All you need to know about the exorbitant swap fee on MetaMask

In recent months, decentralized exchanges (DEXs) have seen widespread adoption, and MetaMask has joined the expanding crypto mix. MetaMask is a well-known wallet for storing and transacting cryptocurrencies that have attracted a large number of users due to its user-friendly interface and simple features.

MetaMask was introduced by Consensys in 2016 to facilitate access to decentralized applications, such as DEXs, online gambling platforms, and staking opportunities in DeFi (decentralized finance) environments. MetaMask is a digital wallet for storing cryptocurrency that is founded on the Ethereum blockchain and has a community of over 10 million active users.

What are swaps?

Crypto swaps refer to the exchange of one crypto for another crypto. This exchange is usually facilitated through a DEX or a centralized exchange (CEX) platform. The goal of crypto swaps is to enable users to trade between different cryptocurrencies quickly and easily without the need for traditional fiat currency.

Crypto swaps can be performed by placing an order on an exchange platform to buy or sell a particular crypto for another crypto. The exchange will then match different users’ buy and sell orders and execute the trade, exchanging the desired cryptocurrencies. The exchange will usually charge a fee for executing the trade, which can vary depending on the exchange and the size of the trade.

Crypto swaps have become popular as they provide an efficient way for users to diversify their crypto holdings or take advantage of market opportunities. However, it is important to note that trading cryptocurrencies can be risky, as the prices of cryptocurrencies can be highly volatile, and users should always do their research before making any trades.

Swapping on a DEX

A decentralized exchange (DEX) is governed by self-executing smart contracts rather than a central governing authority. DEX is a completely peer-to-peer (P2P) exchange, which means that users can exchange cryptocurrencies directly without an intermediary. The word “swap” is typically included in their name to determine whether a service qualifies as a DEX. Popular alternatives include SushiSwap, PancakeSwap, and Uniswap.

Swapping on a CEX

Central companies with centralized exchanges, such as Coinbase or Kraken, are considered owned or run platforms in some ways. They keep user transactions convenient by using these. However, several CEXs provide crypto-swapping services; they differentiate their goods mostly by the number of trading pairs they provide as well as their transaction charges. 

Because most consumers begin their crypto experience with a centralized exchange, the primary goal of developing them has been to be user-friendly. Your crypto may, however, remain under the exchange’s hands as part of a custody service.

MetaMask wallet creates an industry presence

MetaMask is one of the finest crypto wallets for communicating with the Ethereum blockchain network through browsers such as Firefox, Chrome, and Brave. It also provides access to ETH wallets via the mobile application. It operates with JavaScript by inserting a Web 3.0 object into the user’s platform. This procedure merely adds a function that enables access to the ETH platform.

MetaMask wallet has three primary uses: Swaps, dApp access, and storage. These operations comprise everything a typical cryptocurrency user would need to communicate with Ethereum.

Crypto Swaps with MetaMask

This feature incorporates data from DEX aggregators, DEXs, and Market Makers to ensure that each user receives the best price with the lowest network or gas fees. Unlike other digital wallets, MetaMask is designed with privacy as its top priority. The platform enables users to store, exchange, and access tokens without having to concern about exchanges and dApps accessing more private data than the user has authorized.

Does MetaMask charge fees on swaps?

All MetaMask transactions include a default gas cost based on the current activity of the ETH network. More activities necessitate higher standard gas expenses. Before payments are approved, the cost is also displayed on the MetaMask app.

To minimize excessive transaction expenses, wallets such as MetaMask include specific options through which users can increase the price and establish specified gas limitations. On the Ethereum network, high gas fees promote faster transaction times and vice versa. MetaMask wallet just announced its swap function, which enables for simple switching of Ether tokens for a wide range of ERC-20 tokens.

The wallet executes swaps by searching different DEXs for the best exchange fees and rates. However, keep in mind that MetaMask charges service fees ranging from 0.3% to 0.875% for this service.

The exorbitant swap fee on MetaMask can be attributed to network congestion, which occurs when too many transactions are waiting to be processed. When the network is congested, the nodes responsible for validating and confirming transactions will prioritize transactions with higher fees. This means that if you want your transaction to be processed quickly, you will need to pay a higher fee to incentivize the nodes to prioritize your transaction.