If you've ever interacted with Ethereum's decentralized finance ecosystem or purchased digital assets, you've probably heard of MetaMask. But what exactly is MetaMask, and what's it used for?
The cryptocurrency market has exploded in popularity in recent years, driving investors to find the best technology to handle them. While cryptos can be held in the trading platforms they are purchased from, it's generally smart to move them to a wallet you have greater control over. Choosing a wallet can be difficult now that there are so many solid projects to pick from. MetaMask is the hot wallet that millions of people have chosen for its security, functionality and ease of use. Hot wallets are less secure than cold wallets because they are kept online and are more vulnerable to hacks.
Decentralized finance (DeFi) on the Ethereum blockchain provides MetaMask with its best use case. DeFi platforms provide a myriad of services such as lending and borrowing of cryptocurrencies, and MetaMask is often the easiest wallet to use with them. Most larger platforms support a few other wallets, but you won’t find a single wallet that is supported by as many projects as MetaMask. It's easy to connect your MetaMask with DeFi platforms, all you need to do is click connect wallet on its website, click MetaMask, and enter your password.
If you’re looking for a simple but powerful hot wallet supported by most DeFi platforms, MetaMask is probably your best choice to protect your crypto assets and connect to your preferred crypto exchanges.
What is MetaMask?
MetaMask is a free and widely used online wallet for the Ethereum and Binance smart chain (BSC) networks. It is available as an extension on Google Chrome, Mozilla Firefox, Brave and Microsoft Edge browsers. It also has an app on both iOS and Android phones. Both versions of MetaMask have all of the features a hot wallet needs and more. The platform has an innovative swap feature that searches 7 of the top cryptocurrency exchanges to get you the best rates on your trade. Users can also purchase Ethereum on MetaMask with a debit or credit card, although they are limited to small purchases.
Sending and receiving Ethereum (and BSC) tokens is incredibly easy with MetaMask. To send a transaction, click send in the app or browser extension, enter the receiving party’s Ethereum (or BSC if you’re sending tokens on its network) address, set the limit for gas fees and send! The gas fee for each transaction is paid in Ether (or BNB on BSC) and it is sent to miners to incentivize processing your transaction.
You will need to set it high enough so it's worth it for the miners to complete the transaction. Luckily, MetaMask gives you accurate gas estimates for fast, standard and slow speeds on most transactions. For most users, the best way to pay for gas is by using the estimates that MetaMask gives you.
Why Use MetaMask?
While hot wallets like MetaMask are not regarded as the absolute safest place to store your cryptocurrencies, they provide reasonable security and maximize ease of use. MetaMask is likely still preferable to storing your cryptocurrency in an exchange because it gives the user greater control of your portfolio. In centralized exchanges, the company has custody over your cryptos and the funds could be lost to successful cyberattacks. However, successful attacks are increasingly uncommon because most top exchanges employ strong security measures.
Completely offline cold wallets like the Ellipal Titan are the safest place to store cryptocurrencies, but they often aren’t as easy to use as MetaMask.
Interacting with DeFi platforms is MetaMask’s greatest strength. Nearly all DeFi projects on Ethereum (and many on BSC) support MetaMask and make it extremely easy to connect your wallet. The quotes for gas prices that the wallet offers for every transaction make the complex process of interacting with DeFi simple. However, you still need to make sure you are interacting with a trustworthy site because MetaMask can’t do the vetting for you.
MetaMask vs. Competitors
MetaMask is one of many popular hot wallets on the market, and it seems to be used the most among active DeFi users. One of its major competitors is Trust Wallet, which was acquired by Binance Exchange in July 2018. Trust Wallet prides itself on its security and tight integration with Binance Exchange.
Trust Wallet may be your best option if you are looking for a wallet focused on Binance Smart Chain tokens. It has a tab where you can buy crypto with a credit or debit card similar to MetaMask, but it offers a longer list of tokens to purchase than its counterpart. MetaMask is supported by more dApps than Trust Wallet and is more versatile because Trust Wallet is not available as a browser extension. Overall, each has their advantages and disadvantages, but MetaMask is often the better choice for beginners looking to explore the DeFi landscape, especially on Ethereum.
What is DeFi?
DeFi, or decentralized finance, is the burgeoning financial ecosystem on the Ethereum blockchain. Its main intention is to remove the unnecessary intermediary commonplace in financial services and replace it with open and auditable coded contracts. Thousands of decentralized applications (dApps) have sprung up on Ethereum to provide users with financial services for cryptocurrencies. You can lend, borrow, stake for interest and much more with cryptos on these platforms.
Crypto users (and mobile users alike) can invest in anything they like so long as they are registered on an exchange that supports your preferred tokens. Smart contracts make exchanges more efficient, and they also allow you to invest in a range of crypto projects with several different exchanges.
Mark Cuban, a star from the hit entrepreneurial-themed reality show Shark Tank, is an avid supporter of cryptocurrency and DeFi. He urges everyone to research the cryptocurrency market and the DeFi ecosystem. Because DeFi hasn’t been thoroughly regulated, be careful with newer platforms especially. Some projects have been hacked, losing their customers’ funds and others were made with only one purpose — to scam users of their cryptos.
How to Set Up MetaMask on Binance Smart Chain
It’s surprisingly easy to set up the Binance smart chain network on MetaMask. First, go to your MetaMask (on the app or browser extension) and click on “Settings.” Next, select “Networks” and then “Add Network.” Now just add the information below in the specified blanks, hit “Add” and you’re done.
When you want to switch between the Ethereum and BSC networks, just go into the Networks menu in the settings and select the one you want to use.
- Network Name: Smart Chain
- RPC Url: https://bsc-dataseed.binance.org/
- Chain ID: 56
- Symbol: BNB
- Block Explorer URL: https://bscscan.com
dApps you Should Use With MetaMask
In the electrifying new arena of financial services that is DeFi, there are a lot of amazing new platforms to check out. If you’re looking to get some of the best prices possible for crypto swaps, 1inch Exchange is a useful decentralized exchange (DEX) aggregation tool that searches the top exchanges to offer you the best prices. Some of the best DEX tools that 1inch checks include Uniswap (for Ethereum network) and PancakeSwap (for BSC).
If you want to borrow or lend out your cryptocurrencies, Aave and Compound Finance are among the most popular options. They each offer (relatively) stable and low-interest cryptocurrency borrowing that many users take advantage of to compound their gains in other DeFi platforms.
How to Fund Your MetaMask Wallet
There are a few methods that can be used to fund your wallet. You can simply use a credit or debit card on the buy tab in MetaMask, or you can send cryptocurrency purchased from an exchange. Some of the best exchanges that offer Ethereum and Binance smart chain tokens are Binance, Coinbase, eToro and Gemini. Make sure your MetaMask is set on the right network before sending any tokens over.
MetaMask was built originally for Ethereum and tokens on its network (ERC-20s) so it is set to the Ethereum network by default. Follow the guide above to learn how to add the Binance smart chain network to your MetaMask wallet. You must do this before sending Binance Coin (BNB) or any other tokens on the network (BEP-20s) or the tokens may be lost forever.
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Hot Wallets vs. Cold Wallets
Hot wallets like MetaMask and Trust Wallet are online to allow for easy transactions and interactions with DeFi platforms. Cold wallets, on the other hand, aren’t connected to the internet and thus can’t be hacked or accessed remotely. Many investors find the best strategy is to use both a cold wallet and a hot wallet for each of their strengths. The cold wallet would be used to store most of a user’s portfolio safely and the hot wallet would hold day-to-day cryptocurrencies and facilitate DeFi transactions. Some decentralized applications also support cold wallets, so hot wallets may not be necessary for those users.
Best Cold Wallet: Ellipal Titan
Hardware wallets (or cold wallets) have made massive strides in recent years with security, ease of use and general functionality. The Ellipal Titan is one of the best examples of this. It’s a sleek hardware wallet with a sensitive touch screen that looks almost like a smartphone. Unlike a smartphone, however, it is one of the most secure devices for storing cryptocurrencies. The wallet can never be connected to the internet, making it basically invulnerable to cyberattacks from afar. Instead, the Ellipal Titan uses public, offline and verifiable QR codes to send transactions.
Ellipal released a hot wallet app that can be linked to your Ellipal cold wallet to add even more features. It offers swap and exchange services that allow you to convert between cryptocurrencies to provide diverse investment options for users. The Ellipal Titan has to charge slightly more than some other top hardware wallets for its extra security and features and is normally priced at $169. However, right now it is $30 off so now is the best time to get one.
Is MetaMask Worth It?
Even though MetaMask is not the absolute safest wallet to store cryptocurrencies, it is vital for most investors at the forefront of DeFi. Many new DeFi platforms only support a shortlist of wallets and MetaMask always seems to be included. It doesn’t hurt to download the app or browser extension and sign up for an account. The wallet is completely free so there are no downsides to having an extra wallet. It could come in handy when exploring DeFi platforms or only sending and receiving cryptocurrencies.
Frequently Asked Questions
Can I buy Ethereum on MetaMask?
Ethereum can be easily purchased on MetaMask by clicking “add funds.” You can purchase the Ethereum with Apple pay or a debit card.
Are crypto assets safe?
Crypto assets can be safe, but you should use a secure software wallet like MetaMask to protect your assets. You might also use a cold storage wallet that you can keep offline.
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About Henry Stater
Henry is an expert in all things crypto. He stays up to date with all the latest coins, platforms and technologies in the field. He has particular expertise in the burgeoning decentralized finance ecosystem and loves trying out all the new platforms. He also always follows major events in other financial markets and geopolitics as a whole, especially when an event’s effects ripple through the crypto market.