Decentralized Trading Precautions

Sajjad Hussain
Jun 1 · 3 min read
Photo by Jason Briscoe on Unsplash

There are many decentralized exchanges worldwide offering trading services, some of them are well-known like Uniswap and some of them are unknown but in order to do profitable trading, one must understand the major pitfalls and operating procedures before diving into the trading experiences. Due to a lot of market fluctuation and scammers, you will be cheated by anyone if never learn before starting any decentralized crypto trade. It is strongly recommended that there are very few users who get rich due to decentralized trading therefore never bet too much on decentralizing trading.

  1. Always choose those exchanges which are famous, have many users as well as many coins listed on the exchange.
  2. You have to look at the liquidity pool of the exchange if the pool contains more than 100 ETH then look reliable and you have to careful here because many scammers display the pool as very wealthy and attractive, be cautious here.
  3. You have to be careful against the many counterfeit coins and air coins, you need to do a careful investigation of the background of the crypto project before buying the encrypted asset.
  4. The decentralized marketplace certainly makes you quickly rich, if you select the assets based on technology and financial relations then you always get a good result but the risk is always there.
  5. In order to do any decentralized trading, you must have a wallet, Metamask wallet is a good choice for the beginner level, after setting up the Metamask wallet on your system you need to connect with different networks to start trade, when your wallet properly set up on your system you can swap the altcoin with an altcoin, swap the altcoin with ETH coin and fundamentally always check the price before to start any exchange.
  6. Before going to buy any new coin you should first check the crypto coin followers, Twitter status, Telegram, or any other popular forum, furthermore the official website of the encrypted asset as well as the white paper of the project
  7. Your authorization is very important in order to complete the transaction, never authorize those transactions that offer you the fake tokens against your ETH
  8. Before doing any decentralized transaction you need to know the associated fees against the exchange of crypto asset, if you are exchanging the altcoin with another altcoin, it is often worth under 50 to 100 sister coin, you can’t set up a low fee because if the pending price will fluctuate then the crypto-asset price will collapse. Never make any transaction less than 0.5 ETH, any trade either swap or sell requires a fee, therefore, you need to consider 10% of profit to cover the cost of the transaction.
  9. If you think and found some altcoin a good strategy for earning, you should check the official website off the encrypted asset and check the contract, always copy the contract on decentralized exchange to find the corresponding coin.
  10. If your transaction takes more time then try to cancel the transaction by sending the 0 ETH, especially in MetaMask you can send the zero Ethereum from wallet A to B with handling fee higher in this manner the previous transaction is overwritten and equivalent to cancellation, if your existing wallet does not support the zero Ethereum transfer you can import your wallet to those wallets which supports the zero transfer.
  11. Finally, the centralized exchanges are easy to operate and always offer very low fees but in the case of unknown coins which simultaneously listed on both centralized and decentralized exchanges create huge confusion for traders over the actual price of the coin.

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