You can now interact with defi web apps.
- You can swap tokens on Uniswap!
Next thread will go over how to stake and what that is ;)
- You're going to have your own wallet.
- You fill it with ETH (other assets work too).
- You can now interact with defi web apps.
- You can swap tokens on Uniswap!
Next thread will go over how to stake and what that is ;)
1. Acquire ETH or USDC
In order to interact with decentralized exchanges you need your own wallet.
Let's say you have ETH on Coinbase.
Two options:
1. Send eth from coinbase to ledger -> connect to metamask
2. Create a metamask wallet -> send eth from coinbase to metamask
In order to interact with decentralized exchanges you need your own wallet.
Let's say you have ETH on Coinbase.
Two options:
1. Send eth from coinbase to ledger -> connect to metamask
2. Create a metamask wallet -> send eth from coinbase to metamask
2. Why a physical ledger?
A physical ledger offers security when transacting/holding crypto.
It's your own "physical" wallet.
In order to transact with defi apps, it requires physical confirmation for transactions.
And a bunch of other security advantages, DYOR :)
A physical ledger offers security when transacting/holding crypto.
It's your own "physical" wallet.
In order to transact with defi apps, it requires physical confirmation for transactions.
And a bunch of other security advantages, DYOR :)
3. Connect with metamask
Metamask is a chrome extension that connects you to almost every decentralized app on the web.
Install + create an account and write down your seed phrase (never save on any cloud network...write it down)
Congrats you now have your own wallet.
Metamask is a chrome extension that connects you to almost every decentralized app on the web.
Install + create an account and write down your seed phrase (never save on any cloud network...write it down)
Congrats you now have your own wallet.
4. Adding ledger to metamask
(skip if you don't have a ledger)
Metamask allows you to add your physical ledger to metamask.
Do this for extra security.
Any transaction will require you to approve transactions using your physical ledger.
(skip if you don't have a ledger)
Metamask allows you to add your physical ledger to metamask.
Do this for extra security.
Any transaction will require you to approve transactions using your physical ledger.
5. Fill your new wallet up
Send your ETH from coinbase to your new wallet!
Hint: you can click on your account name on metamask to copy your public wallet address.
Send funds there and wait!
Metamask will update in real time once it receives the funds!
Send your ETH from coinbase to your new wallet!
Hint: you can click on your account name on metamask to copy your public wallet address.
Send funds there and wait!
Metamask will update in real time once it receives the funds!
6. Uniswap
Ok so Uniswap is what is called a 'DEX' or decentralized exchange.
It allows you to swap one eth token for another eth token on demand.
No need to wait for order flows and fills.
Say I want to exchange $ETH for $VSP or $SHOPX.
Uniswap is the way.
But fees!
Ok so Uniswap is what is called a 'DEX' or decentralized exchange.
It allows you to swap one eth token for another eth token on demand.
No need to wait for order flows and fills.
Say I want to exchange $ETH for $VSP or $SHOPX.
Uniswap is the way.
But fees!
7. Connect Metamask to Uniswap
Go to app.uniswap.org
Click the "connect" button in the corner.
Then click metamask!
It will ask for viewing permissions.
Accept! Your wallet is connected to Uniswap.
This is how we'll connect metamask to all other web apps as well!
Go to app.uniswap.org
Click the "connect" button in the corner.
Then click metamask!
It will ask for viewing permissions.
Accept! Your wallet is connected to Uniswap.
This is how we'll connect metamask to all other web apps as well!
8. Swapping
Ok so now you should see that you can swap "from" a token "to" another one.
Click ETH for the "from".
And search up the token you want to swap to!
Then enter how much ETH you want to use to swap!
If price impact is high, then there might not be enough liquidity!
Ok so now you should see that you can swap "from" a token "to" another one.
Click ETH for the "from".
And search up the token you want to swap to!
Then enter how much ETH you want to use to swap!
If price impact is high, then there might not be enough liquidity!
8b. Liquidity
If the token you want to swap to has no liquidity the "Price Impact" will be very high.
This means no one is providing liquidity for the swap so try checking on other platforms like sushiswap!
If the token you want to swap to has no liquidity the "Price Impact" will be very high.
This means no one is providing liquidity for the swap so try checking on other platforms like sushiswap!
8c. Token not found
If you type in the token but you can't see it on Uniswap, try this.
Find the official token addresses on the project's official website or twitter or coingecko (photo below)
Click on the copy icon next to the contract on coingecko.
Paste into Uni!
If you type in the token but you can't see it on Uniswap, try this.
Find the official token addresses on the project's official website or twitter or coingecko (photo below)
Click on the copy icon next to the contract on coingecko.
Paste into Uni!
8d. Don't trust anything but official sources
Never trust any person or account that is posting contracts.
They can easily create a fake address and have you send money to them.
Only trust a project's official tweets or website info.
Coingecko is pretty reliable as well.
Never trust any person or account that is posting contracts.
They can easily create a fake address and have you send money to them.
Only trust a project's official tweets or website info.
Coingecko is pretty reliable as well.
9. Fees!
Ok this is the worst part of defi currently.
This is why L2 (layer-2 solutions exist).
The ETH network is slow and expensive.
To transact you have to pay fees.
It's the price you pay to access all of defi :)
Click "edit" for gas fee.
Click "fast" and save.
Ok this is the worst part of defi currently.
This is why L2 (layer-2 solutions exist).
The ETH network is slow and expensive.
To transact you have to pay fees.
It's the price you pay to access all of defi :)
Click "edit" for gas fee.
Click "fast" and save.
10. Confirm and Swap!
So once you submit your fee, the transaction will be sent to validate!
If it goes through successfully, Uniswap will show you a notification!
You can also add the token on Metamask and see if the balance changed!
Congrats you have now used a DEX!
So once you submit your fee, the transaction will be sent to validate!
If it goes through successfully, Uniswap will show you a notification!
You can also add the token on Metamask and see if the balance changed!
Congrats you have now used a DEX!
11. L2-Solutions
Huge innovations are coming to ETH soon.
Uni v3 will implement @optimismPBC which is going to dramatically reduce fees and speed up transactions.
Currently other L2 solutions exist as sidechain implementations like $MATIC.
Another thread on this is coming!
Huge innovations are coming to ETH soon.
Uni v3 will implement @optimismPBC which is going to dramatically reduce fees and speed up transactions.
Currently other L2 solutions exist as sidechain implementations like $MATIC.
Another thread on this is coming!
12. Done
That's it! That's the very basics of getting started.
You'll def need to do more research, but now you have your first glimpse into getting started with defi apps like Uniswap.
Sounds complex but this becomes muscle memory fast.
Enjoy and RT if helpful!
- Matt
That's it! That's the very basics of getting started.
You'll def need to do more research, but now you have your first glimpse into getting started with defi apps like Uniswap.
Sounds complex but this becomes muscle memory fast.
Enjoy and RT if helpful!
- Matt
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