Introduction to Decentralized Exchanges

What you’ll learn?

  • Overview of how to execute trades on decentralized exchanges across different blockchains, with a focus on Uniswap on Ethereum and Jupiter on Solana.
  • Decentralized exchanges use peer-to-peer liquidity pools rather than order books. You can generate returns by providing liquidity to these pools.
  • Walkthrough of executing a trade on Uniswap – connecting a wallet, selecting tokens to swap, examining slippage/price impact, confirming the transaction.
  • Explanation of gas costs on Ethereum and how they are higher than on layer 2 chains.
  • Importance of using a MEV-bot protector like Flashbots to avoid front-running when trading on Ethereum.
  • Overview of DEX aggregators like 1inch on Ethereum and Jupiter on Solana which optimize trades across liquidity sources.
  • Bridging assets across chains and on-ramp/off-ramp solutions integrated into some DEXes.
  • Perpetual futures trading on platforms like Drift on Solana.
  • Decentralized exchanges discussed are not compatible with trading Bitcoin NFTs like Ordinals – those require marketplaces like Magic Eden.

In summary, it provides an in-depth technical walkthrough of executing trades on leading Ethereum and Solana DEXes while explaining key concepts like liquidity pools, slippage, gas costs, MEV protection, and cross-chain bridging. It highlights similarities and differences between major platforms.

Content Chapters

0:01 Overview of onchain trading and decentralized exchanges
0:12 Uniswap – most established and successful DEX
1:00 How DEXes use peer-to-peer liquidity pools instead of order books
2:06 Connecting wallets to Uniswap (Metamask, Phantom, etc.)
3:55 Executing a trade on Uniswap – swapping assets, slippage, fees
6:23 Gas costs on Ethereum layer 1 vs layer 2 chains like Solana
7:31 Confirming a Uniswap transaction and viewing on Etherscan
9:40 Importance of using a MEV-bot protector on Ethereum
11:18 Setting up Flashbots MEV protection
12:45 Additional Uniswap features – limit orders, on/off ramps
13:30 Jupiter – Solana DEX aggregator (like 1inch on Ethereum)
14:28 Jupiter features – swaps, limit orders, dynamic averaging
15:24 Cross-chain bridging through Jupiter
16:31 Connecting wallet and executing trade on Jupiter
18:44 Jupiter’s smart routing to optimize trades across DEXes
20:15 Integrating other blockchains in Uniswap besides Ethereum
21:06 Drift – perpetual futures trading platform on Solana
21:59 Raydium DEX on Solana
23:41 Incompatibility of these DEXes with Bitcoin NFTs like Ordinals