How to Use Uniswap & PancakeSwap (DEX Guide)

Hey, it’s Lanzo 👋
If you’ve ever wanted to buy a new token before it hits big centralized exchanges, you’ve probably heard the same answer:

“Just use Uniswap.”
“Just buy it on PancakeSwap.”

Cool. But how exactly?

In this guide, you’ll learn:

• What decentralized exchanges (DEXes) are and how they differ from CEXes
• How Uniswap (Ethereum) and PancakeSwap (BNB Chain) actually work
• Step-by-step: how to swap tokens safely on both
• How to avoid fake tokens, rugs, and crazy slippage
• Basics of liquidity pools, LP tokens, and impermanent loss

Let’s turn those confusing swap screens into something you actually understand 👇

What Is a DEX? (And How It Differs from a CEX) 🧩

A decentralized exchange (DEX) lets you trade directly from your own wallet, without giving custody of your funds to an exchange.
No account, no email, no KYC — just your wallet and a smart contract.

On a centralized exchange (CEX) like Bybit or Binance:

• You deposit funds to the exchange
• The exchange holds your coins in its wallets
• Orders are matched in an internal order book

On a DEX like Uniswap or PancakeSwap:

• You keep coins in your wallet (MetaMask, Trust Wallet, Ledger, etc.)
• Trades happen through smart contracts
• Prices are set by liquidity pools, not an order book

Related: What is a Centralized Exchange (CEX)?

Both have their place. CEXes are great for on-ramping, spot trading, and derivatives.
DEXes are great for new tokens, DeFi, and self-custody.

Automated Market Makers & Liquidity Pools 🌊

Uniswap and PancakeSwap are called AMMs — Automated Market Makers.
Instead of matching buyers and sellers, they use liquidity pools: big token pairs provided by users.

Example:

• A pool might have 50% ETH and 50% USDC in value
• When you swap ETH → USDC, you’re trading against that pool
• The price moves based on the pool’s balance (the x·y=k formula)

Liquidity providers (LPs) earn trading fees from each swap.

Networks: Ethereum vs BNB Chain (Where These DEXes Live) 🌐

• Uniswap mainly runs on Ethereum, but also on other chains (Arbitrum, Optimism, Polygon, etc.).
• PancakeSwap started on BNB Smart Chain (BSC) and later expanded to other chains.

The key difference for you:

• On Uniswap (Ethereum) you pay gas in ETH
• On PancakeSwap (BNB Chain) you pay gas in BNB

So before you trade, you must:

1. Have the correct network selected in your wallet
2. Have a bit of ETH or BNB in that wallet to pay gas fees

Step 1: Set Up Your Wallet 🔐

You can use many wallets, but the most common combo is:

• Browser: MetaMask + Ledger Nano Gen5
• Mobile: Trust Wallet, Rabby Wallet, or MetaMask mobile

Basic setup:

1. Install a wallet (e.g. MetaMask extension).
2. Create a new wallet or import an existing one with your seed phrase (never share this with anyone).
3. Write the seed phrase on paper/steel — not in screenshots or cloud notes.
4. (Optional but recommended) Connect a Ledger Nano Gen5 and use it with MetaMask for extra protection.

Step 2: Fund Your Wallet 💸

You basically have two main flows:

CEX → Wallet → DEX

• Buy ETH or BNB on a CEX like Bybit
• Withdraw to your own wallet (Ethereum or BNB Chain address)
• Use Uniswap or PancakeSwap to swap into other tokens

On-ramp directly to wallet

• Use a fiat on-ramp that sends coins straight to your wallet
• Then trade on the DEX

For most beginners, the first route is easier.

Step 3: Connect Wallet to Uniswap 🔗

1. Go to uniswap.org and click the official app link (usually app.uniswap.org).
2. Click “Connect Wallet” in the top-right.
3. Choose MetaMask (or your wallet option).
4. Approve the connection in your wallet popup.

You should now see your wallet address in the top-right corner and your ETH balance.

Step 4: Make Your First Swap on Uniswap 🔄

Let’s say you want to swap ETH → USDC.

In the swap interface, choose:

• From: ETH
• To: USDC

Enter the amount of ETH you want to swap (or click “Max”, but always leave a tiny bit for gas).
Uniswap will show:

• Estimated amount of USDC
• Price impact
• Trading fee and route

Check slippage tolerance (gear icon):

• For stable pairs and big pools: ~0.1–0.5%
• For volatile meme coins: sometimes 1–3% (or more, if contract is nasty)

Click “Swap” → confirm in the Uniswap UI → confirm in your wallet.

Wait a few seconds to a minute — the transaction will appear in your wallet once confirmed.

Step 5: How to Use PancakeSwap on BNB Chain 🥞

PancakeSwap on BNB Chain is very similar — just different network and gas token.

1. Add BNB Chain to MetaMask (if needed)

If MetaMask doesn’t have BNB Smart Chain:

• Click network dropdown → “Add network”
• Add BNB Smart Chain RPC (you can get it from docs, but many wallets now add it automatically with a single click from PancakeSwap itself)

2. Get BNB for Gas

• Buy BNB on a CEX like Bybit
• Withdraw to your BNB Smart Chain (BEP-20) address (same MetaMask address, but network = BSC)

Always make sure you withdraw to the correct network (BEP-20 / BSC, not BEP-2 or ERC-20).

3. Connect Wallet to PancakeSwap

1. Go to pancakeswap.finance
2. Open the “Swap” page
3. Click “Connect Wallet”, pick MetaMask or your wallet
4. Approve in the wallet popup

4. Swap on PancakeSwap

It’s the same logic as Uniswap:

• Choose From: BNB (or another token you have)
• Choose To: the token you want
• Set your amount and slippage
• Confirm the swap + wallet transaction

Fees on BNB Chain are usually much lower than on Ethereum mainnet, which is why a lot of smaller traders prefer PancakeSwap.

Avoiding Fake Tokens & Honeypots 🧨

On DEXes anyone can list a token — that’s the power and the danger.

Basic safety checklist:

Contract address:

• Get it from the official project website or a trusted source like CoinGecko.
• Paste the contract into Uniswap/PancakeSwap, not just the token name.

Liquidity lock & history:

• Check on a block explorer or tools like Dexscreener / GeckoTerminal.
• Very low or fresh liquidity can be a red flag.

Honeypots:

• Some tokens allow buys but block sells.
• Use a “honeypot checker” or test with a tiny amount first.

Slippage, Price Impact & Front-Running 📊

Three things that hurt DEX traders the most:

1. Slippage – the difference between the price you expect and the price you actually get
2. Price impact – how much your trade moves the market inside the pool
3. Front-running / MEV – bots re-ordering your transaction for profit

How to reduce damage:

• Trade in larger, more liquid pools
• Avoid buying thinly traded meme coins with big orders
• Keep slippage as low as possible while still allowing your transaction to go through
• For big swaps, break them into smaller pieces

Related: How to Read Order Books & Market Depth (Crypto Trading Explained)

Adding Liquidity: LP Tokens & Impermanent Loss 🧮

Both Uniswap and PancakeSwap let you provide liquidity to earn trading fees.

High-level flow:

1. Choose a pair (e.g. ETH–USDC or BNB–BUSD)
2. Deposit equal value of both tokens into the pool
3. Receive LP tokens that represent your share
4. Earn a percentage of each trade as fees

But: you’re exposed to impermanent loss — if one token moves a lot in price vs the other, your final balance can be less than just holding.

When to Use a DEX vs a CEX ⚖️

Use a DEX when:

• You want early access to new tokens
• You prefer self-custody
• You’re interacting with DeFi protocols (staking, farming, lending)
• You’re comfortable paying gas and managing your own wallet

Use a CEX when:

• You’re buying crypto with fiat
• You want simpler UX and proper order books
• You’re trading futures, options, or margin
• You want deep liquidity on majors (BTC, ETH, XRP, etc.)

The smart move? Learn how to use both.
CEX for on-ramp + majors, DEX for DeFi and long-tail tokens.

Extra Tools That Make DEX Life Easier 🧰

• Dexscreener / GeckoTerminal – live charts for DEX pairs
• Etherscan / BscScan – see token holders, contract code, and transactions
• TradingView – draw levels and plan trades, even if you execute them on Uniswap/PancakeSwap
• Portfolio trackers – help you see all your DeFi positions in one place

Combine DEX data with proper TA and risk management for much better decisions — not just FOMO clicks.

Secure & Level Up Your DEX Trading Setup 🔒

⚠️ This post is for educational purposes only and does not constitute financial advice.
(This post contains affiliate links — supporting Lanzo at no extra cost to you.)