What is the phantom wallet? How to use DeFi and NFT on Solana
You may have heard of Ethereum, a network infrastructure that recreates banking functions without banks. Instead, Ethereum uses smart contracts. Solana provides the same service, only better: very low fees and much faster transactions.
However, since these blockchain networks stand out, each uses different crypto wallets. The best wallet to use with Solana is Phantom. Indeed, this wallet is your starting point for interacting with Solana, the so-called Ethereum-killer.
Phantom: Solana Crypto Trading in your web browser
There are many ways to divide crypto wallets. For example, we can divide them by connectivity (cold versus hot), by platform (hardware versus software) or by ownership of your private key (custodian vs non-custodian). Shadow Wallet belongs to the hot, non-custodial software category, which means the following:
- No deprivation of liberty means that you have not given ownership of the private key to your wallet to a third party. For example, when you create an account on a crypto exchange, it is called a custodial wallet. While this is handy for quick crypto trading, giving a company your private key for an extended period of time is a big no-no. As it is often said in crypto, “not your keys, not your coins”.
- Software wallet means that Phantom is an application installed on your computer as a browser extension.
- Hot means it can be connected to the internet at any time. More precisely, with any DApp available in the Solana ecosystem.
While the mobile version of the Phantom Wallet is slated for 2022, for now it’s only available on desktop, available for download here. It supports all four major browsers: Chrome, Brave, Firefox, and Edge.
The phantom wallet is like MetaMask for Solana
The concept of crypto wallets integrating into web browsers is rather new, popularized by MetaMask for Ethereum.
The Shadow Wallet is Solana’s answer to MetaMask, as part of Web 3.0. Web 3.0 tries to bridge the decentralized nature of Web 1.0, where people and businesses had their own websites, with the modern functionality and interactivity of Web 2.0. To illustrate, when you access Solana’s ecosystem of hundreds of DApps and launch a blockchain game, Aliens vs. People, you will see an option in the upper right corner to connect your Phantom wallet.
This is the essence of Web 3.0. Once you connect the DApp to your Phantom, you will be able to freely move crypto assets between the two. For example, by playing some blockchain games, you can earn tokens, which you can withdraw to your ghost wallet.
Then you can exchange these tokens for fiat currency (USD) by launching another DApp like Raydium. This is a decentralized exchange with which you can exchange tokens. Currently, the Phantom Wallet supports the following currencies: SOL, USDT, USDC, Raydium (RAY), Serum (SRM), as well as all other utility tokens launched with Solana DApps.
How to fund or withdraw money from Phantom Wallet
You may have noticed that we haven’t listed USD in the list of supported currencies. This is because you cannot trade tokens directly. This is the sole purpose of stable coins like USDT or USDT. They have the same value as in USD and are in fact symbolized fiat currency. In other words, stablecoins are the bridge between fiat and crypto.
Here is how this bridge works. Suppose you want to buy an NFT in Solana market, Solanart. There are many NFT collections available, but let’s pick one from Aurory, a new blockchain game.
To purchase an NFT, you must first fund your Phantom wallet.
- Create a crypto exchange account, such as FTX, Crypto.com, Gate.io, or Binance.
- Once verified, you can add funds (USD) through your bank account / credit / debit card to your account.
- When you add USD to a crypto exchange, use it to buy USDC stablecoin. The value will be equal minus the transaction fees.
- Now it’s time to send the purchased USDC to Phantom. First of all, you need to get the address of your ghost wallet by clicking on the ghost wallet icon in the upper right corner and then selecting Deposit.
- Then type USDC in the search bar to get the address of that specific crypto asset. Once typed, you will see the prompt in the first line. Click on it.
- And There you go. You will receive your Phantom wallet address in the form of a QR code and a hash (an alphanumeric string). Copy the hash.
- In your crypto exchange account where you purchased USDC, go to the send option and paste the copied address.
Depending on the crypto exchange account you are using, you will need to confirm the transaction by text or email. This is the last step in adding money to your Phantom wallet. Once received, you can then exchange USDC for any cryptocurrency supported by the wallet, such as SOL needed to purchase NFTs.
Likewise, if you want to withdraw money from the wallet, you must first exchange it for a stablecoin and send it to the crypto exchange, lock down where it could be converted back to fiat currency and withdrawn to your bank account. . Of course, the process would be reversed.
How to use SOL with Phantom Wallet
SOL is Solana’s native cryptocurrency, just like ETH is for Ethereum. You can use SOL on hundreds of DApps to create and sell NFTs, pay fees, and everything in between. In addition, you can also bet on SOL. What does this mean exactly?
Because Solana is a Proof of Stake (PoS) blockchain, it uses economic validators instead of miners (like with Bitcoin) to secure the network.
Therefore, when you freeze (gamble) your SOL funds, you are providing a valuable service. You receive rewards in the form of an interest rate in exchange, just like you would depositing money in a traditional bank. This is how decentralized blockchain networks work: they encourage and reward inclusion.
Staking SOL for passive earnings is very easy. Simply click on the SOL balance in your Phantom wallet, then click on “Start earning SOL”. Here, choose a validator and the amount you want to bet, and confirm the choice with the “Stake” button.
You can also try out the DApp Staking Tokens themselves. For example, the previously mentioned Aurory, a play-to-earn (P2E) metaverse game, has a very generous return on staking its AURY tokens, from 30% to 115% APR (annual percentage rate) for locked staking. The latter refers to making your funds unavailable for withdrawal for a specific period of time, which is why it earns so much more.
With the earned AURYs, you can then exchange them for USDC, send them to your crypto exchange account, convert them to USD, and return them to your bank account. Whether through P2E, trading or staking, the opportunities to earn income in the Solana ecosystem are endless.
Phantom makes it easier to use Solana
The Phantom wallet is your gateway to Solana’s DApps. If you’ve never used Ethereum with MetaMask, you can count yourself spared. The difference in transaction fees is quite drastic: $ 0.000025 per Solana transaction versus hundreds of dollars on Ethereum.
Ethereum’s transaction fees are very likely to change in the future as the network completes its ETH 2.0 upgrade. Whatever happens, Solana is a heavily funded project with a market cap of $ 55.7 billion and plenty of use cases provided by its DApps. Therefore, if you are into Cryptos, Metaverse, P2E, and NFT, Phantom is a must-have wallet.
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