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Introduction to DeFi | Getting Started with Your First DeFi Tool: MetaMask Wallet Part I

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Introduction to DeFi | Getting Started with Your First DeFi Tool: MetaMask Wallet Part I

After getting a general understanding of Decentralized Finance (DeFi) from the article "Understanding DeFi from Scratch - Practical Articles + Recommended Tools," the first step to entering the world of DeFi is to have a virtual currency wallet that can interact with it! There are numerous tutorials on installing MetaMask on the internet, and this article will provide more information on its latest features.

What is MetaMask?

Founded by ConsenSys, a company specializing in Ethereum technology, in 2016, MetaMask is a self-custodial cryptocurrency wallet software that allows users to manage their private keys independently. It currently has a web browser extension version and a mobile app version.

Basic Uses of MetaMask

Storage and Transactions: Users can use MetaMask to "deposit" and "send" cryptocurrencies. For example: transferring ETH from an exchange wallet to MetaMask or sending ETH from MetaMask to a friend.

Interaction with Blockchain Applications: Users can interact with financial applications on the blockchain. For example: exchanging different cryptocurrencies using Uniswap, lending, liquidity mining, insurance, etc.

NFT Collection: The MetaMask mobile app version currently supports viewing NFTs, allowing users to view their digital collectibles on their phones.

In addition, MetaMask also offers features for buying and exchanging coins through credit cards. However, there are more cost-effective ways to achieve these goals, so they are not commonly used.

How to Create a MetaMask Wallet?

Official download page with options for different devices

While the mobile app is convenient, the user experience with the mobile interface is not yet optimal when interacting with some DeFi platforms. Most people still prefer to use the MetaMask Chrome extension, so here is a tutorial on setting up the "Chrome Extension Wallet." Let's start by downloading it! Official download link: https://metamask.io/download.html

Let's start by clicking "Install MetaMask for Chrome" to install MetaMask on Chrome.

1. Enter Google Store to download and install

Select "Add to Chrome."

Grant permissions and click "Add Extension."

In the top right corner of your browser, you will see a puzzle icon. Click on it to find MetaMask. Click on the "pin icon" to keep it visible. Once pinned, you will see a small fox face in the top right corner of your browser, indicating that the installation is complete.

2. Create a Wallet Account

Click on the fox face to start creating your account. Click on "Get Started."

A prompt for data collection for improvement purposes will appear. You can choose based on your privacy preferences.

Next, select "Create a Wallet" to establish a new wallet.

Set a password for the extension. This password is not related to your cryptocurrency wallet private key; it is only for accessing the software.

It is recommended to read about Seed Phrase. This part is related to your wallet's private key. MetaMask will generate 12 English words in a fixed order corresponding to all your wallet's private keys, helping you back up your account data in a simple way. In the future, you can use this mnemonic phrase to access your cryptocurrency wallet on all devices that support MetaMask by choosing to import a seed phrase. Click on "Click to Display Mnemonic Phrase" to start recording! Make sure to keep it separately!

After properly noting down the mnemonic phrase, you will be prompted to enter it in the correct order:

Once entered correctly, you are all set! Remember, MetaMask cannot help you recover the mnemonic phrase, but you can back it up again under "Settings -> Security" while logged in.

MetaMask Wallet Basic Interface

Click on the small fox in the top right corner of your browser to view your wallet. It looks like this:

Network Switch: MetaMask supports Ethereum-compatible blockchain networks, and you can choose and switch networks here. Additionally, you can select "Custom RPC" to add blockchain networks like BSC, Matic, Fantom, etc.

My Accounts: There are several functions available when you click here.

  • Lock: Secure the software when you are away to ensure the safety of your account.
  • Networks: You can create multiple wallet addresses within the same network. You can switch between wallet addresses in MetaMask here. "Create Account" and "Import Account" are ways to manage wallet addresses.
  • Connect Hardware Wallet: Currently supports Ledger and Trezor.
  • Settings: You can set time, language, manage contacts, find the mnemonic phrase, and access advanced features.

Account Address and Name: Displays your customized address nickname and address. Click to automatically copy the address.

Address Information: Clicking on the three dots will reveal more options.

"Expand View" will take you to the full-page version of MetaMask.

"Account Details" will display the address QR code, address, and allow you to export the private key. Additionally, you can change the address display name here.

"View on Etherscan" will redirect you to the blockchain explorer Etherscan to view your account.

"Connected sites" shows which platforms your wallet has authorized connections with.

First Step: Don't Forget the Gas Fee

Regardless of the network you use, remember that all transactions require a gas fee! Therefore, before initiating any action other than receiving payments, make sure to set aside an appropriate gas fee to ensure successful transactions.

  • Ethereum Gas Fee: ETH
  • BSC Gas Fee: BNB
  • Polychain Gas Fee: MATIC
  • Fantom Gas Fee: FTM

Although MetaMask offers a coin purchase function, it is relatively costly as it involves buying via credit card. It is recommended to transfer funds from exchanges or other wallets for more cost-effective transactions.

How to Send and Receive Funds with MetaMask?

Receiving is straightforward; simply provide the sender with your address or QR code. It is crucial to double-check the address to avoid any losses. Remember the tragic tale: "Congratulations, you've inherited Bitcoin from 2010!" A humorous American short film depicts the nightmare scenario that crypto enthusiasts dread.

For sending, you can select "Send" on the main screen and enter the recipient's address in the "Add Recipient" field.

Next, input the cryptocurrency and amount you wish to send, choose the transaction fee level (slow, average, fast), and review the transaction details. After confirming, the transaction will be initiated. You can check the processing status of the transaction on the "Transaction History" page.

How to View Assets and Add Tokens?

With numerous cryptocurrencies available, not all coins transferred to your MetaMask wallet will automatically appear in the "Assets" section with their corresponding quantities and values. You need to use the "Add Token" feature to display the assets held in your wallet.

The simpler way to "Add Tokens" is as follows:

  1. Scroll down on the "Assets" page to find "Add Token."
  2. You can search for tokens or add custom tokens by using the "Search" or "Custom Token" options to find the desired cryptocurrency. Simply enter the name of the cryptocurrency for the search function.

3. For "Custom Token," it is recommended to first find the desired cryptocurrency on CoinMarketCap or CoinGecko to obtain the coin's contract address. Using UNI as an example:

Copy the contract address, paste it into the custom token field, and the other information will be automatically filled in. Alternatively, by clicking on the fox head on the CoinGecko page, you can automatically add it to your wallet information.

Can MetaMask Collect NFTs?

Absolutely, you can, but you cannot directly view NFT images or videos in the web version interface of MetaMask. Currently, this feature is only supported in the app version. You can switch to "NFT" display in the app:

You can also manually import unrecognized NFTs:

Essential Mental Preparations

Having a cryptocurrency wallet like MetaMask allows you to interact smoothly with the world of blockchain applications! However, the most crucial aspect is to be mentally prepared: At Your Own Risk.

Complete Responsibility: Blockchain creates a decentralized world, giving users "monetary autonomy." Consequently, users must fully bear the responsibility of safeguarding their assets. If you lose or disclose your wallet's mnemonic phrase/private key, there is no customer service role to recover your assets.

Complete Freedom: The blockchain world is a place of freedom and imperfections. Be prepared for events like hacking, platform shutdowns, scams, etc., and interact with blockchain applications with a risk-bearing capacity.

User Pays: Decentralized networks require users to pay gas fees to maintain operations. Therefore, all transactions require a fee, and sometimes the cost on the Ethereum network can be very high, which is a cost to consider.