Introduction
Hello guys,
It's yet another great opportunity to me as I am in attendance in this week lecture. As days and weeks pass by, I continue to learn from this different professors. Today after attending the lecture delivered by the professor
@yousafharoonkhan where he explained in details about decentralized exchange and decentralized wallets. He gave a detail explanation on Trust wallet, Metamask, Uniswap & PancakeSwap, How to link Binance smart chain wallet to Binance Exchange. Part#2. At the end of the lecture, he gave a series of assignment and I will be attempting this assignment below. Let's get started.
Question 1
What is Liquidity in PancakeSwap, Explain with examples? And add Liquidity in PancakeSwap and explain all the steps with screenshot.(Explain in your own words)
Let's start by defining what is Pancakeswap? Pancakeswap is an exchange that runs on a decentralized application and it is used to swap BEP-20 token. Pancakeswap came in as a result of the emergence of smart contracts and the development of decentralized application. Note that before they coming of smart contract, crypto currency exchange was centralized. And this created many issues because it was not compatible with crypto currency since crypto currency is decentralized in nature. Hence the reason for the innovation of decentralized exchange like the Pancakeswap.
For a trading transaction to be carried out in a decentralized exchange, liquidity must be provided. Note that in the case of centralized exchanges, exchange and users are responsible for providing liquidity. In the case of decentralized exchange, users are responsible for providing liquidity since there is no authority in the decentralized application. Hence when a user provides liquidity he in turn earns a commission.
For instance, as a user I wish to contribute to Pancakeswap liquidity pool. And I am using USDT/BUSD trading pair. What ever value or money am adding to USDT should be the same with that of BUSD. Take for example if am to add $5 worth of USDT, it is recommended that I add the same $5 worth of BUSD as well. Now by adding these to the liquidity pool I will be earning a commission when ever any person trades with USDT, BUSD coins. The commission I will earn will be automatically transferred into my account by the decentralized exchange platform.
Adding Liquidity on pancakeswap
To add liquidity on pancakeswap exchange, you must already have a wallet, be it MetaMask, Trust Waller, Binance Chain Wallet etc., any of these stated wallet can perform the operations. The steps I used to make a demo of this are listed below.
- Open trust wallet and click on Dapps, search for pancakeswap to access pancakeswap platform
Question 2
How to connect Binancce exchange account with Binance smart chain or trust wallet. Explain all the steps through screenshot. And transfer any coin from Binance exchange to Binance smart chain.
To connect your Binance smart chain wallet to your Binance exchange account, first login into your Binance smart chain account.
Click the three-dotted lines, and choose the wallet direct option.
On the new page, click on Verify and connect my address.
The screenshot above is the last to bind your Binance exchange with with the Binance smart chain wallet. Then i went back and clicked on the extension again and as you can see my wallet is succcessfully connected.
After that click on the extension and copy the address of your binace smart chain account then go to your wallet exchange and click on withdraw
Here in this interface you will be required to choose your withdrawal be it crypto or fiat. in our case i am withdrawing crypto so i will input the adress i have copied and the amount of BNB i wish to withdraw and then click on withdraw.
- Next you confirm the transaction and then continue
Question 3
What is the difference between Trust Wallet and Metamask and which of them is better and why? Explain in your own words.
The difference between Metamask and Trust wallets are listed in the table below.
| S/No. | Metamask | Trustwallet |
|---|
| 01. | Metamask was developed based on ethereum Blockchain and accepts ERC-20 tokens. | Trust wallet was developed based on Binance Blockchain. |
| 02. | Metamask can be used in both mobile and computer devices. | Trust wallet is only available on mobile devices and when connected to a Binance exchange account. |
| 03. | Metamask is mostly used to store tokens on the Ethereum blockchain | Trustwallet is more versatile compared to Metamask. |
Which is better?
To me Trustwallet is better, the reason I choose Trust wallet over Metamask is not far fetched unlike the Metamask which support only Ethereum Blockchain network, the Trust wallet support a wide range of blockchain and tokens. They only disadvantage I have seen about the trust wallet is the fact that it only support mobile devicees aside that I think Trust wallet is the best when compared to Metamask.
Question 4
What is meant by PancakeSwap and Uniswap?
Pancakeswap is a decentralized exchange platform where transaction can be carried out just like the one we do on traditional crypto currency exchanges but in this case without any authority. The transactions carried our in the Pancakeswap exchange include trading, commissions, passive income by contributing to the liquidity pool. Just as I earlier stated it is a decentralized exchange platform hence users are not answerable to any authority. The Pancakeswap exchange is built on the Binance Smart Chain network. The platform has it's own coin called CAKE. As at the time of doing this task, the current price of Cake is $13.75
UniSwap was established in the year 2018. It is a decentralized exchange platform where transaction can be carried out as well. UniSwap also have room for users to earn passive income by contributing to the liquidity pool. UniSwap runs on the Ethereum network. The platform has it's own coin called UNI. As at the time of doing this task, the current price of UNI is $17.26
And what is the main difference between them?
The difference between Pancakeswap and Uniswap is seen in the table below.
| S/No. | Pancakeswap | Uniswap |
|---|
| 01. | Pancakeswap is based on Binance Blockchain powered by the Binance smart chain | Uniswap is based on the ethereum blockchain and powered by the Ethereum network. |
| 02. | Pancakeswap is not too popular hence has lesser asset listed | Uniswap is very popular, has more assets listed, and a higher trading volume |
| 03. | Less transaction fees and gas fees is required | More transaction fees and gas fees is required. |
| 04. | Transactions are faster here | Transactions are not as fast as that of Pancakeswap |
Explain the different futures of both.
The both exchange platform have similar futures since both of them are decentralized in nature. The futures include;
- swap
- staking
- Liquidity pool
Swap
Swap is the ability to exchange one crypto currency to another. Pancakeswap and Uniswap both provide exchange (swap) services as their core function in the decentralized ecosystem.
Staking
Staking is the process of locking your asset and then allow it for some period of time to earn a passive income to you as a user. Both Pancakeswap and Uniswap offers this future.
Liquidity pool
Liquidity future talks about making your own contribution to the pool so that when investors or traders trade that currency you will also earn some form of commission. This future is also available for both Uniswap and Pancakeswap.
Which of these exchange is better and why? Explain in your own words.
This will depend on the type of trader, in my case, since I am a small trader, I prefer the Pancakeswap this is because of the low transaction fees and also it is faster in transaction when compared to Uniswap.
Question 5
How to connect Pancakeswap with Metamask. Explain this with screenshot.
Connecting Metamask to pancakeswap
Pancakeswap and Metamask are both decentralized-based exchanges and wallets respectively. To connect pancakeSwap exchange to Metamask wallet to follow the steps below
- I lunched the Metamask wallet and then I selected browser from the left options.
Conclusion
In conclusion, we can say that decentralized wallets and exchanges provide a more secured, and easy to use crypto experience for different users. To me keeping asset in a decentralized wallet is much more reliable than keeping it in an exchange.
As we have seen at the course of my discussion, Pancakeswap and Uniswap are top decentralized exchanges which are based on Binance smart chain and Ethereum blockchain respectively. From the research and study I have been able to exploit the deathres of both Uniswap and Pancakeswap.
Metamask and Trust wallet have similar features though as I earlier explain the Trust wallet is only available for use on mobile devices whereas the Metamask is use on both Phone and PC. More also, Metamask is an ethereum based wallet whereas Trust wallet is a Binance smart chain based wallet.
Thank you professor
@yousafharoonkhan for this amazing lecture I have really learnt a lot.
Hi @simonwigwe
Thanks for participating in the Steemit Crypto Academy
Feedback
Change ransaction to transaction
Thanks prof.