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A crypto enthusiast’s first proper DEFI experience using the Polygon Network
Somehow, I did not explore much of DEFI when Binance Smart Chain became a buzz although I was getting very near it, learning to use the once scary hot wallet Metamask, changing the RPC custom network to Binance Smart Chain in Metamask and nitty-gritty’s like that.
Even that was a bit daunting for me, for to use the DEFI application all the cryptos have to be in a compatible version, meaning if I want to use ATOM coins in Binance Smart Chain aps it has to be a BEP-20 coin.
This means that I have to convert the crypto coins to BEP-20 version, for which I conjecture Binance Bridge can be used or the crypto should be withdrawn from Binance Exchange to Binance Smart Chain compatible Metamask wallet using the BSC network for any crypto coin to be converted to a BEP-20 crypto coin.
Only when the crypto is a BEP-20 coin will it be compatible with the Binance Smart Chain apps. This meant that to use the apps on Binance Smart Chain, I first had to have my cryptos converted to BEP-20 version, and this was a lot for me to do at that time to get started with DEFI on Binance Smart Chain.
Now, Binance Smart Chain has lost its earlier allure as its Centralised
My motivation to explore DEFI in Binance Smart Chain has dwindled because of talks that Binance Smart Chian is actually CEFI, it’s not decentralised as all the validators of Binance Smart Chain are controlled by Binance that has a majority stake of BNB coins anyway. Plus, there was news on Binance Smart Chain ecosystem having apps that are an exact copy of good Ethereum Apps.
I have learnt that buying Matic from the Binance Exchange and sending it to the Metamask wallet is costly, with withdrawal fees being 14 Matic, that’s about 14 $, that is more than Rs 1000 , which is a lot for me, but I did it anyway. However, in hindsight, I could have avoided this, by just filling my Ethereum compatible Metamask with ETH and using a swap app like 1inch to swap ETH to Matic.
I don’t know if it would have worked because of my disappointing experience of using OpenOcean to swap some ETH to Matic. My transaction never went through, it failed, however the gas fees I spent for the transaction that day was 10 Gwei. I got the message that those fees won’t get refunded as they are the computing charges charged by the Ethereum Network. Sucks… I lost 17 $ trying to swap using this OpenOcean app and they all failed because gas spent for the transaction was not enough.
I have heard about OpenSea, (which I suppose is this OpenOcean app) being a Dex Agreegator aggregating liquidity of Ethereum DEFI exchanges(DEXs). It’s told that OpenOcean can execute a swap providing the best match for the lowest fees. Well I felt all this was bogus. Why did not that OpenOcean charge me enough gas fees that are required to pass that Ethereum transaction?. I am definitely no fan of this OpenOcean app.
However, in hindsight, I could have avoided that unnecessary ETH crypto loss by having custom adjusted the gas fees to a higher amount, instead of trusting that OpenOcean protocol. One can reference ETH’s gas information from - https://etherscan.io/gastracker or https://ethgasstation.info/ , then adjust the gas fees a little above the high or ASAP limit, because trust me otherwise the ETH transaction will fail and you will bear the gas fees for no useful purpose.
So, I explored another way to procure more Matic the DEFI way. I transferred more ETH from Ethereum to Polygon using the Polygon bridge so that I can use the 1inch app under Polygon Network and get Matic by swapping ETH. Since it was a Sunday the Ethereum fees for transferring ETH from the Ethereum Metamask wallet to Polygon was very low, like 2$.
From there I went to 1inch and opted for the Polygon Network. Here, like a charm I swapped ETH to Matic with low fees since it’s the Polygon Network. I had no hassles of needing to worry about fee adjustments to get my transaction through. 1inch is definitely a DEFI platform that gave me a good DEFI experience and I plan to explore more of it in the coming times.
However, I did more DEFI stuff other than this swapping activity. I went to AAVE Market under Polygon Network and deposited my ETH and Matic that was there in my Polygon wallet. It’s pretty cool because I will be earning some interest for depositing these assets.
DEFI is cool as a alternate way to do crypto trading activities than just using CEX
All in all it’s still very exciting that I can swap cryptos in DEFI and trade without using centralised Exchanges. Further, I can also deposit my crypto assets to earn interest which is what they call earning passive income on your idly lying crypto assets.
I have been itching to explore this buzzing use case of Blockchain for at least a year, so this has been an interesting experience.