Getting Started: The Defi Walkthrough
The best way to learn is by doing, so let's cover the basics of cryptocurrencies by going into the ecosystem and practising what we preach
Last updated
The best way to learn is by doing, so let's cover the basics of cryptocurrencies by going into the ecosystem and practising what we preach
Last updated
Welcome! So you might have done bits of research, and looked up some definitions, but that is all a bit meaningless until you see cryptocurrency in action. We need to get out there and be making wallets, trading coins, borrowing from peers and staking for rewards. These are just a few of the many possibilities available in the cryptocurrency ecosystem, but it's a great place for us to start.
This is step 1 for us, because it is such an essential part of interacting with the whole Defi ecosystem, and even more than that, the whole Web 3.0 system. Check out our article on Web 3.0 to help grasp the significance of this!
We have chosen MetaMask as our web 3.0 wallet of choice. Go ahead and follow our guide below on how to set one up and then come back here once you are done...
… Great! You've officially levelled up. You're one step closer to becoming a crypto expert. Now that you have your own web 3.0 wallet, let's explore what we can do with this, next step let's connect to a decentralised exchange or DEX .. read up on what a DEX is here. We will be looking at Pancake swap, which is on the Binance Smart Chain.. to access this we will need to add the BSC network to our MetaMask wallet. Don't worry it's not as complicated as it sounds, just follow the steps below and we'll meet you back here.
OK wonderful, now we are ready to start exploring the Defi ecosystem. Let's go connect to a decentralised exchange and have a play around..
A DEX is a place that you can go to to swap coins. You trade with a pool of coins, known as a liquidity pool and you don't need to sign up to the exchange in the traditional sense, you just need to connect your MetaMask wallet and you are good to go!
Now that we have that done, had a good click around, you will notice that we first need to buy some coins to trade with! This is where we come to a roadblock in the crypto world.. how do you get fiat currency into the cryptocurrency ecosystem? This is more complicated than it needs to be, and is something that Scallop will solve once it's launched! For now however, we have to use a fiat on-ramp, which is any exchange that accepts cash deposits in your native currency like USD or GBP. Scallop have always been supported by Kucoin and would recommend them as one of the largest and most trusted exchanges.
This is where we add cash to the equation. Kucoin accepts dollar deposits, so let's go ahead and set that up, and we'll meet you back here when you're done ..
OK great, by now you should have deposited some Fiat ('old system') money into your Kucoin account. This should be in the form of UST (Tether). So let's explore how to buy and sell different coins on the platform.
In this example we will be buying some BNB and SCLP tokens, as they will help us out in the next step.. but you can at this point buy any of your favourite cryptocurrencies, from the most famous like Bitcoin and Ethereum to the smaller and of course more exciting coins like SCLP! So click the link below to buy whichever coin you want and then we will meet you back here..
.. Welcome back! OK so now you will have some of your new coins in your Kucoin account. Let us transfer them to our web 3.0 wallet so that we can use them to interact with all sorts of other cool things in the ecosystem.
Awesome! So now you should have the coins that you bought and traded on Kucoin safely in your MetaMask. It may take a few minutes but they will be there. Now we can return to our DEX and you will see your new coins are tradable for any other coin on the DEX!
Ok let's recap a little now, you've come a long way already. You've created a smart wallet and connected it to the Binance Smart Chain, you've on boarded fiat currency and traded it, and you've connected to your first DEX which is a Defi protocol! So now, if you are still with us, let's go and explore some more Defi protocols!
So one of the main things that a bank does is provide borrowing and lending services, they charge and interest rate and they let people borrow that they think are credit worthy. Now, in the defi space this is all done between users without a bank or any middle man! They do this by using smart contracts that cannot be breached. This means you can also act as the bank, and collect interest for lending out your funds! Read more here..
So let's go visit AAVE and connect our MetaMask wallet and see what we can do..
AAVE is a ERC20 project, which is built on the Ethereum network, this means that you will need Ethereum instead of BNB to pay for fee's etc.
Once you have loaded some Ethereum into your wallet, you will be able to interact with the different borrowing and lending markets on the protocol.
Now let's connect our wallet to Scallop's staking protocol and earn rewards for your SCLP tokens...
This is also super simple, simply connect your wallet to https://app.scallopchain.com/ - make sure you have both $SCLP and $BNB tokens and then choose how much you want to stake.
You are also helping the project out, locking up supply of SCLP which has a positive effect on the price. We appreciate this and hence we reward you for your efforts!
Ok wow, so you're a bit of a Defi pro now. You have interacted with an Ethereum Defi protocol, a BSC protocol and you've set yourself up on an exchange. Hopefully by going through all these steps you've started to get a practical sense of what is possible in this space. Now as you go away and read up on all these different projects, you will be able to understand what it all means in terms of what is best for the user.
If this all seems a little complicated, it is good to understand that Scallop simplifies all these steps into one app. We are here to unlock all this potential with unmatched simplicity.
Learn more about us here
Be one of the first to join the app by joining the waitlist here..
