Basic tutorial on how to choose and use the best DeFi (Decentralized Finance) exchanges. Please note that the information may vary slightly depending on the particular DeFi exchange you choose to use.
Step 1: Research and choose your DeFi exchange
First of all, you need to choose the DeFi exchange you want to use. Some of the best known as of 2021 are Uniswap, Sushiswap, Curve Finance, and Balancer. When doing your research, consider the following factors:
- Trading volume: The higher the trading volume, the better the liquidity, meaning you can make bigger trades without moving the price too much.
- Variety of Tokens: If you want to trade a variety of tokens, choose an exchange with a wide variety of tokens available.
- Fees: DeFi exchanges often charge a fee for each trade. Make sure you understand how much this fee will be.
Step 2: Preparing your wallet
To use most DeFi exchanges, you will need an Ethereum wallet such as Metamask, Trust Wallet or WalletConnect. Download and install the wallet, then make sure you have some ETH in your wallet to cover gas fees.
Step 3: Connect your wallet to the DeFi exchange
Once you have chosen the DeFi exchange and prepared your wallet, the next step is to link your wallet to the exchange. Usually, this can be done by clicking a button like "Connect Wallet" or "Unlock Wallet" on the exchange's homepage.
Step 4: Exchange of tokens
Now that your wallet is connected, you can start trading tokens. On most DeFi exchanges, there will be an interface with two input boxes. In the first, enter the token you wish to exchange, and in the second, the token you wish to receive. Once you have entered your trade details, click on "Swap" or "Trade" to execute the trade.
Step 5: Confirm the transaction
After clicking on "Swap" or "Trade", your wallet will ask you to confirm the transaction. Check the transaction details carefully, including gas fees, before confirming.
Final note on safety
Remember that, as with any cryptocurrency-related business, using DeFi exchanges involves risk. Make sure you do your research and use solid security practices, such as using strong passwords, turning on two-factor authentication, and keeping control of your private keys.
This tutorial is intended for informational purposes only and should not be considered financial advice. Always do your research and consider consulting a financial advisor before making investment decisions.