In this guide, we will show you how to set up your first Solana wallet and make your first DeFi transaction.
We will use the Solflare wallet for this guide. It is a major Solana wallet. There are many other great wallets as well like Phantom, Backpack, etc.. The basic setup steps remain the same for all the wallets.
For our DeFi interaction, we will use Marinade Finance to stake Solana. More on what is staking later in the guide. For now, just think of it as creating a fixed deposit in your bank account.
TL;DR Steps
Step 1 - Setting up the wallet
Download Solflare app
Click on “Create new wallet”
Save the Recovery Phrase/Seed Phrase
Step 2 - Add some SOL
Option 1: Using “Buy” option
Buy using Credit card, Debit card or Bank transfer)
Option 2: Using “Receive” option
Receive from a Centralized exchange like Coinbase or from another person who is selling their tokens
Step 3 (Optional) - Send funds
Click on “Send” button
Enter their Public address (Just like you have a public address, they also have their address)
Enter the amount you want to send and click on Continue
Slide to Approve/Confirm the transaction
Step 4 - On-chain Action
Open the Browser inside Solflare wallet
Click on “Connect wallet” button on the Marinade homepage
Click on “Connect”
Click on “Start earning SOL now!” button
Enter the amount of SOL you want to stake
Approve the Transaction
Before starting with the detailed guide, let us first understand what a crypto wallet is.
Concept Time: What is a Crypto Wallet?
Think of wallet as an online banking app which lets you manage and access your money.
The online app doesn’t hold the money directly. But it provides the required information to use the funds in your bank account. Similarly, the wallet also doesn’t store the crypto tokens in them but lets you access the tokens.
Step 1 - Setting up the wallet
Follow the below steps to download the wallet and set it up.
Steps:
Download Solflare app. Links
Click on “Create new wallet”
Save the Recovery Phrase/Seed Phrase
Your wallet is all set now! In the next step, we will see how to add some tokens into your wallet.
But before adding tokens let us understand what is a Recover Phrase/Seed Phrase.
Concept Time: What is a Recovery Phrase/Seed Phrase?
Think of it as the master recovery password sheet of your online bank app. The Seed phrase lets you restore your wallet in case you forget the password or PIN.
If you lose your seed phrase then you lose access to your wallet. This is the most important element in the safekeeping of your crypto assets. There is no other way to recover your wallet if you lose the seed phrase. So keep it safe somewhere and ensure that no one gets access to it. Whoever knows your seed phrase can restore your wallet and access your tokens.
Step 2 - Add some SOL
Now let us add some funds into the wallet. There are 2 ways you can add funds:
Option 1: Using “Buy” option
Option 2: Using “Receive” option
Option 1: Using “Buy” option
This option uses a Fiat-to-Crypto On-Ramp Service. It lets you buy crypto directly with fiat money (like USD, EUR, etc.) to buy crypto like SOL or USDC and many more.
With players like MoonPay, AlchemyPay and others you can use your debit card, credit card, or bank transfer method to buy crypto. The best part is that this comes built in almost all the major wallets.
Steps:
Click on “Buy”
Enter the Amount
Select the currency you want to spend (Fiat) and the token you want to buy (Crypto)
Click on “Buy USDC”
Pay using your Credit card, Debit card or Bank transfer
Option 2: Using the Receive option
Buy crypto through a Centralized exchange or from a P2P seller and send it to your wallet.
Steps:
Click on “Receive”
Copy or Share “Your address”
Using this public address you can send funds from
Centralized Exchanges - You can add funds to exchanges like Coinbase, Binance, OKX, etc., do your KYC and then send the funds to your wallet using the public address
P2P - You can ask for crypto from someone who is selling their crypto to send tokens to your public address and you can pay them in Fiat. (Ensure that you are dealing with a trusted seller with KYC done)
After you have bought few $ worth of SOL using your preferred payment mode, you will be able to see the token in your wallet.
But what does “Your address” signify?
Concept Time: What is a Public address?
Your address is the public address of your wallet. Think of your public address as your bank account number. You can share it with others and they can send money to that address. As the name suggests it is public. But just by knowing the bank account number anyone cannot access your money, they can only send. Similarly, anyone can send fund to your wallet using your public address but cannot withdraw anything from your wallet. (They can access the wallet only with the seed phrase, so be careful and never share your seed phrase with anyone)
Step 3 (Optional) - Send funds
Now say you want to send some SOL to a friend. Let us see the steps to send SOL to a different wallet.
Steps:
Click on “Send” button
Enter their Public address (Just like you have a public address, they also have their address)
Enter the amount you want to send and click on Continue
Slide to Approve/Confirm the transaction
Great going! You have completed the setup of your wallet and purchased your first crypto as well.
Step 4 - On-chain Action
Now we will see how to use a DeFi app using the SOL in your wallet.
We will be interacting with Marinade Finance using the Solflare wallet. Marinade is an automated staking platform which gives you great rewards for staking. The action we will be doing is liquid staking the SOL in your wallet.
Before getting started let’s understand a bit about the action to be performed.
Concept Time: What is staking?
Think of staking as creating a fixed deposit in the bank. The money is locked for a specific time with the bank. You earn interest by letting the bank use your funds during that period. In the crypto world, staking helps in keeping the network secure. And you get rewarded for locking your tokens.
There are 2 types of staking
Native staking: Think of it as locking your funds in a fixed deposit and no access till maturity
Liquid staking: Think of it as locking your funds in a fixed deposit but get a spendable receipt
The difference of liquid staking from native staking is that you can use the receipt as a substitute for actual money deposited. The receipt can be used to make transactions elsewhere. The deposited money will continue to accrue rewards.
For this guide, we will stake some SOL with the Liquid staking method.
Steps:
Open the Browser inside Solflare wallet
Click on “Connect wallet” button on the Marinade homepage
Click on “Connect”
Click on “Start earning SOL now!” button
After you have connected your wallet with Marinade you can stake your SOL.
Steps:
Enter the amount of SOL you want to stake
Approve the Transaction
Now your selected amount of SOL is successfully staked.
Because we selected the liquid staking method, when you go back to your wallet tab, you will see the liquid staked SOL (mSOL)
Congratulations!
You have taken your first steps in the world of crypto by setting up your wallet, adding funds to it and doing your first app interaction.
Just a few things to keep in mind.
More Control = More Responsibility
Store your seed phrase safely
No customer service for mistakes
Double-check all transactions
Start small and learn
This guide is not financial advice and is only for education purposes. Please double check the links in the guide before doing any transactions.
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