On October 6, MetaMask, the Ethereum wallet and browser extension, launched a new feature supporting token swaps. According to the official announcement, the extension can now be used to trade between digital asset holdings and any token on a decentralized exchange within the user’s MetaMask wallet. The special feature has been introduced for Firefox users and will soon be added to Chrome too.
MetaMask is one of the best ways to introduce blockchain to a crypto newbie. This is because the user interacts with the blockchain using a browser that he is comfortable with. Given to this intuitive approach, MetaMask recently hit one million monthly active users. One of the best aspects of this browser extension is that it allows exploration of the dApps of the Ethereum blockchain with it. By introducing the token swap functionality, it has strengthened its stance for explosive adoption.
Big promises: Best price, fewer fees
According to Jacob Cantele, Head of Product for MetaMask, it had been sending users to decentralized exchanges or aggregators to get the best price. However, this approach meant that the users had to navigate multiple DEXs or DEX aggregators and were still unable to get optimal prices. To resolve this issue, MetaMask worked with the ConsenSys Codefi team to build a system that gets users the best price from aggregators and the DEX marketplaces.
Initially, MetaMask planned to bring a single DEX aggregator to the system. However, after testing, the team discovered that the price results across DEX aggregators varied substantially. That is when the team came up with the idea to build the “best price” functionality. According to Cantele, MetaMask reaches the best prices because it simultaneously aggregates most of the DEXs. On top of that, it uses varied methods to split orders across the DEXs.
For this feature, MetaMask will support some of the leading DEXs like Uniswap, Kyber, 0x API, 1inch.exchange, Airswap, and more.
The big picture
According to Cantele, the new MetaMask functionality will also help lower gas fees. He explains that while swapping, traders pay gas fees at every DEX. With this new feature, MetaMask will aggregate all DEXs and aggregators. Thus, the number of token approvals will be reduced. Effectively, the total gas fee will also go down.
Such a transparent system will fuel the efficiency of the Defi ecosystem. Primarily because the DeFi usage pressure on the Ethereum blockchain will lower. Effectively, the network congestion issues and gas fee surge episodes might also become a rare occurrence.
Effect on the industry
The MetaMask user base has quadrupled since 2019. The new MetaSwap feature will accelerate adoption further, and the DEXs and DEX aggregators may take a hit.
Firstly, the users will find it easy to swap their tokens right from their MetaSwap wallets. Secondly, the users would prefer a swap system where they get the best prices by paying the lowest fees.
However, we cannot ignore the fact that MetaMask is an online wallet and is not as secure as cold wallets to hold digital assets. Although MetaMask has not faced any major hacks to date, users need to stay alert.
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