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How to use your Bitwala Wallet in DeFi

Emanuel Coen

almost 2 years ago ·

4 min read

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In today's tutorial we're going to show how Bitwala users can import their Bitwala Ethereum wallet into Metamask and experiment with DeFi protocols.

This tutorial highlights one of Ethereum’s coolest features: the high degree of standardization across different wallet implementations. Using your seed phrase you can seamlessly import/export your Ethereum account across different wallets and use your favourite feature in each wallet.

To compare this to the traditional world, it would be as if you could import your IBAN from Barclays to Bank of America and see the same account balance displayed in their app interface. Sounds too good to be true right? Not in the Ethereum world.

Bitwala is a highly respected crypto company offering users a Bitcoin + Ethereum wallet with a European Bank account and an integrated trading platform, allowing users to seamlessly convert their fiat to crypto and vice versa. However, the Bitwala app doesn’t have DeFi protocols natively integrated yet, meaning you can’t directly access many of the attractive yields available in DeFi.

So why not use Bitwala for its seamless fiat-to-crypto on-ramp, import the Bitwala Ethereum wallet into MetaMask and use Metamask for the wide access to DeFi protocols it provides? Let’s go!

Step 1: Setup your Bitwala Ethereum wallet

If you don't have a Bitwala wallet, it's time to get one. Using our link you get a €20 sign-up bonus after your first trade. If you already have one and have some Ether (ETH) you can skip Step1 and proceed to Step 2.

  1. Create and setup your Bitwala Account

  2. Setup Ethereum Wallet (write down and securely store the seedphrase)

  3. Buy Ether within Bitwala (ETH)

Step 2. Connect your Bitwala Ethereum wallet to a DeFi wallet (Metamask)

In order to interact with DeFi smart contracts, you will need to import your Bitwala Ethereum wallet into MetaMask. MetaMask is a web extension that allows you to interact with the Ethereum blockchain and manages the private keys to your Ethereum wallet in-browser.

  1. Visit MetaMask.io and click the ‘Get Extension’ button to install the extension.

  2. Instead of creating a new account choose the "Import wallet" option (screenshot below) metamask_bitwala.jpeg

  3. Enter the seed phrase of your Bitwala Ethereum wallet. Then make sure you place the seed phrase back into your secure storage.

  4. Select a password & agree to Metamask’s T&Cs

If you had any trouble in the process check out our full Metamask review. If not, you should see your Ether (ETH) balance in Metamask and you're ready to explore DeFi.

The rest of this tutorial will show you how to swap your Ether for the dollar stablecoin USDC using a decentralized exchange called Uniswap and how to then lend your USDC on Aave to earn interest.

Step 3: Swap Ether for USDC on Uniswap

Uniswap is a decentralized exchange on the Ethereum Blockchain. It is powered by smart contracts and runs completely autonomously. Anyone in the world can access it from their Ethereum wallet and buy any token available on the Ethereum Blockchain.

In order to earn interest on a stable cryptocurrency, let's convert our Ethereum into a USDC.

Screenshot 2020-09-17 at 15.14.16.jpg

  1. Visit the ETH-USDC trading pair on Uniswap

  2. Go to “Connect Wallet” at the top to connect your Metamask wallet with Uniswap

  3. Select the amount of ETH you want to swap

  4. Click on Swap

  5. Confirm the transaction on Metamask (it should open automatically)

Once you have confirmed the transaction you can lean back and wait until your transaction is confirmed. This can take more or less time, depending on how congested the Ethereum network is. You can also follow the status of your transaction in Metamask or click on the arrow icon in Metamask to see it on Etherscan for more granular information.

After the transaction is confirmed on the Blockchain you'll receive the USDC in your Metamask wallet. To see your USDC balance in Metamask you have to go to “Add Token” in the “Assets” tab and select USDC. Metamask only displays balances of Ethereum tokens after you add them manually to hide tokens that might have been sent to you without your consent.

Step 4: Earn passive income on USDC by lending on Aave

Aave is a Decentralized Finance (DeFi) protocol that enables users to lend and borrow a diverse range of cryptocurrencies. It works similar to a bank in that it manages loans and interest accounts on behalf of users. However, unlike a bank Aave is powered by smart contracts on the Ethereum Blockchain that automate the daily operations (interest rates, loan payouts etc.), governance and the development of the Aave protocol.

In a nutshell, lenders who want to earn interest, supply their assets to the Aave protocol and borrowers can borrow from that pool of assets given they provide sufficient collateral to secure their loan. This collateralization requirement ensures that loans are paid back and makes Aave safe to use.

Screenshot 2020-08-03 at 13.30 1 (1).png

  1. Visit https://app.aave.com/home

  2. Connect your MetaMask wallet

  3. Click on USDC (or whichever asset you wish to earn interest on), confirm the amount and sign the MetaMask transaction

Once you have deposited your assets you will start accruing interest and you’ll see your money growing in Aave’s dashboard. You can withdraw your assets at any time but to recoup the Ethereum network fees you paid worthwile, we recommend investing with a long-term mindset!

What did you think about your first DeFi adventure using Bitwala? Tag us on Twitter @cryptotesters or join our Telegram to discuss!

Emanuel Coen

almost 2 years ago ·

4 min read

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© 2021 cryptotesters UG

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We are a multi-faceted team of crypto enthusiasts based in Berlin.

© 2021 cryptotesters UG