Background
A few details about MetaMask to introduce you to it, if you haven’t used it before.
MetaMask Wallet
It was started in 2016.
The current user base is estimated at 30 million users.
It Supports Ethereum and Ethereum compatible Networks, such as Polygon, Optimism, Arbitrum, Binance Smart Chain, Avalanche Contract Chain, Fantom, and Celo.
It allows you to store NFTs from this networks.
It is primarily used as a Computer Desktop Application as a web browser extension, but also has a popular Mobile Application used on mobile devices like phones or tablets. And it’s latest innovation is a Portfolio Application.
If you don’t use it and want to download it and try it out, download it from the official website to avoid viruses and hacks.
Now back to the star of this show...
MetaMask Portfolio
- This is Metamask’s latest innovation which allows trading between your wallet and decentralized cryptocurrency exchanges, otherwise known as Dexs.
- It also allows staking, and bridging
- You can also buy crypto with fiat, ACH transfer, card payments and digital wallets, including PayPal.
Fiat payment methods ithus incorporated, and this makes it a centralized exchange substitute.
Trading cryptocurrency from your wallet
The ability to trade tokens inside MetaMask is a great feature is one of Metamask’s most important innovations called MetaMask Portfolio
This feature allows you to trade tokens in your wallet with tokens on many other decentralized exchanges or DEXs.
This feature also allows you to swap tokens across different networks or blockchains, something usually restricted or confined to Centralized Exchanges.
This currently allows you to trade between these blockchains:
Ethereum, Arbitrum, Optimism, BNB Chain, Polygon and Avalanche.
This feature allows you to trade for tokens which are not currently listed on the main Centralized Exchanges. And it allows you to trade using a preselected and vetted group of providers of this cross chain trading. One of the biggest risks of cryptocurrency is trading tokens across bridges, and bridges are a frequent target of theft via hacks or exploiting weakness in the code. This vetting process by the very good developer’s at Metamask and the Whitelist of outside developers they allow to develop products for their most important product Metamask, so this instills confidence in the bridge.
This feature allows you to swap tokens with fewer approvals, and most importantly they built in slippage production, which means it provides an important tool to preserve your buying power. Let me explain briefly; there is a tendency for price to go up when anyone buys tokens, so the first token purchased are cheaper than the last tokens purchased in the same order. Ultimately this means you get fewer tokens for a set amount of money. Slippage protection means you pay almost the same amount for the last tokens as the first tokens in your order and this means you get more tokens.
Example:
You place an order for a thousand tokens for one dollar, at a cost of one thousand dollars.
The price of the first 500 tokens is on average 1 dollar, but the price on the second 500 averages 1.5 dollars, so you get 500 tokens for 500 dollars on the beginning of the order, but only 350 tokens on the second part of the order.
So instead of 1000 tokens for 1000 dollars, you only got 850 tokens, because you paid one dollar for first 500, but due to slippage you paid 1.5 dollars for the second 500 and you don’t have enough money to get the full 500, only 350 tokens.
This can be for many reasons, such as there were only 500 tokens for sale at one dollar, or someone else placed an order the same time as you, they got 500 tokens at one dollar, and then sold them to you at 1.5 dollars per token. This is slippage and MetaMask helps you avoid it.
Not your keys, not your crypto
Metamask is a custodial wallet, meaning you are in complete custody of your cryptocurrency, unlike a centralized exchange where the exchange holds your cryptocurrency.
MetaMask Fiat Onramp
MetaMask allows you to connect your bank account to the wallet, transfer cash to purchase cryptocurrency, and sell your cryptocurrency to obtain cash, which you can then transfer to your bank account.
This means MetaMask allows you to use it as a cash onramp into cryptocurrency, and a cash offramp from cryptocurrency.
This is a revolutionary idea, because before the only way to get cash into cryptocurrency was to use a centralized exchange, or buy Bitcoin with cash, and then trade Bitcoin for the cryptocurrency you really wanted.
Last Words
MetaMask Portfolio brings these valuable features to the cryptocurrency ecosystem, and I think they are really valuable.
The ability to use it as a cash onramp, trade cash for cryptocurrency, trade cryptocurrency for other cryptocurrencies, and interact with decentralized finance protocols and self-custody your cryptocurrency is a fantastic group of use cases. Although we must remember MetaMask is a hot wallet, so not the best choice for storage of your cryptocurrency for the long-term, but it is much safer then a centralized exchange.
I suggest your check it out.
MetaMask launches direct fiat-to-crypto on-ramp service
Source
References:
How to sell your cryptocurrency for cash Link
How to use Metamask’s Swap Feature Link
Metamask wallet review by Milk road Crypto Link
MetaMask Crypto Wallet Review 2023: Pros, Cons and How It Compares by NerdWallet Link
MetaMask launches direct fiat-to-crypto on-ramp service
Link
Metamask Swap, a centralized exchange built into your wallet?