With the power of the blockchain technology, especially Ethereum’s ERC20 token standard, it’s very easy to create new tokens today. Currently there are 96k Ethereum token contracts, many of which are created by ICOs or other blockchain projects. More and more people have acquired some tokens, either from trades at exchanges or from token sales and token airdrops.
However, there’s one problem: most new tokens, including the vast majority of tokens from ICOs, are not listed on any cryptocurrency exchanges. Therefore, it’s very hard (or almost impossible) to trade them. You could hope your newly acquired tokens eventually get listed on an exchange, but what if you can’t wait till that day and want to trade it right now?
It used to be very hard to trade unlisted tokens. But with the newly developed decentralized exchange (DEX) technology, it has become easier. In this article, we will talk about how to trade (buy or sell) any Ethereum ERC20 tokens using LedgerDex.
LedgerDex is a brand new crypto token manager and decentralized exchange that allows users to manage and trade any ERC20 tokens. It’s built on top of the 0x Protocol, which is an open-source protocol to facilitate wallet-to-wallet token exchanges and been used by many DEXs today.
How to Use LedgerDex to Trade Any ERC20 Tokens
To use LedgerDex, you need to have an Ethereum account and install the MetaMask browser extension to manage your wallet.
To get started, you can visit LedgerDex.com and click on the “Open App” button or go to LedgerDex’s web app directly. At LedgerDex, you don’t need to register an account or disclose any personal info (not even your email address). Just use MetaMask to sign a login message and you can start trading.
Once you have logged in, you will see the “My Tokens” page, a place to keep track of your tokens. There’re some tokens already listed there but you can feel free to delete them and add new ones.
Let’s say you have recently acquired a new token, which is not listed on any exchange yet and you want to sell it at LedgerDex. Below are the steps:
Click on the big green button with a plus sign to add a new token.
You will see a popup window to let you add new tokens either by selecting from a list or doing a token search. If your token is not on the selection list, you should click on the “Search Tokens to Add” tab:
Enter the Ethereum address (For Start Waves Coin: “0x6c9D9D1e1f6ceC71d94abfAe45A62Bc6D30379ED” ) for your token in the input box and click on “Search Token”:
After your token is found, confirm the token information is correct (very important!). Click on the checkbox to confirm it and click on the “Add Token” button.
Now you can see the new token has been added to your token list with your balance showing. You can click on the “Sell” dropdown button to search for orders that are selling this token, or the “Buy” dropdown button to search for orders that are buying this token. If you click on the ‘Actions” dropdown button, you can find links to create buy order or sell order for this token.
Let’s say you want to create a sell order for your token. To do so, you need to complete an additional step called “setting allowance”, which is to give the smart contract permission to trade your token on your behalf. Please note that setting token allowance is not sending your token to the DEX or to the smart contract. Your token is not locked or moved away and is still fully under your control. You are just granting permission to the smart contract and that permission can be removed at any time by removing the allowance. To set allowance for the token, click on the little switch to the right of your token balance:
A new popup will appear. Click on the “Set Allowance” button:
Setting allowance will happen as an Ethereum transaction and you need to use your MetaMask to approve it. This step will cost you a small gas fee:
After the transaction is submitted, it might take some time to finish (depending the network speed and the amount of your paid gas fee). You don’t have to wait there. You can close that popup and check back later by refreshing your “My Tokens” page:
Once you see the allowance switch has turn green for your token, that means you have set allowance for that token successfully. Fortunately you only need to set allowance once for each token. It will be active from now on unless you decide to remove it. Now you can start selling your token. Click on the “Actions” drop-down button and then click on the “Sell [token symbol]” button.
You will then go to the “Create New Order” page, where you can fill in the order information. You can see the “Token to Sell” selection has already been populated with your token. Now you can select a token to buy.
Let’s assume you want to sell your token for some Ether. However, you won’t find Ether’s symbol “ETH” listed. Why? It turns out that Ether itself is not a ERC20 token (yet) and therefore for the time being we need to use an equivalent token called “WETH” (Wrapped Ether) for any trading involving ETH. WETH is always 1:1 to ETH. WETH can be converted back to ETH at a 1:1 ratio at any time in a process called “unwrapping”. In the same way, ETH can be converted to WETH at a 1:1 ratio at any time in a process called “wrapping”. You can do wrapping and unwrapping at your “My Tokens” page at any time. For now, let’s choose “WETH” as the token to buy:
Now you need to fill in the price to sell your token and the amount of your token to sell:
For “Who Call Fill This Order”, leave “Anybody” checked, as we want to open your order to the public, not to restrict it to a particular account. Then you need to choose an expiration time for your order. By setting that option, you can make sure your order will only be valid for a limit period of time. Use the date picker popup to select an expiration day (for example, two weeks from today):
Once every info needed has been filled in, click on the “Review Your Order” button:
Please review your order to make sure everything is correct. Then click on the “Submit Order” button:
Now you will see MetaMask popping up and asking you to sign your order. There won’t be any gas cost at this step. Go ahead and click the “Sign” button.
Finally, you will see a order confirmation screen, suggesting your order has been successfully created:
Now you can click on “View Your Order” to see your order details, which include status on whether it has been filled by anybody (see the “amount filled” field):
Hopefully somebody will find your order soon and then fill it. You can check your order status whenever you like by visiting the “My Orders” page and click on “View Order” for your order. You can also visit the “Trade History” page, which contains a list of your trades that has been executed.
That was it!
As you can see, LedgerDex allows users to buy and sell any ERC20 tokens, including tokens that are not listed on any exchange, for example, new ICO tokens and airdrop tokens etc. As LedgerDex is a decentralized exchange based on the open source 0x protocol, trading on LedgerDex is easy, secure and anonymous. There’s no need to open an account, no need to disclose your personal info, no need to send your token to the exchange, no need to lock your token for your trade.
Give it a try today!