Uniswap and MetaMask are some of the major names that are thrown around when it comes to decentralized exchanges. The two will often be used together but they are from different organizations and serve very different purposes. In this text, we break down each of them and find the relation between the two.
What’s the difference between MetaMask and Uniswap? The difference between MetaMask and Uniswap is that Uniswap is a decentralized exchange for swapping ERC20 tokens with other ERC20 tokens. MetaMask is a cryptocurrency wallet that can be applied as a browser extension to link a browser to the Ethereum blockchain.
The two can be linked to make it easy for users to trade tokens in the Ethereum blockchain.
MetaMask and Uniswap are quite compatible and a lot of people choose to use them together to create a wholesome token trading experience. They complement each other’s strengths and since both are open source it there is a lot of room for improvement.
Now let’s discuss each of these two in a little more depth.
MetaMask vs Uniswap
You’re a smart investor in the crypto space, so you know that there are a ton of different exchanges out there. Some of them are centralized and some are decentralized.
And then you have to decide whether or not to use an exchange with fiat support or one without it – because if your goal is just to buy cryptocurrencies, then at least for now the only way to do that is on a platform with fiat transactions enabled.
MetaMask vs Uniswap? What’s the difference? Let me break down what these two platforms offer!
What is Uniswap? Uniswap is a decentralized exchange protocol for ERC-20 tokens on Ethereum. Uniswap is transparent and censorship-resistant. It uses automated liquidity protocol instead of order books which are common among centralized exchanges. The protocol is programmed to digitally alter token values depending on how well it is sold or bought.
Uniswap is the second-largest cryptocurrency project in terms of market capitalization and is compatible with various wallet infrastructures such as MyEtherWallet AND MetaMask. Uniswap was only introduced in 2018 and has since experienced steady growth in users over the years because of the various perks it offers.
For example, you can swap tokens directly from your personal wallets without intermediaries, no custody, and no trust required. Uniswap achieves this through the use of smart contracts that allow clients to swap tokens, earn fees through liquidity and remove liquidity from tools.
What are some advantages of Uniswap?
- There is no KYC verification. Unlike centralized exchanges, you don’t need the Know your customer verification since trading is done directly from your wallet. Hence your wallet is the only identifier.
- It is Non-custodial. Uniswap protocol does not hold your funds making it as secure as the blockchain.
- Anyone can create their ERC20 token and use it to generate liquidity by pairing it with ETH.
- Cheaper rates. Uniswap charges a flat rate of 0.30% for transactions of all volumes so, it might be a lot cheaper than other alternatives for large transactions
- Offers self-custody to users, where they hold their private keys when trading.
- Offers faster access to new tokens. Due to the lack of verifications, you can get your hands on new tokens faster than everyone else hence taking advantage of the price fluctuations.
There are also some limitations associated with Uniswap such as;
- Transactions will sometimes fail. Transactions sometimes fail with Uniswap because of issues like; putting low gas fees, insufficient liquidity in the pool, and token prices exceeding the maximum price you set.
- Anyone can create their ERC20 tokens meaning scammers can do it too. The introduction of lists helped sort this issue.
- Network congestion will sometimes cause inflated gas fees but Ethereum 2.0 should help with this one.
Uniswap puts users in control of their safety such as giving them custody of their assets. So, they are not liable for any risks including losses, that’s why users need to conduct due diligence to assess the risks before trading tokens with them.
MetaMask is arguably the most used Ethereum wallet globally. It can hold any kind of asset within the Ethereum world including Uniswap tokens. MetaMask has been designed to make accessing Ethereum Decentralized apps (Dapps) easier. Dapps can be challenging to use and MetaMask aims to help with that.
When MetaMask is connected to Ethereum Dapps, it allows users to spend their coins and trade their tokens and connects them to all services on the Ethereum network. It also provides entry into the decentralized finance world through apps like PoolTogether and Compound.
MetaMask is open source, meaning it can be trusted as everyone can have access to its software. On your phone, it serves as an application but on browsers like Chrome and Firefox, it is an extension.
Some Pros of Using MetaMask;
- It is popular- MetaMask has amassed a lot of fans globally and for that reason, its developers are motivated to continue developing its software.
- Easy Access- It is very easy to use and anyone can create a wallet and even import existing wallets with a few clicks. You would only need a browser, a computer, and a trusted internet connection.
- Open source- Open source software means users can ensure that it is safe before using it. Furthermore, they can also access information related to updates and the software.
And now the cons;
- Offers less security than other wallets. MetaMask is a hot wallet and hence it is more vulnerable during online transactions than cold wallets like Trezor or Ledger. So, users need to take extra preventive measures such as not storing the seed phrase on their computer.
- User information- even though MetaMask does not collect your data, browsers might do the opposite. Browsers are known to collect a person’s activity as part of big data. So, ensure every other extension you have is legit as some can steal your data.
- It is Ethereum based only. MetaMask does not support any network besides Ethereum and many users hope that this will change in the future.
How Can You Link MetaMask to Uniswap?
Uniswap and MetaMask make a good combination and users can benefit from linking the two to have full access to Ethereum services. Here are the steps
- Open your preferred browser and install the MetaMask extension
- Type in the URL Uniswap.org in the address bar and click enter
- Once on the homepage, look for a button saying “Launch app” and tap it.
- The Uniswap Interface should reveal itself and this is where you swap ERC20 tokens
- Click on “Connect wallet” at the top right corner.
- Choose the correct wallet and hit “next” and then “connect” once the popup window shows up, revealing your wallet address.
- You’re done, Happy Trading
MetaMask and Uniswap carry major reputations separately and when linked they provide an easier experience for the user to conduct their token trading and other crypto activities.
Just remember to practice internet safety and conduct your due diligence before using either or both of them together. Also, be responsible in your transactions by only purchasing what you can afford.