Welcome back to this mini-series. In this article I’ll be showing you how to use EtherDelta to trade.
The information provided here is for informational and entertainment purposes only. It should not be considered legal or financial advice. Complaining that something went wrong and you bought more than you can afford and you feel like I may be responsible, then consider this “Exhibit A”. Trade within your limits. Start small. Do not take risks.
In this segment I’m going to show you how to trade on EtherDelta. I will not provide a hyperlink to it as it is often subject to phishing style attacks when the URL is replaced, but the site looks the same – any deposits that you make on the impostor site will be lost forever.
You should manually type in https://etherdelta.com. ENSURING that https is present.
EtherDelta is a person to person trading smart contract exchange. In the simplest terms, you’re not trading with the exchange itself but directly to other people who are placing bids and making orders. Below is a screenshot of EtherDelta, but don’t be overwhelmed by the initial appearance of it if you’ve used it before. I’ll break it down a little…
Something to Remember on EtherDelta
EtherDelta is not a “traditional” exchange. EtherDelta implement a Smart Contract on the Ethereum Blockchain that is responsible for holding your funds in escrow. They cannot access it or manipulate it in any way, just like nobody can with any part of the distributed ledger that is a Blockchain. Until you wish to initiate a trade or withdrawal which is handled by your wallet and its signing of transactions, which is ultimately processed by the network as a whole, for the network.
- There’s no sign-up process, user names, passwords or confirming of email address or anything like what you may be traditionally used to.
- Your login credentials are the wallet that you’re using to trade and its private key.
- Its a totally trust-less system; meaning that there is no need to hope that once your funds are sent to the person you’re trading with is honest enough to deliver the goods.
- Their funds are also held by the smart contract and once the trade is finalised, the contract itself mediates the trade.
- It’s not particularly user friendly and it frequently goes offline due to user load and other factors.
EtherDelta’s strength lies in the trust-less nature of its design and the fact that, as long as you know the contract address of a given ERC-20 compatible token, you can trade it on this platform. No need to wait for it to be listed or risk it being de-listed if interest in it falls. A rare strength that no other exchange can match.
It Goes Like This
Lets do some pretend.
- You have some Ethereum and would like to trade it for some Dragonchain Tokens [DRGN](example); Dragonchain tokens are listed on ED [read: EtherDelta] in the drop-down, so you find it and select it. Now you’re in the “Market” of the ETH-DRGN pair.
- You have Ethereum in your MetaMask wallet and you’ve unlocked it using its password.
- Using the Balance field in the top left of ED you choose to deposit 0.5ETH – send and sign the transaction.
- Wait for confirmation
- Balance moves from the “Wallet” field to the “EtherDelta” field, showing that your 0.5ETH is now held by the Smart Contract.This is clever part, because even though you’re technically not the holder of it any more, only the wallet that put it there can move it anywhere again. You’re actually free to exit ED, close the browser and go to bed. When you return in the morning or a month later; provided that you maintain control of the wallet that put them there, they’ll still be there, ready for you to do as you please with them.
Trade them. Withdraw them. Whatever.
- Meanwhile, on the other side of this coin [pun intended], Joe Bloggs has done everything the same as you. The only difference being s/he has deposited DRGN to the contract and has signed that they want to trade them for a specific price.
- Using the Order Book, you find that specific price per coin acceptable, enter the amount you want to buy.
- Sign and Send the transaction in MetaMask to approve the movement of the Funds to them.
- Once the blockchain confirms the transaction as normal it sends them your ETH and you your DRGN.
- NO TRUST NEEDED.
Let’s Do First Things… First?
First thing you’ll be wanting to do after arriving is choosing which token you’re intending on trading.
I’m not going to tell you which one to pick because your fate is in your own hands. Just know that it is important that you verify that the coin you choose in the list is the correct coin that you want to trade. Check and verify the contract address for the coin. Multiple coins can share the same name and ticker symbol.
Clicking the token ticker name where it says “Make sure that [token ticker] is actually the token that you want to trade” in the Balances segment displays the contract address for you to check on EtherScan or by asking someone over at the token’s developer site. Many use Telegram (the 2018 messaging platform) including myself (come and say hi in the group)
In my case I’ll be choosing Key because that’s the token I wanted at the time which, in retrospect, later turned out to be a poor performance investment, but… I digress.
Be aware that Ethereum is required for trading here and it cannot be purchased with Fiat. This is an exchange purely for trading Cryptocurrencies.