In recent years, decentralized exchanges (DEXs) have gained popularity as a more secure and privacy-focused alternative to centralized exchanges (CEXs). A decentralized exchange operates on a decentralized network, meaning that users have complete control over their funds and trade orders, without the need for intermediaries.
One of the most popular DEXs in the market today is Sushi, a decentralized exchange that allows users to trade cryptocurrencies in a trustless environment.
You may be familiar with using a centralized exchange (Binance, FTX, etc.) whenever you want to trade one crypto asset for another. These exchanges act as the middlemen between the buyer and seller of the crypto asset. To trade on a centralized exchange, you are required to deposit your assets on the exchange. Therefore, the exchange has control of your assets and not you.
To counter the above drawback, a decentralized exchange like Sushi lets you trade one crypto asset for another directly from your Web3 wallet. Hence, you are not required to deposit your crypto assets on the platform and can trade directly from your Web3 wallet, thereby keeping total control of your crypto assets.
If you're considering making the switch from a centralized exchange to Sushi, here's a step-by-step guide on how to get started!
First Steps To Using Sushi
As previously mentioned, one of the most popular DEXs in the market today is Sushi, a decentralized exchange that allows users to trade cryptocurrencies in a trustless environment. Below, we will outline the steps needed to get started on Sushi!
You will first need to have your own crypto wallet, and there are two types of wallets you can use: Hot Wallets & Hardware Wallets.
Hot Wallets
Hot wallets, such as MetaMask or MyEtherWallet, provide you with full control over your cryptocurrency. Hot wallets do not rely on a third-party custodian to keep your crypto safe (known as non-custodial wallets). Instead, the software to store your crypto safely is provided, but it is your responsibility to remember and secure your password, which is often referred to as your private key or seed phrase. Losing or forgetting your password means you will have no longer have access to your crypto, and if someone else discovers your private key, they will have full access to your assets.
There are many benefits to using a non-custodial wallet, including full control of your crypto security and the ability to participate in advanced crypto activities such as yield farming, staking, lending and borrowing.
Here are the steps to set up a hot wallet:
- Download a wallet app; popular options include MetaMask and MyEtherWallet
- Create your account; no personal information, not even an email address, is required
- Write down your private key; it will be presented as a random 12 or 24-word phrase, which should be kept in a secure location
- Transfer your crypto to your wallet; You may not be able to buy crypto with traditional currencies, so you will need to transfer your crypto from another source
If you currently hold crypto on a centralized exchange like Coinbase or Binance, your crypto is held by them. You can download a non-custodial wallet to take full advantage of the benefits they offer; some people even choose to have both a hot wallet and a self-custody wallet to make it easy to buy crypto with traditional currency and participate in advanced crypto activities. Setting up either type of wallet is free.
Learn more about how to setup a MetaMask wallet here.
Hardware Wallets
Hardware wallets are physical devices (about the size of a USB drive) that store the private keys to your cryptocurrency offline. While they provide advanced security by keeping your crypto safe even if your computer is hacked, they are also more complex and expensive to use, with prices ranging from $100 and up. To set up a hardware wallet:
Important: Make sure to order the device from the official website and that the package is fully sealed and wrapped in plastic upon its delivery - if not, send it back and request a new one!
- Install the software provided by the manufacturer; this can be downloaded from the company's official website
- Transfer your cryptocurrency to the hardware wallet; similar to non-custodial wallets, hardware wallets do not typically allow the purchase of crypto using fiat currencies, so you must transfer crypto to the wallet first
Transferring Your Crypto To Your New Wallet
Once you have your wallet set up, you will need to withdraw your coins from the exchange they are on. Binance, Coinbase and others all offer ways to withdraw your cryptocurrency.
When transferring crypto to a non-custodial wallet, the first step is to locate your public address in the new wallet. You should never give out your recovery phrase to anyone as this would give full and immediate access to your funds. Instead, only your public address is required to receive crypto.
The process of getting your crypto into a non-custodial wallet involves sending it from your exchange. It's important to ensure that you are only sending the type of crypto that is supported by the new wallet. For MetaMask or MyEtherWallet, this is Ethereum (ETH) and any Ethereum-based (ERC20) token (when on Ethereum mainnet). To send crypto, you'll need to find your Ethereum account in your exchange app or website and have your new MEW wallet or MetaMask address handy.
In the exchange interface, find the Withdraw or Send function and enter your new wallet address in the appropriate field. It is recommended to first send a small amount in one transaction to ensure everything goes smoothly. After confirming and sending the amount of crypto you want, it should show up in your MEW wallet or MetaMask extension within a few minutes. However, this will depend on the processing times of your exchange.
It's important to be mindful of the type of crypto you are sending and to double-check the address you are sending to, as even one character off in the address could result in sending your funds to a completely different wallet.
Using Sushi
Once your crypto is in your wallet, you can easily connect it to Sushi and start trading or farming!
- On the Sushi homepage
- On the swap page, click the Connect Wallet button in the top right corner
- Select the wallet you wish to connect
- Choose the specific account you want to utilize
- Select the Next button
- Select the Connect button
After completing these few steps, your wallet will be successfully connected to Sushi! You can confirm this by checking your public address in the top right corner of the swap page.
Swapping Crypto Assets On Sushi
Swapping is a feature that allows for secure and decentralized trading of crypto assets. To perform a swap on Sushi, follow these steps:
- On the Swap page, select the token you want to trade by clicking on its icon
- Search for or click on the desired token
- Enter the amount of tokens you want to trade
- Click the Swap button
- Approve the swap by selecting the Approve button (if necessary)
- Confirm the swap by clicking the Confirm button in your connected wallet
You can read a more in-depth example of trading directly on Sushi here.
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