How to Buy, Sell, and Trade ERC-20 Tokens on the Ethereum Network
27 Gennaio 2024 - 6:00PM
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[toc] The Ethereum network stands as a revolutionary innovation in
the realm of blockchain technology. It serves as a robust platform
for building and deploying decentralized applications (dApps),
fueling the growth of decentralized finance (DeFi) and transforming
the way we interact with financial services. However, with its
widespread adoption and increasing popularity, Ethereum has faced
challenges of scalability and high transaction fees, leading to the
development of Layer 2 scaling solutions to enhance its
capabilities. The Ethereum blockchain hums with innovation,
birthing a new breed of digital assets known as ERC-20 tokens.
These versatile gems unlock a treasure trove of possibilities, from
voting rights in decentralized communities to fueling innovative
applications and even representing virtual currencies. ERC-20
tokens are standardized building blocks on the Ethereum network.
They adhere to a specific set of rules, ensuring seamless
interaction and divisibility, making them perfect for trading and
diverse applications. Think of them as digital coins, each with its
unique identity and purpose, ready to be exchanged, used, and
explored. Whether you’re a seasoned crypto trader or a curious
newcomer, navigating the thrilling world of ERC-20 trading can be
challenging. This comprehensive guide will equip you with the
knowledge and tools to confidently buy, sell, and trade these
digital assets on the Ethereum network. Related Reading:
Solana Meme Coin Season: A Guide to Buying, Trading, And Profiting
From SOL Tokens Some of the major and popular ERC-20 Tokens are
Tether (USDT), Polygon (MATIC), Chainlink (LINK), Uniswap (UNI),
Lido DAO (LIDO), Maker DAO (MKR), amongst many others.
Features of Ethereum Network Ethereum’s innovative design sets it
apart from other networks, paving the way for a decentralized
future of finance, applications, and beyond. Distinguished by its
unique features and capabilities, it stands as one of the pioneers
of Blockchain Technologies with standout features like: The
Power of Smart Contracts The Ethereum Virtual Machine (EVM) serves
as the core engine that drives the execution of smart contracts on
the Ethereum network. These smart contracts are self-executing code
that automates various actions and agreements, forming the
foundation of dApps and DeFi protocols. EVM compatibility is
crucial for deploying and interacting with ERC-20 tokens, the most
common token standard on Ethereum. Unlike static databases,
Ethereum boasts the groundbreaking ability to execute
self-enforcing agreements through smart contracts. These
programmable pieces of code automate a wide range of tasks,
enabling trustless interactions and the creation of innovative
applications in diverse sectors. Related Reading: How To Bridge And
Trade On The Injective (INJ) Network Layer 1 and Layer 2:
Addressing Scalability The Ethereum mainnet functions as a Layer 1
blockchain, the base layer where all transactions are ultimately
settled. To address the scalability bottlenecks on this primary
layer, Layer 2 solutions have emerged as a promising approach.
These solutions aim to offload a significant portion of transaction
processing off-chain, resulting in increased throughput, faster
confirmation times, and significantly reduced transaction costs. A
Platform For Innovation Ethereum isn’t just a cryptocurrency
platform; it’s a fertile ground for developers to build
revolutionary decentralized applications (dApps). From DeFi
protocols automating financial transactions to NFTs unlocking new
ownership models, the possibilities are endless. Gas and Gas Fees:
Fueling Transactions Within the Ethereum network, gas refers to the
computational power required to execute transactions and smart
contracts. Users pay gas fees to compensate miners for processing
their transactions. Gas fees are denominated in ETH, Ethereum’s
native cryptocurrency. Fueling Decentralized Finance (DeFi) As a
breeding ground for DeFi protocols, Ethereum empowers users to take
control of their finances. Borrow, lend, invest, and trade without
dependence on intermediaries, fostering a more open and inclusive
financial system. Ecosystem And Adoption Unlike centralized
projects, Ethereum thrives on a vibrant and passionate community.
Developers, miners, and users participate in its governance and
evolution, ensuring its development remains transparent and aligned
with the community’s needs. This growing ecosystem includes
decentralized exchanges (DEXs), gaming applications, and
more. Related Reading: Celestia Network: How To Stake TIA And
Position For 5-Figure Airdrops Exploring Layer 2 Scaling Solutions
Layer 2 scaling solutions offer a promising pathway to address the
scalability challenges faced by the Ethereum mainnet. They operate
as secondary layers built on top of the main blockchain, providing
alternative mechanisms for transaction processing and data storage.
Here are some common types of Layer 2 solutions: Sidechains:
Independent blockchains that run in parallel with Ethereum,
enabling faster and cheaper transactions. Plasma Chains:
Blockchains that leverage Ethereum for security and finality,
offering scalability benefits through data offloading. Optimistic
Rollups: The technology employed by the Ethereum network for token
transactions, which bundles multiple transactions off-chain and
submits a summary to the mainnet for verification. Beyond Features:
What Truly Sets Ethereum Apart? Ethereum’s uniqueness extends
beyond its specific features, encompassing its fundamental
characteristics and impact on the blockchain landscape. Network
Effect and Ecosystem: Through its early adoption and widespread
implementation, Ethereum has established a robust network effect.
Developers, projects, and users gravitate towards it, creating a
flourishing ecosystem that strengthens its overall value and
resilience. Related Reading: How To Buy And Trade Tokens On The SEI
Network Security and Trust: Built on a Proof-of-Work (PoW)
consensus mechanism, Ethereum offers a high level of security and
protection against malicious attacks. Its distributed nature
further bolsters trust and transparency, minimizing the risk of
centralized control. Flexibility and Adaptability: Ethereum’s
design prioritizes flexibility and adaptability. Upgradeability
mechanisms allow it to evolve and adopt new features to remain
relevant and address emerging challenges in the blockchain space.
Global Impact and Pioneering Spirit: Ethereum has gone beyond being
a mere technological advancement; it has ignited a global
conversation about decentralization, ownership, and financial
autonomy. Its pioneering spirit continues to inspire innovation and
shape the future of our digital world. How To Get Started on
the Ethereum Network for ERC-20 Tokens. To buy/sell ERC-20 Tokens,
you’ll need a crypto wallet. There are several crypto wallets to
choose from within the Ethereum network and, popular options
include software wallets like MetaMask, Trust Wallet, Coinbase
Wallet, Binance WAllet, etc. If you are using a desktop
computer, you can download Google Chrome and install the MetaMask
Wallet Chrome extension. If you prefer using your mobile phone, you
can download MetaMask wallet via Google Play or the iOS App
Store. Just make sure that you are downloading the official
Chrome extension and mobile app by visiting MetaMask Wallet’s
website. Once you’ve registered and set up your wallet via the
Google Chrome Extension or via the mobile app you downloaded,
MetaMask wallet allows users to manage their cryptocurrency wallets
and interact with decentralized applications (DApps) to execute
transactions on supported blockchain networks directly from their
browsers. (Write down your seed phrase on a piece of paper and keep
it in a safe place!). Related Reading: How To Buy, Sell, And
Trade Tokens On The Optimism Network Now, you’ll need to connect
and add Ethereum to your MetaMask wallet. You may refer to MetaMask
support page for reference on their website. Trading ERC-20
Tokens on the Ethereum Network. In order to ERC-20 token trades on
the Ethereum network, you will need to buy ETH as your base
currency. You can buy ETH on centralized exchanges such as Binance,
copy your wallet address from Metamask, and then send the ETH from
Binance to your Metamask wallet. You can also purchase ETH
directly within the Metamask wallet using traditional payment
methods such as credit or debit cards, etc. Just click on the
“Buy/Sell” button within Metamask to open the interface. Here, you
can put how much ETH (or any other token) you want to buy in terms
of dollar terms, pick your payment method, and then click “Buy”.
Note that to buy crypto directly within Metamask, you will need to
provide info such as your country and state. However, it is a
straightforward process that only takes a minute. It’ll only take a
couple of minutes at most for your ETH to arrive in your wallet.
Once the ETH arrives, you are all set to begin trading ERC-20
tokens on the Ethereum network. So, head over to UniSwap to get
started on your trading journey. Related Reading: How To Buy, Sell,
And Trade Tokens On The BSC Network How To Trade ERC-20 Tokens On
The Ethereum Network Using UniSwap Uniswap is a decentralized
exchange (DEX) protocol built on the Ethereum blockchain. It allows
users to trade Ethereum-based tokens directly from their wallets
without the need for intermediaries or traditional order
books. Uniswap offers users a simple and straightforward way
to buy and sell a wide variety of tokens. Be sure you’re on
the Uniswap website to protect your wallet. The first step is
clicking on the “Launch App” button at the top right corner, as
shown in the image below: The next step is clicking on the connect
wallet option on Uniswap at the top right corner, as shown in the
image below: Connect to your preferred wallet as shown below. (In
this case, it’s Metamask): Once connected, switch Metamask to the
Ethereum network. (If you’re already on the Ethereum network, you
do not need to switch): After connecting MetaMask to the Ethereum
network, go to Uniswap, and then you can start your ERC-20 Tokens
on the Ethereum network using UniSwap. Related Reading: How To Buy,
Sell, and Trade Tokens On The Arbitrum Network Trading Ethereum
Tokens On Uniswap The next step is to select your preferred tokens
on the UnsSwap interface and since Uniswap operates on a token to
token trading model, click on the “select token” button to select
the trading pair you want to trade against. For example, if
you want to buy USDT using ETH, select ETH – USDT, enter the
amount, then click on “swap” or “trade now” and confirm the
transaction in your Metamask wallet. You can view the tokens in
your wallet’s asset list. Buying and Selling ERC-20 Tokens with the
Metamask Wallet Ethereum Network users can also buy and sell tokens
using the Metamask extension wallet already connected to the
Ethereum network. To do this, make sure you’re connected to the
Ethereum network and have ETH to swap and pay for gas fees. Then,
navigate to the “Swap” button as shown below. This will take you to
the Swap interface inside Metamask. Using the image above as a
guide, you can also search for tokens using the name or the
contract address, just like on UniSwap. Input the amount of ETH you
want to swap, confirm that you have the correct token, and then
click “Swap.” Once the transaction is confirmed, the tokens you
just bought will be sent to your wallet. Related Reading: How To
Buy, Sell, And Trade Tokens on The Polygon Network Tracking ERC-20
Token Prices on The Ethereum Network ERC-20 token holders and
traders can take advantage of on-chain tools like DeFiLama to gain
access to comprehensive market insights for specific tokens. These
insights include price data and contract information, empowering
users to make well-informed trading decisions based on reliable and
up-to-date information. Dextools is a comprehensive analytic
resource for managing digital assets traded on ERC-20 Decentralized
Exchanges. It’s a vibrant analytical cryptocurrency resource that
provides statistical information on all leading blockchains and
crypto projects. Among these features, an exceptional one is
the charting functionality, which delivers both real-time and
historical price data for a wide range of tokens. By
utilizing these charts, users gain valuable insights into price
trends, trading volumes, and other pertinent metrics. This enables
them to pinpoint potential entry or exit points for their trades
with precision and confidence. For example, let’s assume you’re
$ETH for $LIDO, your trading pair is ETH/LIDO. Note, Trading pairs
serve as bridges between currencies. For example, the ETH/LIDOpair
allows you to acquire $LIDO tokens using Ethereum (ETH). Choose the
pair that fits your funding situation and trading strategy.
Consider using ETH if you already hold it, or fiat currencies if
you’re venturing in fresh. Let’s track the $LIDO token on
Dextools, here’s what we have: Conclusion Buying, selling, and
trading ERC-20 tokens on the Ethereum network can be a thrilling
adventure, opening doors to exciting investment opportunities and
unlocking the potential of decentralized finance. However, it
demands knowledge, caution, and a well-defined strategy.
Related Reading: How To Buy, Sell, And Trade Tokens On The
Avalanche Network This guide serves as your map and compass, but
the ultimate treasure lies in your own learning and exploration.
Navigate with confidence, trade responsibly, and remember that the
most valuable asset in this journey is your knowledge. Featured
image from CoinMarketCap, chart from Tradingview.com
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