Category: Metamask

MetaMask Tutorial: The Ultimate Beginners How-to Guide
MetaMask is a secure crypto wallet to store and manage your Ethereum (ETH) and other ERC-20 tokens. It is also a gateway to other decentralized applications. This is beneficial for people who frequently use ETH and its tokens as it provides a secure and fast way to access their funds. This guide is a MetaMask tutorial for complete beginners. We will learn how to:
1. Set up a MetaMask account.
2. Deposit to MetaMask.
3. Send funds from MetaMask.
4. Change and add networks in MetaMask.
5. Use MyEtherWallet with MetaMask.
6. Fiat on-ramps: Buy Crypto Using Debit or Credit Cards.
7. Withdraw money or cryptocurrencies from MetaMask.
8. Collect airdrops using MetaMask.
9. Cash out your crypto to fiat using MetaMask.
You can also follow me as I walk through the steps in my video:

MetaMask Tutorial Guide

What’s more, there are rumors that MetaMask might also do a $MASK airdrop! Learn how to get some of that potential airdrop with our MetaMask ($MASK) Token Airdrop Guide!

How to set up a MetaMask account

Here’s how to set up a MetaMask account:
1. Download and install MetaMask.
2. Create a new wallet.
Download and install Metamask extension

Download MetaMask. MetaMask has extensions for Chrome, Firefox, Opera and Brave browsers. At the extension store on these browsers, search for MetaMask and click “Add to” browser.

Example: For Chrome users, click “Add to Chrome” and then “Add extension” when the popup window appears.

Once installed, the MetaMask icon will appear on the top right-hand corner.

The fox logo will appear on your browser once the extension is successfully installed

Create a new wallet

Click the “Get Started” button on the webpage and choose the option to make a new wallet. Afterward, you will be asked to come up with a password for your account. It is best to make a strong password that other people can’t easily guess, like your birthday. This means that your password should have numbers and letters arranged in a unique way.

Select the option to set up a new wallet

Back up your wallet with the special 12-word code. It is best to write this code down on a piece of paper and store it in a secure place. Do not let hackers access the code by saving it on your computer. Instead, to keep your money safe, write the code on paper instaMask account address, click on the extension and then copy the address at the top. You can also click “…” and “Account details” to get your full deposit address and a QR code. Make sure you’re on the same network on MetaMask as the wallet or exchange you’re sending tokens from. To deposit tokens, either copy the address onto the “send” address on the wallet or exchange you’re sending from, or scan the QR code.

To check if you have received tokens, open the MetaMask window and look for the token you added. If it is there, you can see your balance. If it is not there, you need to manually import the token contract. To do this, go to CoinGecko or CoinMarketCap, find the token you want, click on “Contract” and the MetaMask logo. On the MetaMask window, click “Add token”. Once the token is added, you can see your balance in the MetaMask wallet. Change “The balance was seen in the MetaMask wallet” to “You can see your balance in the MetaMask wallet.”

How to send crypto from MetaMask?

You can send cryptocurrencies in your MetaMask to other wallets, and exchanges, or make purchases. Click on the extension and “Send” on the pop up window.

Click “Send” on the pop-up window.

Once you have filled in the address of the person you are sending the cryptocurrency to, the type of cryptocurrency (e.g. ETH) and the amount, double-check that the address, type and network are all the same. Confirm the amount to be sent, the gas fee and the total amount including the fee, then click “Next”. When the cryptocurrency has been sent, you will get a notification saying “Confirmed Transaction” on your web browser.

Fill in the details and click “Send”, then “Confirm”

Change and add networks in MetaMask

Ensure the correct network is selected on both the sending and receiving wallets to ensure funds are sent. To do this, click on the top bar of your wallet and select the network you want to use. This could be Ethereum, or Layer 2 blockchains such as Optimism, Arbitrum, or Polygon. Once you have chosen the right network, you can safely send and receive tokens.

Select network on MetaMask

For some newer or testnet networks, you may have to add them to MetaMask manually. To do this, click “Add network”, search for the network, and click “Add”.

Search and add network to MetaMask

If you can’t find your network, you can add it manually. Get the details from the project’s documentation and fill them in.

Learn more about Ethereum Layer 2 networks such as Arbitrum, Optimism, Polygon and Ethereum 2.0 here.

Adding a network using Chainlist

Here’s how to add a network to your MetaMask using Chainlist :
1. Connect your MetaMask to Chainlist.
2. Find the network you want to add and click “Add Chain”.
3. On MetaMask, click “Approve”, then “Switch network”.
How to use MyEtherWallet with MetaMask?

MyEtherWallet is a free program that helps people make wallets and use smart contracts. On their website, click “Access my wallet” and “Browser extension”. On MetaMask, pick your wallet, then press “Next” and “Connect”. You’ll then be able to see the MyEtherWallet dashboard. Here, you can check your portfolio, manage your NFTs, send and receive cryptocurrency, and sign messages.

MetaMask Fiat On-Ramps: Buy Crypto Using Debit or Credit Cards!

MetaMask makes it easy to buy cryptocurrencies without ever leaving the app. It works with Coinbase Pay, Transak and MoonPay, so you can use your credit card or Google Pay to purchase different types of digital coins. Depending on the company, you’ll be able to buy a variety of cryptocurrencies. Here’s how to do it:
1. On MetaMask, click “buy” and choose which company you wish to buy from.
2. On the page, select how much crypto you want to buy, the payment method, and the type of cryptocurrency. Then click “Buy now”.
How to withdraw money or cryptocurrencies from MetaMask

To take out your money or digital currencies from MetaMask, you must first transfer them to an exchange that can turn them into fiat currency. To do this, look at our list of the Top Cryptocurrency Exchanges 2023. This will help you find a platform that can convert your crypto into the currency you need.
1. Have a cryptocurrency exchange account set up. For recommendations, check out our Top Cryptocurrency Exchanges 2023.
2. To send your cryptocurrency from MetaMask to a crypto exchange, it’s best to first convert your cryptocurrencies into one of the more popular coins, like Bitcoin or Ethereum. This makes it simpler to send all your coins in one go, and also because these two coins are accepted by most exchanges.
3. On the exchange, sell your cryptocurrency for fiat currency.
4. Withdraw your fiat currencies (USD) to your bank account.
How to collect airdrops using MetaMask?

Airdrops are a great way for people to get free tokens, which is like getting FREE MONEY. To get the tokens, you will need to do certain tasks. After that, you will need to connect your MetaMask wallet to collect and sell the tokens. Here’s how to collect airdrops using MetaMask:
1. Go to the airdrop site.
2. Depending on the project, you may need to change your network. To do this, click on the top bar on MetaMask and select your network.
3. Connect your MetaMask to the site. The button is usually at the top right-hand corner.
4. Choose which wallet you want to connect to the site.
5. Click the claim button on the website.
6. Confirm the transaction on MetaMask and pay any gas fees.
7. After you are done, disconnect from the airdrop site by clicking on the three dots on MetaMask. Then “Connected Sites” and disconnect.
Don’t know where to get airdrops? Check out Upcoming Crypto Airdrops.

Cash out your crypto to fiat using MetaMask

MetaMask has launched it’s long-awaited Sell feature, allowing users to finally cash out their crypto to fiat on MetaMask. Currently, MetaMask allows you to cash out your crypto to fiat currencies such as USD, EUR and GBP. Your converted currencies can also be directly deposited to your bank account or PayPal. Note however that MetaMask’s Sell feature is only available in some states in the US, UK, and parts of Europe. Also for the time being, MetaMask Sell only supports ETH on Ethereum Mainnet. However, more layer 2 networks will be supported soon.
Here’s how to sell or cash out crypto to fiat using MetaMask
1. Connect your wallet
  Go to. https://portfolio.metamask.io/ and connect your wallet.
2. Go to Sell page
  Click on “Sell” on the left hand menu bar.
3. Select region
  Select your region. Note that MetaMask Sell is only available in some states in the US, UK, and parts of Europe.
4. Select token and network
  Select the token and network you want to sell from. For example, ETH on the Ethereum Mainnet network.
5. Select destination account
  Select where you want your cashed out fiat to be deposited (e.g. bank account or PayPal balance).
6. Enter sell amount
  Enter the amount of crypto you want to sell. Note MetaMask Sell currently only supports ETH.
7. Select quotation
  MetaMask will provide a range of quotations from different providers. Select your preferred quote to continue.
8. Link fiat account
  You will then be redirected to your selected provider’s website to sign up and link your fiat account. Afterwards, you will be directed back to MetaMask Portfolio.
9. Send crypto and confirm transaction
  Click “Send ETH to [Provider]” to send your crypto from your wallet to your fiat account. Then, confirm the transaction.
10. Track your transaction
  Go to the “Sell” tab to track your transaction. Please note that transaction speeds may vary and your fiat currencies may take a few days before it appears in your bank account or Paypal balance.
MetaMask tips, tricks, and hacks for ADVANCED users

Congratulations on setting up your account! Now you are ready for ADVANCED tips and tricks such as:
1. How to reduce transaction fees;
2. how to cancel incorrect transactions;
3. how to use your Ledger cryptocurrency hardware wallet with MetaMask;
4. how to save your frequently used contacts (addresses) to MetaMask;
5. how to speed up stuck transactions….and more!
Check out our video which will walk you through the process step by step:

Advanced MetaMask tips and tricks you MUST know

Frequently Asked Questions (FAQs)

Is MetaMask good for beginners?

MetaMask is absolutely suitable for beginners, if not essential for every cryptocurrency trader. MetaMask also has a clean and straightforward interface. The fact that it is an extension of your browser also makes it very easy to use.

Is MetaMask safe?

MetaMask has not suffered any major hacks. However, there are ongoing phishing attacks by outside parties against MetaMask users.

Halborn, a cybersecurity firm, discovered a case in June 2022 where a compromised computer had unencrypted private keys on its disk. MetaMask has since fixed this vulnerability in its extension versions 10.11.3 and later.

What are some MetaMask scams?

Halborn, a cybersecurity company, has cautioned MetaMask users about active phishing scams. These scammers send emails with the MetaMask header and logo, asking people to verify their wallets by following KYC regulations. If the recipient clicks on the call to action button, they are taken to a fake website. This website then requests the user to enter their seed phrases, which the scammers can use to steal their crypto funds.

These MetaMask scam emails can usually be identified by spelling mistakes in the email e.g. “metamaks.auction”. Another red flag in the email is that it is not personalised.

When should I use MetaMask or cryptocurrency hardware wallets such as Ledger Nano S, Ledger Nano X or Trezor?

For everyday transactions, MetaMask is a great choice. However, for larger amounts of money, it is best to use a hardware wallet. The Ledger Nano S, Ledger Nano X and Trezor are all secure options.

How do I fix stuck transactions on MetaMask?

MetaMask can have transactions stuck when too many people are trying to process them on the network. To fix this, you can speed up the transaction. To do this, click “speed up” on MetaMask, then select the options available. Choose “Fast” and click “save”. This will create a new transaction with higher gas fees, but it will make the transaction go through faster.

How do I buy Ethereum (ETH) on MetaMask

Buying Ethereum on MetaMask is easy. MetaMask has partnered with Coinbase Pay, Transak, or MoonPay (depending on the country) to make it simple. All you have to do is click “Buy” on MetaMask, then pick which company you want to buy ETH from. You can compare each company’s rates and payment methods to decide which one you like best. After that, in the pop-up window, select the amount you want to buy and your payment method, then click “Buy Now”

How to cancel transactions on MetaMask?

To undo a transaction on MetaMask, press the “Cancel” button on the MetaMask window. If you chose a lower fee option, it will take longer for the transaction to go through, but it will also give you more time to cancel it

How to use MetaMask on mobile?

MetaMask is available for both iOS and Android mobile devices. And can be downloaded on the Google Play Store or the Apple App Store.

How to connect MetaMask to website?

MetaMask is available as a web browser extension for Chrome, Firefox, Brave, Edge and Opera. You can download the extension on their website and install it.

How to use MetaMask on Andriod?

You can download MetaMask for Android from the Google Play Store.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
September 6, 2023
Will the Launch of Ethereum 2.0 Crash Crypto Prices?
Ethereum 2.0 is coming soon and the question everyone wants to know is “will it cause crypto prices to crash?” This is particularly as markets around the globe are not looking great, and that includes the crypto industry. Everything has been bleeding heavily for months without a sign of stopping, as central banks keep hiking rates, global supply chains struggle, and spending and investment dry up. Stagflation is a very real possibility, and there is no telling how long it will take for us to cool down the overheated markets that have been going only up since the last recession more than ten years ago.

The aforementioned notwithstanding, active development in the blockchain space continues to march forward. Although investments might drop significantly, many builders keep on building no matter the state of the markets. As Ethereum is steadily approaching the long-awaited transition from proof-of-work (PoW) to proof-of-stake (PoS), dubbed The Merge, it might be interesting to think about potential impacts of The Merge on the crypto market prices, especially in the context of a potential extended bear market.

Learn more:

Ethereum 2.0 is coming- Here’s what you NEED to know

Proof of Stake (PoS) explained

Ethereum ($ETH) Merge: What is it and everything you need to know

Plus check out our video!
Table of Contents

Toggle
About Ethereum 2.0

The Potential Impacts of The Merge

1. Ethereum Sucks Liquidity From Other PoS alt-L1’s

2. Beacon Chain ETH Unlocks in Extended Bear Market Cause Mass Capitulation

Conclusion
About Ethereum 2.0

In short, The Merge will result in Eth2.0’s Beacon chain (the coordination mechanism of the new network) merging with the current Ethereum mainnet, signifying the move to a fully PoS chain. To secure the network, enormous amounts of ETH will be staked in addition to the ETH already staked in the Beacon chain, making all of this locked ETH illiquid. Combined with the EIP-1559 upgrade, which now burns 70-80% of the fees, The Merge is expected to cause the equivalent of 3 bitcoin halvenings, dropping Ethereum’s inflation rate to 0.43% and locking up a lot of ETH, potentially reducing sell pressure by up to 90%. In addition, the PoS mechanism will reduce Ethereum’s energy consumption by up to 99.95%.

So all is looking great for Ethereum and projects building on top of it, right? Possibly. However, there is still a decent chance that, given the current market conditions, ETH’s price pump might be short-lived, and would continue to drop, bringing down a lot of other projects with it.

The Potential Impacts of The Merge

There are two possible scenarios to look at when discussing the downside impact of The Merge on crypto prices:
1. The external effect would be caused by Ethereum sucking out liquidity from other PoS alt-L1s and the projects built on top of them (especially if they’re EVM-compatible), as one of the more critical selling points compared to Ethereum is environmental sustainability.
2. Beacon chain staked ETH unlocks, extended bear market, and poor treasury management of Ethereum-backed projects could see more capitulation events as HODLers and projects sell off their ETH to stay afloat as new investments dry up and stagflation looms.
1. Ethereum Sucks Liquidity From Other PoS alt-L1’s

By offering lower gas fees, fast transactions, and relatively high throughput at the expense of decentralization and economic sustainability, many PoS chains have attracted developers, investors, and NFT ecosystems to their networks away from Ethereum. Ethereum’s high demand (=high fees), poor L1 scalability, and the concerning PoW mechanism have severely limited its growth. (https://rpdrlatino.com) Understandably, regular people simply do not want to pay exorbitant fees when minting and trading NFTs, and developing inaccessible dApps on a network that is supposedly destroying trees and warming up the planet.

The environmental argument will be completely invalid after the merge. Coupled with the enormous innovations in Ethereum’s L2 ecosystem, which have already reduced transaction fees to sub-$1 with no signs of stopping, Ethereum is set to once again become the most sought-after smart contract development platform. As post-Merge buy pressure of ETH increases and scalability improves, alt-L1’s could struggle to offer any significant unique selling points, making new projects opt to build on top of the most secure, established and decentralized smart contract chain out there.

As more and more people flock to Ethereum, established projects might also decide to migrate to the platform with the most demand and upside potential, effectively sucking out liquidity from other chains, and leaving them dry with evaporated treasuries, limited runway, and reduced demand. The strategy of subsidizing transaction fees during a bull market when funds are plentiful will likely not work when no new investments are coming in during a bear market, and an exodus of users is reducing demand and network revenues.

Of course, there is plenty of room for growth in this space, and projects existing on other chains might not find it too beneficial to move to Ethereum even though short-term liquidity issues might prove challenging.

2. Beacon Chain ETH Unlocks in Extended Bear Market Cause Mass Capitulation

The Merge will unlock a lot of ETH, resulting in a potential aggressive selling spree that might have trickle-down effects on a lot of other coins, especially those that have tight correlation with their ETH pair, are ERC-20 tokens, or have been sitting on ETH treasuries to fund their development. A lot more downside risk due to a selloff is also a very real possibility for ETH and other coins simply due to bad timing (i.e. bear market – with recession slowly creeping into our daily lives due to central banks raising interest rates, supply chain issues, energy crises etc.), the unlocked ETH might serve as a critical lifeline for those who had confidently staked their ETH during the bull market.

During the bear market, investments will be scarce, and projects that during the bull market had made the decision to not convert their treasury ETH to stablecoins are now seeing their wallets drop in value significantly, forcing them to capitulate by selling at low prices to cover their expenses.

However, it is important to note that the ETH unlocked from the ETH staked on the Beacon chain will not be immediately available right after The Merge. Rather, this feature – EIP-4895: “Beacon chain push withdrawals as operations”, will be enabled during the Shanghai upgrade. It will probably be deployed much later after The Merge, with estimates ranging from a month to 6 months. This means that any amount of potential sell-off of unlocked ETH would come with a significant delay post-Merge, at which point it’s impossible to predict where the market might be in 6-12 months and how it will behave, with contradicting bullish and bearish narratives clashing against one another in an attempt to drive price in either direction.

This option does seem a bit far-fetched, however, and no one knows how much more pain we will have to suffer before the momentum shifts towards the upside, so it’s best to be prepared for both the upside and downside, and not fall prey to only bullish narratives.

Conclusion

As outlined in the two main points, post-Merge many alt-L1 coins could face a risk of crashing even further due to risks associated with reduced liquidity in a bear market (for non-Ethereum coins), liquidity that might flow towards the Ethereum ecosystem due to its established security, track record, and newly acquired environmental sustainability.

On the other hand, ETH and other ERC-20 tokens living on Ethereum also run a risk of crashing, if the post-Merge ETH unlock from the Beacon chain results in a mass sell-off of ETH, which could crash other coins and project treasuries.

As this will be the first time the crypto industry experiences a recession or a stagflation, there is a lot of uncertainty about how low the market could go and, most importantly, how long it could stay so low. This is uncharted territory, so making comparisons with past cycles might not be particularly useful. Nations and companies will keep tightening their belts, and spending will significantly decrease across the board, leaving risk-on markets such as crypto vulnerable to a continued mass exodus to safer investments.
July 4, 2022
Binance Smart Chain: First look
Binance Smart Chain (BSC) was created by the team behind Binance exchange, arguably the world’s most popular cryptocurrency exchange platforms founded in 2017 by Changpeng Zhao (CZ). BSC is a dual-chain architecture that encourages users to utilize one blockchain for building digital assets and decentralized apps in order to trade faster. This architecture will run alongside the existing Binance Chain (BC), a decentralized digital asset exchange, whilst providing a fast and secure system that enables smart contracts. This article will explore some of the exciting features of BSC and give users some insight into their security and reward system. For more detailed information we suggest taking a look at the whitepaper.

You can launch your own Binance smart chain validator for free on ANKR

Features of Binance Smart Chain

Ethereum Virtual Machine (EVM) Compatibility

As users may know, Ethereum is one of the most practical and popular Smart Contract platforms. Hence, BSC has enabled compatibility with multiple Ethereum tools and nodes to be used in this dual-chain architecture (e.g ecosystem components and dApps)

Cross-Chain Communication

Communication between BC and BSC will be supported in order for users to move digital assets (i.e BEP2 tokens), as well as any other BEP tokens in the future. This is further optimized for scaling dApps that run best with an efficient user experience.

Integration with Chainlink’s Oracle solution for building DeFi apps

Binance Smart Chain integrates Chainlink’s ($LINK) oracle solution. This means that developers on Binance Smart Chain no longer need to dedicate months of engineering time in order to set up their own oracle infrastructure, they can directly build smart contract applications that can connect to real-world data feeds from Chainlink. In turn, developers can build powerful Decentralised Finance (DeFi) applications which utilise Chainlink oracles to retrieve data from data aggregators or price information directly from Binance DEX or Binance exchange. According to Binance, this will bring more robust security and reliability to price feeds on DeFi apps, which in turn gives users more confidence in financial products which are built on Binance Smart Chain.

Independent Blockchain

BSC does not include a layer 2 solution, making it a standalone system. In the event that BC experiences a technical failure, most of BSC’s functions are self-contained, hence they should be able to continue operating despite such occurrences.

Staking-based Consensus and Administration

To promote the environment and increased network performance, BSC utilizes a staking-based consensus, additionally allowing for flexible options that the community can administrate.

Short Block Time

One of the highlights listed on the website includes a block time of approximately five seconds, ensuring efficient trading for users.

Binance Smart Chain vs Binance Chain: Differences?

Binance Smart Chain came about because Binance Chain was introduced as a single purpose high-performance DEX. It is on-chain order matching and intended to be very fast. It is able to handle around 100 thousand orders per second with 1-second confirmation. But for Binance Chain to achieve this level of performance, they had to sacrifice something, and that was the smart contract capabilities. However, it was a highly popular feature with users so Binance Smart Chain was released as a parallel chain which supports Ethereum compatible smart contracts, so it supports solidity and is EVM compatible.

Therefore, a key feature of Binance Smart Chain is that it is compatible with Ethereum-based smart contracts. So, if you have a DeFi contract that runs on Ethereum, you can port it over to Binance Smart Chain and it will run there too. It is meant to be an easy way for users to deploy smart contracts on Binance Chain without any additional learning curve. It will also be fully open-sourced so anyone can deploy contracts on the platform. Finally, in terms of performance, Binance Smart Chain is lower performance than Binance Chain, but it should still be higher than Ethereum 1.0.

Learn more about Ethereum, and the upcoming Ethereum 2.0 here.

Rewards and benefits of using Binance Smart Chain

The major reward implemented for users are transaction gas fees paid in Binance Token ($BNB) (Binance’s native coin), and individuals can also be rewarded for Cross-Chain communication. BNB is the token used to stake for this dual-chain architecture, and allows the prevention of inflation since it is not an inflationary token. Although this token may not be as popular as Bitcoin or Ethereum, it has many uses so validators can still enjoy its benefits.

Proof of Staked Authority (PoSA)

BSC makes use of a system of 21 validators through PoSA, which allows lower fees and shorter block times. PoSA is a blockchain method that allows fast deliveries and fast transactions, making it a valuable algorithm to increase positive user experience. As mentioned in the white paper, BSC will be utilizing a combination of Deputy Proof of Stake (DPoS) and Proof-of-Authority (PoA). This means it will allow community governance, only a limited amount of validators will produce blocks, and it will follow a system similar to Ethereum’s Clique consensus engine whereby validators act through a PoA protocol to produce blocks. Combining these will likely improve the efficiency, security, user transparency and satisfaction of the smart chain.

Security: How does Binance Smart Chain protect users?

Although PoA systems usually ensure the security of users, there are still risks of Byzantine validators that may breach the network through methods such as a “Clone Attack”. Binance conducts measures to prevent such attacks by encouraging users to wait for blocks to seal after a certain amount of time in order to guarantee secure finality. BSC additionally implements Slashing logic, which is used to punish Byzantine Validators for instability or double signing. This will decrease the chances of “Clone Attacks” and expose malicious validators very quickly.

Instability

Refers to validators who miss their turn to produce blocks, which consequently damages the performance of the BSC network. This can occur when individuals have problems such as configuration or hardware related issues. If a certain number of missed terms are recorded, there are risks of validators being able to vote users out so they receive less or no rewards.

Double Signing

Refers to the malicious signing of more than one block that includes the same height and parent block. BSC already has its ways to prevent this so only a deliberate attack allows this to occur.

Status of Binance Smart Chain

The staking mechanism and mainnet for Binance Smart Chain should be launched end of August or early September 2020. Currently, Binance Smart Chain is in testnet phase.

Conclusion

Overall, this dual-chain architecture is enticing for those who want to experience fast trading while building their decentralized apps on one platform and we are definitely excited and anticipating their mainnet launch. Currently, you can go onto the Binance Chain testnet and test it out, as well as request free testnet tokens. Based on the functions of BSC, we highly recommend experienced traders and programmers to give Binance’s new feature a try. For those who are new to Binance, it is also worthwhile to test and try out the platform in anticipation for the full launch.

Decentralised Finance (DeFi) series: tutorials, guides and more

With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

Tutorials and guides for the ESSENTIAL DEFI TOOLS:
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
August 21, 2020
Balancer Finance Guide and Review ($BAL)
Balancer ($BAL) is an automatic market maker (AMM) protocol that reduces the cost and slippage between trades of different cryptocurrencies. Balancer is a decentralized replacement for the traditional market-maker, a 3rd party entity that provides liquidity to traded assets. Balancer protocol can be called upon by different decentralized trading platforms to automatically figure out the best rates and trading prices using Smart Order Routing (SOR). The protocol also provides the funds necessary to complete the trade, using the funds from available Balancer Pools. Balancer Finance was Launched in September 2019 by Mike McDonald and Fernando Martinelli, since then the Company had a successful seed round with $3 million invested.

Balancer Exchange Interface

Balancer uses the N-dimensional invariant surface that is built upon the Uniswap dapp. They also use Automated Market Makers (AMMs), much like UniSwap, which are built off computer algorithms to regulate the market. Their Pools are doing away with portfolio management fees with users instead of collecting fees from traders, who re-balance the portfolio by “following arbitrage opportunities”.

Balancer has shifted itself into a prominent position within the Decentralized Finance (DeFi) hierarchy, as it’s BAL token caught the coattails of Compound Protocol’s governance tokens rise at the start of 2020. This saw increased attention on the exchange and has been earmarked as a competitor in the DeFi field. This perception coincides with an increase in popularity for DeFi projects and their mining qualities, something highlighted in a recent Forbes report on “DeFi Yield Famers”. So, if you are a budding or curious yielder or someone looking to understand the emerging DeFi market, this is the guide for you. In this article we provide a full breakdown of the project, what it is and explain the benefits of using this DeFi exchange and protocol.

To learn more about Balancer including its strengths and weakness, check out our video:

Balancer Finance: What you MUST know about this DeFi platform

Balancer’s Pools Explained: What are they?

Balancer pools are collections of user supplied funds that are used to provide liquidity to trades and transactions. These pools can total up to more than $11 Million USD (eg, the USDT, BAT and COMP pool). This collection of funds will be called upon during cryptocurrency trades as the as the counter-party to the transaction, thus providing liquidity to traders.

Controlled/Private Pools: These are when a fixed state is over the pool and the creator can set out the tokens and weights. This is usually done for private actors who don’t want outside liquidators, for example third party liquidators working with large quantities.

Finalize/Shared Pools: These pools are open for all actors to add liquidity and is a one way transition. They can not be amended and have a fixed parameter, unlike controlled pools and are usually for the general public to liquidate and make profits.

Alongside the two main subcategories of pools, there are other more specific smart pools that you can use. For example, Liquidity Bootstrapping Pools (LBPs) give the opportunity for teams to release a project token while at the same time building deep liquidity. Other examples include stablecoin pools with zero impermanent-loss, which founder Martinelli wrote an extended explainer here.

Balancer’s Pool creator tool

$BAL Token

In its initial launch, Balancer didn’t have their own native token but this changed this year, with the company revealing their governance token $BAL. The Company began distributing the token on June 23rd 2020 and will be distributed on a weekly basis for liquidity providers on the site.

However, there is no economic value to BAL tokens, rather they are currency for governance rights on the protocol. These rights allow the holders to have a say on the structure of Balancer protocol, with weight in terms of implementing new features, protocol fees, and larger structural changes like layer 2 scaling as well as contracts on other blockchains.

There are 100 million tokens created but 25 million of them have already been allocated to the founding members, core developers, advisers, and investors. The rest though are free to be mined by Balancer users who add liquidity.

According to Balancer’s website: “Every week 145,000 BALs, or approximately 7.5M per year, are distributed to liquidity providers. This means in the first year of BAL’s existence there would be 30% supply inflation off the initially allocated supply of 25M tokens.” So, how can you earn the weekly BAL allocation? This is done through BAL liquidity mining, which is discussed below.

BAL Liquidity Mining: How to earn $BAL tokens?

Liquidity mining has become one of the most popular topics of conversation in the space of decentralized finance (DeFi) in recent weeks. At its core, liquidity mining is essentially when users supply liquidity of assets to a DeFi protocol in exchange for some kind of reward. That reward may be various tokens, including governance tokens of the underlying DeFi protocol (which may end up having monetary value – like COMP). It basically offers a way for users to earn money on assets that they hold.

The main way to earn $BAL tokens is through Liquidity Mining. Essentially, Balancer rewards liquidators who pay into their pools in the form of $BAL tokens. The Company’s proposal is to give out BAL tokens in proportion to the amount of liquidity each address contributes relative to the total liquidity on Balancer.

Another way to make BAL is through creating a pool and reaping the benefits of trading fees. These are handed out in the form of $BAL. This system also incentivises the pool creator to lower fees as the lower the fees are, the more BAL they receive. Balancer’s fee gives pool creators a short term or a long term option, and they hope it will encourage lower fees so that traders are lured onto the exchange.

Speaking on the issues concerning distribution of BAL and governance rights, founder Martinelli said: “By far the most important factor or reason why we are doing that is because we want this thing to be decentralized. We believe in a decentralized, trustless future, and we want Balancer to do that. We need the distribution to be in a healthy way.”

Balancer Yield Farming & Best Pools

Top liquidity pools on Balancer are currently returning up to 30% APR on Return on Liquidity. These rates have drastically improved after the Cap Factor update on July 5th 2020.
- sETH 50% WETH 50% | $7,000,000 USD Liquidity
- sUSD 50% USDC 50% | $7,400,000 $7,000,000 USD Liquidity
- USDC 50% mUSD 50% | $18,878,747 USD Liquidity
- MKR 60% WETH 40% | $13,219,311 USD Liquidty
The best way to find the current best rates and return on liquidity is via the Predictions Exchange Chart.

Balance Coin Whitelisting

In order to quality for airdrops of $BAL Balancer Governance token, pools need to have at least two coins that are on the whitelist. Coins are added to the balancer whitelist on a weekly basis. The amount of $BAL being distributed depends on the trade volume and total liquidity, with a maximum of $

Trading on Balancer’s Exchange

Alongside their liquidity and pools, Balancer is first and foremost a decentralized exchange. With no KYC or signups, the anonymity and privacy is upheld. All you need to start trading on there is a wallet like MetaMask. Learn how to set up a Metamask account here.

The Exchange has a number of tokens available to trade. These include: Ethereum (ETH), DAI, MKR, USDC, REP, BTC++, WBTC, WETH, BAT, SNX, ZRX, LINK, DZAR, UMA, LRC, REN, LEND, KNC, COMP, OCEAN. The Exchange also has a number of tokens without pools such as tBTC, ANT, cUSDC, cDAI, imBTC, pBTC, sBTC, sUSD, PNK, AST and RPL.

Balancer: are there any risks?

Decentralized exchanges are often associated with high risks. This sort of ability to trade so easily with high interest rates is a concern. This was highlighted more recently by Ethereum founder, Vitalik Buterin, who cautioned that they were “flashy DeFi things” which sometimes come with “unstated risks attached”.

Honestly I think we emphasize flashy defi things that give you fancy high interest rates way too much. Interest rates significantly higher than what you can get in traditional finance are inherently either temporary arbitrage opportunities or come with unstated risks attached.
— vitalik.eth (@VitalikButerin) June 20, 2020

Tweet from Vitalik Buterin

Balancer has acknowledged the risks, with their website warning users that: “Balancer is a very new protocol. Although we are taking every precaution and doing extensive audits, this is still very much a beta product. Use small amounts of funds to start.”

Conclusion

Overall, Balancer has position itself as a powerful tool to automate marketing making and reduce transaction fees for different cryptocurrencies. It’s leading the liquidity pool market with the ability to create n-dimensional liquidity pools which is a market first. With their unique formula which negates and actively discourages large fees, Balancer has created a decentralized project that could potentially be a self-sufficient system with a community emphasis.

For now though, the main target for Balancer is to create stiff competition for UniSwap and make themselves the industry leaders in the AMM field on Ethereum. Many believe this is possible as the DEX functionality on Uniswap is the same as Balancer, as one Uniswap token-for-token pool is equal to the Balancer pool with two tokens set to 50/50, or 1:1, value.

Decentralised Finance (DeFi) series: tutorials, guides and more

With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

Tutorials and guides for the ESSENTIAL DEFI TOOLS:
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
July 23, 2020