DeFi Swap Guide – How to Use DeFi Swap With MetaMask
DeFi Swap is a newly launched decentralized finance platform that enables users from all over the world to maximize their cryptocurrency investments.
Put simply, not only does DeFi Swap allow you to instantly swap one digital currency for another without requiring a centralized provider, but you can also earn an attractive yield on idle tokens.
This is possible through both crypto yield farming and liquidity pool contributions.
The purpose of this guide is to explain how the DeFi Swap platform works, alongside a comprehensive step-by-step walkthrough of how to make the most of its exchange and yield-generating services when using the MetaMask wallet.
- 1 What is DeFi? An Overview of Decentralized Finance
- 2 What is DeFi Coin?
- 3 How to Buy DeFi Coin via MetaMask
- 4 How to Exchange Crypto Tokens on DeFi Swap
- 5 Crypto Yield Farming – An Overview of How Yield Farming Works
- 6 How to Farm Crypto Tokens on DeFi Swap for High APYs
- 7 Liquidity Provider Rewards – An Overview of How to Make Money by Providing Liquidity
- 8 How to Provide Liquidity on DeFi Swap to Earn a Share of Trading Fees
- 9 Commonly Asked Question on DeFi Swap
- 9.1 Converting Tokens on DeFi Swap
- 9.2 Earning via Crypto Yield Farms on DeFi Swap
- 9.3 Earning via Liquidity Pools on DeFi Swap
What is DeFi? An Overview of Decentralized Finance
Decentralized Finance, or DeFi, is an emerging industry that aims to remove centralized third parties from everyday financial services. This includes everything from banking and trading to insurance and foreign exchange.
The overarching concept is that through the use of blockchain and smart contract technologies, people can access their desired financial services in a decentralized manner. This offers readily available solutions to a plethora of real-world problems found in the traditional financial sector.
For example, should you wish to earn interest on capital you have saved, conventional banks from major economies rarely pay an APY (Annual Percentage Yield) of more than 1%.
This has been the case since the 2008 financial crisis, which has been further amplified by ongoing quantitative easing programs initiated by central banks. In comparison, leading platforms like DeFi Swap enable you to earn double or even triple-digit APYs on cryptocurrency deposits.
Another core issue associated with the traditional finance space that DeFi solves is with respect to exchange services. For instance, should you wish to exchange one currency for another – whether that is in the form of fiat or crypto assets, you are required to go through a third party.
This might be a bank, FX broker, or centralized cryptocurrency exchange – depending on the asset you wish to convert. Either way, centralized bodies often charge hefty fees for facilitating exchange services. You also need to trust that your assets are in good hands while the transaction is being executed on your behalf.
This is in stark contrast to how DeFi works, as there is no involvement from third-party intermediaries. Instead, through smart contract agreements, you can instantly swap one digital currency for another at the click of a button, at fees that often average just a very small fraction of a dollar.
The above examples are just two of many. The core takeaway here is that within the next decade, many market commentators argue that a large segment of the traditional financial services sector will be replaced by DeFi.
And therefore, DeFi Swap aims to become the go-to platform for all decentralized finance services for people from all walks of life.
What is DeFi Coin?
At the forefront of the DeFi Swap ecosystem is its native digital currency – DeFi Coin.
DeFi Coin sits at the heart of all transactions that take place on the DeFi Swap platform.
This means that when an investor or trader decides to use DeFi Swap to convert digital currencies or generate an attractive APY via farming or liquidity pool provision, this has a hugely positive impact on the value of DeFi Coin in the open marketplace.
Furthermore, the underlying smart contract that governs DeFi Coin has an innovative taxation policy in place that encourages token owners to HODl in the long term. This stands at 10% of the transaction amount – which subsequently penalizes and discourages short-term market speculators.
The taxation that DeFi Coin collects from buy and sell orders is subsequently invested back into the broader DeFi Swap ecosystem. This is because 50% of the collected tax is distributed to existing DeFi Coin holders. The other 50% is deposited into the DeFi Coin liquidity pool via a smart contract agreement.
How to Buy DeFi Coin via MetaMask
DeFi Coin is available to buy on DeFi Swap – meaning that you can purchase the token in a decentralized manner.
If you are completely new to the concept of purchasing digital currencies without a third-party operator, the sections below will walk you through the process with a MetaMask wallet.
Step 1: Get MetaMask Wallet
In order to access DeFi Swap so that you can buy DeFi Coin, you will need to install a suitable wallet like MetaMask.
Not only can you download MetaMask as a mobile app, but it can also be installed via a Google Chrome, Firefox, Brave, or Edge browser extension.
As a result, this will make the DeFi Coin investment process significantly easier – not least because you can use your laptop or desktop computer.
To get the process started, visit the MetaMask.io website and click on the ‘Download’ button. Then, choose your preferred device option. In our example, we are installing MetaMask to our Google Chrome browser.
Step 2: Set Up MetaMask Wallet
Now that you have installed MetaMask, you will need to set your wallet up. First, you will be asked to choose a strong password. This will be required every time you wish to log into MetaMask from the device that you have the wallet installed on.
Next, you will then be shown your private keys in the form of a backup passphrase. Write the 12 words down in the correct order and keep the sheet of paper somewhere safe.
Take note, if somebody has access to your backup passphrase, they can access your MetaWallet wallet remotely.
Step 3: Connect MetaMask to Binance Smart Chain
The Defi Coin token operates on top of the Binance Smart Chain (BSc). By default, MetaMask does not connect to BSc, so you will need to add the network to your wallet manually.
First, click on the circular icon at the very top-right hand corner of your wallet interface. After clicking on the ‘Setting’s button, select ‘Add Network’.
You will then be asked to type in the specifics of your chosen network, which in this case, is BSc.
Copy and paste the following credentials to add BSc to MetaMask.
Network Name: Smart Chain
New RPC URL: https://bsc-dataseed.binance.org/
Block Explorer URL: https://bscscan.com
After entering the above information, click on the ‘Save’ button. Head back to the main interface of your MetaMask wallet to ensure that you have correctly added the BSc network.
You will know that you have done this correctly if, at the top-right corner of your MetaMask interface, it now displays ‘Smart Chain’ as opposed to ’Ethereum Mainnet’. Furthermore, you will now see that your wallet currency is ‘BNB’ instead of ‘ETH’.
Step 4: Transfer BNB to MetaMask
Now that you have set MetaMask up, you will need to transfer BNB into your wallet. The reason for this is that as DeFi Coin operates on top of the Binance Smart Chain, the token is traded against BNB.
As one of the largest digital currencies in terms of market capitalization, it goes without saying that you can buy BNB from a wide variety of exchanges.
This includes Binance – which supports debit and credit cards – meaning that you can instantly buy BNB at the click of a button.
The general process of buying BNB from an exchange like Binance is as follows:
- Step 1: Open Exchange Account: First, you will need to open an account with Binance or any other exchange of your choosing.
- Step 2: KYC: As you will be using fiat money to buy BNB, you will need to get yourself verified. At Binance, you can do this instantly by uploading a copy of your government-issued ID.
- Step 3: Buy BNB: Finally, if you are looking to buy BNB with your debit/credit card, enter the amount of money that you would like to allocate. Then, enter your card details when prompted and confirm the transaction.
Once you have purchased BNB from an online exchange, you will need to transfer the tokens over to MetaMask. Before you can do this, you will need to copy your unique MetaMask wallet address for BNB.
You will find the ‘Copy to Clipboard’ button beneath ‘Account 1’ at the top of your Metamask wallet interface – click it.
You will then need to paste the wallet address into the relevant field when requesting a BNB withdrawal at your chosen exchange. BSc transactions are super fast – so you should find that the BNB tokens appear in your MetaMask wallet in under 30 seconds.
Step 5: Connect to DeFi Swap
Now that you have BNB in your MetaMask wallet, you are ready to buy DeFi Coin. In order to do this, you will first need to visit the DeFi Swap website.
Then, click on ‘Connect to a Wallet’ from the top-right hand corner of the homepage. You will then need to select ‘MetaMask’. In doing so, a notification from MetaMask on the side of your browser will appear asking you to confirm the connection to DeFi Swap.
Once you confirm the connection, you can then use your MetaMask balance to buy DeFi Coin via DeFi Swap.
Step 6: Buy DeFi Coin
The final step that you are required to take to buy DeFi Coin is to place a swap order. This simply means that you are swapping BNB for DEFC.
In the box next to ‘BNB’, you will need to type in the amount that you wish to swap for DeFi Coin.
The corresponding amount of DEFC tokens will update – based on current market prices. Then, click on the ‘Swap’ button.
You will then be asked to confirm the swap, which you can do by clicking on the relevant button.
In doing so, a MetaMask notification will now pop up asking you to confirm that you wish to use your balance to complete a purchase at DeFi Swap.
That is the DeFi Coin investment process complete. You can now open your MetaMask wallet to view your newly purchased DEFC tokens.
How to Exchange Crypto Tokens on DeFi Swap
One of the most popular features found on the DeFi Swap platform is the ability to convert one crypto token into another without needing to use a third-party operator.
Instead, once you enter your requirements and confirm the swap, the underlying smart contract will complete the exchange on your behalf.
In the sections below, you will find a step-by-step walkthrough of how to exchange crypto tokens on the DeFi Swap platform.
Step 1: Connect Wallet to DeFi Swap
Before you can swap tokens, you will need to connect your wallet to the DeFi Swap platform. As noted earlier, MetaMask is the best option for this purpose.
If you are yet to install MetaMask to your browser, you will find a step-by-step walkthrough of the required process further up in this guide.
Nonetheless, you will first need to click on the ‘Connect Wallet’ button from the top-right hand corner of the DeFi Swap homepage. Then, select ‘MetaMask’.
A pop-up notification from MetaMask will then appear from the side of your browser asking you to confirm the connection with DeFi Swap.
Step 2: Choose Token That You Want to Swap
The next step is to choose the token that you wish to swap. This is the token that you currently hold in your wallet.
By default, BNB will be selected by the DeFi Swap platform.
In order to change this, you simply need to click on ‘BNB’ and type in the name of the digital currency that you wish to use for the swap.
With that said, we are looking to use BNB as our base currency anyway, so we will leave the swap box as it is.
Step 3: Select the Token You Want to Receive
The next step is to choose the token that you wish to receive once the swap is complete. By default, DEFC is selected.
You can choose your preferred token by clicking ‘DEFC’ and typing in the name of the respective token.
Once again, we will leave the swap box as it is, as we are looking to exchange BNB for DEFC nonetheless.
Step 4: Enter Token Swap Quantity
The next step is to specify the number of tokens that you wish to swap.
In this example, we are looking to swap 0.004 worth of BNB – which gets us 10.3082 DEFC. This exchange rate is based on real-time market prices.
You will then need to click on the ‘Swap’ button.
Step 5: Confirm Swap
All that is left for you to do now is confirm the swap. This will give you the opportunity to review your order. If you are confident that you have entered the correct information, click on the ‘Confirm Swap’ button.
When using your MetaMask wallet for the tutorial, a notification will once again appear from the side of your browser. Once you confirm with MetaMask, the tokens will be deducted from your wallet in real-time.
The underlying smart contract will then complete the swap on your behalf – meaning that there is no centralized third-party involved.
You should notice that your newly purchased tokens now appear in your MeatMask wallet.
If not, you can do this manually by clicking on the ‘Import Tokens’ button and pasting the contract address for the token that you have just exchanged on the DeFi Swap platform.
Crypto Yield Farming – An Overview of How Yield Farming Works
This guide previously mentioned that one of the core segments of the traditional financial sector that DeFi will challenge is that of interest-earning accounts.
To reiterate, a recent study found that the average checking account in the US yields an interest rate of just 0.03%.
Savings accounts in the US pay a marginally higher average interest rate of 0.06%. However, even at 0.06%, a $10,000 deposit would yield just $6 over the course of a year.
In comparison, crypto yield farming offers highly attractive interest rates of double or even triple-digit APYs. This will often depend on the digital token that you are looking to earn interest on and the respective platform.
In terms of how crypto yield farming works, this is not too dissimilar to a conventional savings account. This is because the main concept is that you will deposit your idle digital tokens into a yield farming platform and in return – generate a competitive rate of interest.
Yield farming platforms like DeFi Swap are able to facilitate high APYs as the tokens that you deposit are put to good use. More specifically, the tokens will often be lent to borrowers via loans that are secured by crypto.
In other circumstances, tokens deposited into a yield farming plan might be utilized for the provision of exchange liquidity. Either way, crypto yield farming can be viewed as a completely passive way to generate income on your digital asset investments.
Furthermore, you retain ownership of the respective crypto assets, meaning that you will still benefit if the market value of the token increases.
Most importantly, crypto yield farming operates in line with the overarching ethos of decentralized finance and DeFi Swap, insofar that the end-to-end process is free from centralized third parties and intermediaries.
Instead, each and every transaction associated with the crypto yield farming ecosystem is facilitated by smart contracts – which are both transparent and immutable. This means that you can be confident that your funds are well looked after – as there is no human intervention.
How to Farm Crypto Tokens on DeFi Swap for High APYs
If you are looking to maximize your potential crypto gains via a yield farming strategy, the entire process can be completed on the DeFi Swap platform in a matter of minutes.
With that said, if you are completely new to this concept, our guide will now walk you through the crypto yield farming process every step of the way.
Step 1: Connect Wallet to DeFi Swap Platform
The first step is to connect your MetaMask wallet to the DeFi Swap platform.
You can scroll up to review the process of setting up MetaMask if you have yet to complete this step.
Nonetheless, all you need to do is click on the ‘Connect Wallet’ button followed by ‘MetaMask’ before authorizing the connection via the pop-up notification that appears on your screen.
Step 2: Choose Token to Farm
The next step is to choose the crypto token that you are planning to farm. Put otherwise, this is the token that you currently own and that you wish to earn interest on.
In this example, we are selecting DeFi Coin.
Step 3: Select Lock-Up Term
A notable feature offered by the DeFi Swap platform is that you can choose your preferred lock-up period. This refers to the number of days that your tokens will be locked away for and thus – you will be unable to make a withdrawal until this period concludes.
Naturally, the longer that you are happy to lock your tokens away, the higher the APY that you will be able to generate.
DeFi Swap typically offers four core plans – Bronze, Silver, Gold, and Platinum.
To give you an idea of the yields on offer, consider the example below when farming DeFi Coin:
Bronze: 30 Days – 30% APY
Silver: 90 Days – 45% APY
Gold: 180 Days – 60% APY
Platinum: 365 Days – 75% APY
As you can see from the above example, over the course of one year, you can earn an APY of up to 75% when yield farming DEFC on the DeFi Swap platform.
This means that for every 10,000 DEFC tokens deposited, you would generate an additional 7,500 tokens on a 12-month basis. As noted, this financial benefit is in addition to any token value gains that DEFC makes in the open market.
Step 4: Enter Amount and Confirm Chosen Yield Farming Plan
Once you have chosen the lock-up plan that suits your investment goals, you will need to type in the number of tokens that you wish to farm.
In the example below, we are looking to farm 10,000 DEFC tokens.
Then, you will need to click on the ‘Approve’ button. In doing so, a MetaMask pop-up notification will once again appear. This will ask you to confirm the transaction.
When you do, the tokens will be transferred from your MetaMask wallet and into your chosen crypto yield farming plan.
And that’s all it takes when farming crypto on the DeFi Swap platform. There is nothing else for you to do until your chosen lock-up period concludes.
When it does, you will receive your initial tokens deposit back into your MetaMask wallet, alongside the interest that you have earned.
Liquidity Provider Rewards – An Overview of How to Make Money by Providing Liquidity
Another core segment of the DeFi sector that allows you to generate interest on your idle digital assets is liquidity provision.
In its most basic form, you will initially deposit your tokens into a decentralized finance platform like DeFi Swap. Then, then tokens will be allocated to a pool, which in turn, provides liquidity for the DeFi Swap exchange.
This ensures that people can use the DeFi Swap platform to convert digital tokens in a smooth and efficient manner. It also ensures that there are enough tokens available to facilitate your intended swap.
In return for providing liquidity to DeFi Swap, you will be paid a rate of interest. The interest that you earn is paid for via the trading fees that the DeFi Swap exchange collects from buyers and sellers.
Each and every transaction that goes through the DeFi Swap exchange will earn you a 0.25% commission on all trades. This means that as DeFi Swap continues to increase its overall daily trading volume, the amount of interest you earn will also rise.
If you like the sound of earning 0.25% of all trading fees collected by the DeFi Swap exchange, this segment of our guide will explain how to utilize this feature.
Step 1: Connect Wallet to DeFi Swap
Once again, the first step is to connect your MetaMask wallet to the DeFi Swap platform.
You can scroll up for a recap on how to set up and connect your preferred wallet to DeFi Swap.
Step 2: Choose Input Token
The next step is to click on the ‘Add Liquidity’ button.
This will then present you with a box that requires you to specify your input tokens. When providing liquidity, you are doing so for a specific trading pair.
For example, let us suppose that you are providing liquidity for the pair BNB/DEFC. This means that you would need to deposit both of the respective tokens into the DeFi Swap liquidity pool.
You can choose which tokens you wish to add liquidity for by clicking on the relevant button and choosing the crypto asset from the list of supported options.
Step 3: Enter Amount of Token Liquidity
Once you have selected the pair that you wish to provide liquidity for, you will then need to specify the total number of tokens.
In the example below, we are looking to provide liquidity worth 0.004 BNB.
When we type this figure into the relevant box, the underlying DeFi Swap smart contract informs us that this translates into 7.00088 DEFC.
And as such, we would need to cover 0.004 BNB and 7.00088 DEFC.
Step 4: Confirm Liquidity Provision
The final step required to start earning your share of trading fees collected by the DeFi Swap platform is to confirm the transaction.
In our example, this would require us to click on the ‘Approve DEFC’ button. The button will, however, display the respective base token that you are looking to provide liquidity for.
Finally, when using MetaMask, a notification will populate asking you to confirm the transaction with DeFi Swap.
Once you do, you will be entitled to 0.25% of any trading fees collected when buyers and sellers trade the respective pair on the DeFi Swap platform.
Commonly Asked Question on DeFi Swap
The most common questions and queries that we receive from new and existing users of the DeFi Swap platform can be found below.
Converting Tokens on DeFi Swap
What tokens does DeFi Swap support?
DeFi Swap currently supports tokens listed on the Binance Smart Chain. This means that in order to benefit from the best market price and fees possible, you should use BNB as your base currency when using the Defi Swap platform.
How do I pay transaction fees?
Transaction fees – which are determined by the underlying DeFi Swap platform, are paid in BNB. Once again, this is because DeFi Swap operates in conjunction with the Binance Smart Chain.
What wallets does DeFi Swap support?
The vast majority of users will connect their MetaMask wallet to the Defi Swap platform. This is because MetaMask not only comes in the form of a mobile app but a browser extension too.
As such, this makes the process of using DeFi Swap easier, as you can complete transactions on a laptop device.
With that being said, DeFi Swap also supports WalletConnect. This means that you can use any wallet of your choosing – as long as it can connect to the Binance Smart Chain. This includes Trust Wallet – which is also a popular option to trade BSc tokens.
Do I need to register an account to use DeFi Swap?
DeFi Swap is a decentralized exchange that is not bound or connected with any centralized third parties. This ethos sits at the core of the decentralized finance space.
And as such, you can use DeFi Swap services without needing to create an account. This also means that you are not required to provide any personal information or verification documents.
Earning via Crypto Yield Farms on DeFi Swap
What tokens can I farm on DeFi Swap?
DeFi Swap supports a wide variety of tokens that operate on the Binance Smart Chain. More tokens are being added frequently to meet user demand.
What yields can I earn when crypto farming on DeFi Swap?
Yields on DeFi Swap will vary depending on a variety of core variables. First, this will depend on the token that you wish to farm. Naturally, larger cap tokens that are prone to lower levels of volatility will often yield a lower APR. Similarly, newly launched tokens with a small market capitalization and low levels of liquidity will attract much higher APYs.
The next thing to consider is the length of time that you are happy to lock your tokens away. DeFi Swap utilizes four tiers – Bronze (30 days), Silver (90 days), Gold (180 days), and Platinum (365 days).
Ultimately, the longer that you lock your tokens away, the higher the APY you will generate.
Can I withdraw tokens once they are locked in a yield farming pool DeFi Swap?
On the one hand, crypto yield farming allows you to earn an attractive rate of interest in a passive manner. However, the key thing to remember is that once your tokens are locked in a pool, you won’t be able to withdraw the funds until the term concludes.
And as such, you should only choose a lock-up plan that is suitable for your financial profile. If you believe that you might need the tokens to cover short-term expenses, then crypto yield farming might not be for you.
Earning via Liquidity Pools on DeFi Swap
Why do I need to deposit two different tokens when providing liquidity?
Irrespective of the cryptocurrency that you are interested in buying or the exchange you are looking to use for this purpose, you will always access your desired market via a pair.
For example, if you wanted to buy Bitcoin with US dollars, you would be trading BTC/USD. Similarly, if you wanted to exchange BNB for GALA, you would be trading BNB/GALA.
And therefore, in order for there to be suitable liquidity levels to offer users a smooth and efficient trading market, there would need to be sufficient quantities of both tokens contained within the pair on DeFi Swap.
What is impairment loss?
One of the biggest risks that you need to consider when providing tokens for a liquidity pool is that of impairment loss.
In its most basic form, this refers to a loss that will occur if there is an unfavorable difference between the market value of the respective tokens if they were held in a private wallet compared to that of the liquidity pool you are supporting.
After all, when you provide liquidity for a pool, you need to take into account the value of both tokens at the time of the deposit against that of its current market price.
On the one hand, you will earn a share of collected trading fees when providing liquidity on the DeFi Swap platform. In an ideal world, the commissions that you earn will outweigh any impairment loss encountered.
However, this isn’t always the case. That is to say, there is every chance that your impairment loss will equate to a greater amount than any trading fees collected. If this happens and you withdraw your tokens out of the liquidity pool, you will likely be doing so at a loss.