Transitioning from CEX to DEX

In our other post, we covered the differences between a centralized exchange (CEX) like Binance, and a decentralized exchange (DEX) like Uniswap.

Most users begin their crypto journey on a CEX and later move to a DEX for more control over their assets, and doing so is a pivotal step in becoming well-versed in Web3.

Below we’ll cover some steps for getting started.

The transition typically involves:

  • Buying Crypto on a CEX: If you don’t already own crypto, a CEX provides an easy way to purchase BTC, ETH, or stablecoins using fiat. 
  • Buy Tokens for Gas: A transaction on a given blockchain network requires the network’s native coin to pay for a transaction (gas) fee. This would ETH on certain networks such as Ethereum or Base, SOL on Solana, BNB on Binance Smart Chain, and so on. We recommend you withdraw at least a few dollars worth of your network’s chosen asset. Base is a good network to test, so purchasing some ETH is a good start. For instance, if you wish to move $1,000 of USDC onto the blockchain, also move $5 of ETH to pay for transaction fees.
  • Withdrawing to a Self-Custodial Wallet: Move funds from the exchange to a non-custodial wallet like MetaMask, Trust Wallet, or Rabby Wallet. This would entail “withdrawing” funds from your centralized exchange, and sending them to your non-custodial wallet by copying and pasting its address. For instance, the following graphic shows how to send crypto from Coinbase to your wallet, by providing your crypto address.

Graphic: “Send crypto to” on Coinbase allows one to send crypto to their non-custodial wallet by inputting their wallet’s address.

  • Connecting to a DEX: Use the wallet to interact with a decentralized exchange like permissionless trading. We recommend Uniswap for those starting out. In the top right corner, click “Connect” which should prompt you to sign in on your chosen wallet (e.g. Metamask).

To get started trading on Uniswap, click “Connect” in the top right corner.

  1. Select Tokens and Swap: Select the token you wish to sell and the token you wish to buy. This will show you the relevant network gas fee and Uniswap’s 0.25% transaction fee. Click “Sign and Swap” and confirm it in your wallet to execute the transaction.

Graphic: The gas fee is less than one cent, though a 0.25% transaction fee is equal to $0.29.