Because of the growth in DeFi one of the protocol types that has seen the most growth has been DEX’s (Decentralized exchanges). Because of the popularity of DEX’s in this blog, we will explain to you how to buy a token on a DEX.
What is a DEX
A DEX or Decentralized exchange is an on-chain protocol that lets you buy and sell your crypto assets. This is quite similar to (but not the same as) exchanging your crypto on a centralized exchange. Only with a DEX, no one is going to stop you or check your ID when trading. This makes DEX an unstoppable trading platform that can be accessed at any time. Besides the option to trade on a DEX, they usually also give you the option to provide liquidity. Providing liquidity gives you the possibility to earn some extra interest on your crypto when it’s staked with the DEX. Note that this is not always risk-free.
How to make a trade
For this example we will use the current most popular decentralized exchange out there, Uniswap (V3). To start you can click here to go to the Uniswap website that supports a portal to the Uniswap protocol.
In the top right corner of the page, you will see a button that says “use Uniswap”, Click this button to go to the Uniswap interface. A new page will now open with the Uniswap Swap/trade interface. In the right corner of the page, you will see a button that says “Connect to a wallet”. Press this to connect your wallet. This will give you the following options, MetaMask, WalletConnect, Coinbase wallet, Formatic, or Portis. If you do not have a wallet yet that can connect to Uniswap you can find one here. Just simply use the “find your wallet” function on our website, go to extra’s and select “Dapp Connect”.
Connect your wallet to Uniswap
In this example, we will use MetaMask in a chrome browser. So we click on Metamask, and this will open a MetaMask pop-up that lets you select your account and then connect the wallet to Uniswap. When your wallet is connected to Uniswap it displays your Ethereum address on the top right where it first said: “connect to a wallet”.
Now you’re all ready to trade, so let’s choose a coin/token. So in our example, we choose to trade from Ether ETH to NEXO tokens. Just simply select the currency you want to trade from at the top and the currency you want to trade to at the bottom. Choose the amount you would like to exchange. So now Uniswap will show you their respective dollar value and the amount you will get.
When you’re ready click swap and confirm the swap details on the next pop-up screen. Once you click confirm swap Metamask will open with the cost details and gas fee price for that swap. So if you press confirm on MetaMask the Swap will be signed by your wallet and the trade takes place on-chain. To see if and when your swap is confirmed you can check it in real-time on https://etherscan.io/.
So now you have Swapped a token/coin on Uniswap! Simple right?
Other Decentralized Exchanges
Although there Uniswap is the biggest and most trusted DEX on Ethereum. There exist more other Decentralized exchanges worth trying. So below a small list of these Decentralized exchanges:
- Pancake Swap (Binance Smart Chain)
- MDEX (Binance Smart Chain and Huebi Eco Chain)
- SushiSwap (Ethereum)
- BurgerSwap (Binance Smart Chain)
- Quick Swap (Polygon)
Got any questions?
We hope this blog post gave you the right information so you can use the Uniswap protocol. So if you have any further questions about Decentralized Exchanges or anything else crypto-related? Feel free to ask in one of our community groups on either Facebook and Telegram. Because our admins are happy to help.
We hope this article helped you get a better understanding of how you can use a DEX and your MetaMask wallet. If you have any Questions regarding Blockchain or Bitcoin? Feel free to ask them on our Facebook or Telegram group. Because we are happy to help whenever we can!