How to Buy Crypto on Pancakeswap Using Metamask Wallet: A Step-by-Step Guide
The rise of decentralized finance (DeFi) gave rise to decentralized exchanges (DEX). What is DeFi? This is an entire ecosystem of cryptocurrencies known as DeFi tokens, and DEXs are exchanges where you can buy such tokens.
To buy tokens on DEXs, all you need to do is connect a wallet. Metamask is one of the wallets used for this purpose, and this guide shows how to use it to buy DeFi tokens on Pancakeswap.
Metamask is a browser extension that serves as a cryptocurrency wallet used to interact with the Ethereum blockchain. Unlike a regular wallet, this one only supports ERC20 tokens, which are tokens based on the Ethereum blockchain.
It recently started supporting BEP20 tokens as well, on Binance Smart Chain (BSC). If you are an absolute beginner, you should learn more about how to get started with Metamask.
You can easily set up a Metamask wallet by simply creating a password. You can then add the Ethereum blockchain or BSC tokens to it. Hundreds of tokens are supported, so there is a good chance that the one you are interested in will be supported if it is based on these two blockchains.
What’s really great about the wallet is that you can add unsupported tokens to it through the “add token” option. As a Web3 wallet, Metamask also supports Web3 decentralized applications (Dapps) and non-fungible tokens (NFTs).
If you prefer to use your mobile device, you can also access the wallet by installing it from the Play Store or iOS Store.
Metamask is used to store and manage your account keys. Like a regular wallet, it also broadcasts transactions, as well as sending and receiving ERC20 and BEP20 tokens.
It is also easy to swap tokens in the wallet using Metamask’s “Swap” feature. The wallet aggregates multiple DEXs to get the best exchange rates for swaps. A lot of people don’t know what DEXs are, but they’re pretty easy to use.
What is Pancakeswap?
Pancakeswap is one of the best decentralized exchanges. This should not be confused with Pancakeswap (CAKE) the token, which is the native token for the exchange. Pancakeswap is designed specifically for trading BSC-based DeFi tokens.
In addition to trading DeFi tokens, you can also mine liquidity and stake the CAKE token to receive rewards on Pancakeswap. Unlike centralized exchanges, you can simply hop on the internet and start using the DEX without any registration and no personal data required.
Metamask was first launched in 2016 and now has millions of monthly users. Indeed, the wallet has found its relevance, especially in the DeFi ecosystem. Check out this short guide to decentralized finance to learn more about the ecosystem if you’re just starting out.
If you want to easily buy or trade DeFi tokens, using something like Metamask is inevitable. Moreover, as the world moves towards Web3, the wallet is also becoming more and more relevant as only wallets like Metamask can interact with decentralized exchanges, dapps and NFTs.
Since Pancakeswap is a DEX designed to trade BSC-based tokens, this guide only focuses on BSC-supported tokens. There are tokens available on both BSC and Ethereum.
You can also trade the BSC version of these tokens on Pancakeswap. So how do you buy a token on Pancakeswap using Metamask?
1. Create a wallet
The first thing to do is to create a Metamask wallet. If you already have one, then congratulations, you can move on to the next step. Otherwise it’s as simple as going to metamask.io and clicking on the blue To download button. Supported browsers include:
You will then be asked to create a strong password, which should be something you can easily remember but hard for others to guess. After creating a password, you will be prompted to copy and store your passphrase in a safe place, you should do as suggested.
The passphrase is usually a 12-word phrase that you can use to recover your wallet if something should happen to your device or if you forget your password.
You should write them down, and you will be asked to enter them in the correct order to show that you really wrote them. Countless people have lost a fortune because they skipped this step.
2. Add funds to Metamask
Once your wallet is set up, you will need to fund it with BNB, which is BSC’s native token. One way to do this is to buy by clicking on the To buy button in the image below.
The other method is to send the asset from another wallet or exchange to Metamask by simply copying the address at the top and sending the BNB to it. The default blockchain for the wallet is Ethereum, so you need to change it to BSC by clicking the down arrow next to Ethereum as shown in the picture below.
Select Binance Smart Chain from the drop-down list, and you’re ready to go.
3. Connect Metamask to Pancakeswap
To connect your Metamask Wallet to Pancakeswap, go to pancakeswap.finance. There you will see the Connect Wallet in the upper right corner, as shown below.
Click the button and select Metamask from the list of wallets, and you will be logged in. You should see a wallet icon instead of the login button, with the first two and last six characters of the wallet address.
4. Buy Crypto on Metamask
Finally, go to Swap like in the picture above. Click on it and select Swap from the drop-down menu. You should have the screen below.
Assuming you want to buy CAKE, the native token for Pancakeswap as shown, all you have to do is enter the amount of BNB you want to exchange for CAKE. Click on MAX if you want to use all your BNB, but it is not advisable because you need some BNB to pay the fees in the future.
Slippage, the amount of variation from the expected rate, is set to 0.5% by default. You may need to increase it depending on the token you are interested in and the network congestion at the time you want to trade.
If all goes well, you will see a highlight SWAP button below. Click on it and your trade is complete. Congratulations, you have successfully purchased your first crypto on Pancakeswap using Metamask.
Metamask was designed with security as an inherent feature since it is non-custodial. This means that no user data is stored there, so there is no chance of hackers stealing your data.
It is, however, a hot wallet and hot wallets are the most vulnerable of all. For someone looking to interact with Ethereum, Metamask is a risk worth taking.
What should you consider before going ahead with Metamask?
- Does not store user data
- No KYC required to use
- Wallet is Open-Source which makes it quite safe to use
- Hot wallets are vulnerable
- Only supports Ethereum and BSC based tokens.
After going through this article and seeing how to buy crypto with Metamask, is Metamask worth using? If you want to interact with DeFi tokens on Ethereum and BSC, yes.
DeFi tokens, Dapps, smart contracts and NFTs are becoming the order of the day and Metamask is one of the main gateways to the ecosystem, so yes, it is worth using.