Happy new year everyone, since a lot of folks are in lockdown again this year let's take a virtual holiday together around another crypto wallet. If you are interested in checking out the previous articles you can find them here:
So far most of the tours we've taken have focused on Multi-Coin wallets and ETH wallets, this time however we're going to take a little detour and head out into the wilderness to take a look at a wallet dedicated to something a little different. Today we're going to discover a Tezos (XTZ) chain dedicated wallet called Magma.
Magma is a non-custodial (personal) software wallet designed and built specifically for the Tezos blockchain and to give you a little flavour of what to expect here is a bit of info from their site.
The thing about interacting with the Tezos blockchain that most folks don't consider is that the programming language is considerably different from Solidarity (used on Ethereum). Indeed, Tezos is one of the few truly unique competitors for Ethereum in general being smart-contract based but without being a copy past of ETHs blockchain as with other competitors. The language used for Tezos (Michelson) is a little more complex than Solidarity but in some aspects is also more robust. Given that a lot of solutions out there focus on ERC20 tokens this is why we currently don't see a massive amount happening (on the surface) in the XTZ space. However, given that the current gas fees are prohibitively high on Ethereum, solutions offered by blockchains like Tezos are looking better by the day. It is also worth noting that in the background Tezos are working with governmental bodies to help further the implementation of digital stable currencies (link). Given this the day when folks switch may be here sooner than you think it would be good to be aware of your Tezos wallets now for when the DeFi options on the chain pick up some steam.
Setup and Main Screen
To start off lets look at the setup of the wallet and then the home screen.
- 1.) After downloading and installing you'll be offered two options:
- 1a.) Create a new wallet from scratch
- 1b.) Import and existing wallet (my favorite option!)
- 2.) If you choose to start a new wallet the first thing it will ask you to do is to save your seed phrase (store this is a safe location as there is no getting it back if you lose it)
- 3.) Alternatively, if you have a wallet already you can import it using another seed phrase. Down side here is it must be the phrase rather than just the private key.
- 1.) Once you've create the app you'll see a congratulations screen where you can go to the main wallet
- 2.) The main home screen is really quite esthetically pleasing and contains all the basic info you expect
- 2a.) In the middle of the screen we have the balance and relative fiat value
- 2b.) Then just above to the top right we have both the send an receive functionality
- 2c.) Down at the bottom of the screen we have a simple navigation pane where the wallet icon represents home screen
- 3.) If we click on the QR code (receive) symbol in the top right (section 2b) we're taken to the usual address/QC code and share functionality we've come to expect from all wallets.
As noted all sections are accessed from the navigation pane at the bottom of each screen. Let's take a look as the three main wallet functions (outside of the home screen and settings)
- 1.) The first section is the exchange. For this wallet the exchange functionality is build on Dexter the decentralized Tezos exchange (more about it at the end)
- 2.) Next-up we have an address book for our contacts we can store regularly used addresses here
- 3.) Finally, we have have a simple transaction tracking section.
As with all mobile wallets there are a few settings we can use to adjust the personal experience and security.
- 1.) The setting section covers a few main areas including (Staking/Baking, Security, About and then Other)
- 1a.) First off the staking interface is build right into the wallet (see 3 below for more details)
- 1b.) Next up the usual mnemonic phrase access as well as pin and face-id info
- 1c.) In the 'about' section we have the usual info like T&C as well as ways of contacting support
- 2.) Scrolling down the bottom section of the settings we see currency settings, chain information and the ability to reset the device (make sure you have your phrase before doing this)
- 3.) As noted in section 1 staking Tezos (aka Baking) is accessed through the Baker Delegation section. All you need to do is select a baker, from the list or enter the baker address manually and you're away.
Dexter (decentralized exchange)
As an added bonus I thought it would be good for us to take a quick look at Dexter, the swap solution implemented by Magma. The image below shows the basic Dexter interface accessed here: https://app.dexter.exchange/exchange
So the DEX/DeFi world is relatively new to the Tezos space so the DEX is relatively simple (but no less effective). I'll not go through the how-to connect but if you click on connect wallet you get a few options.
The exchange has the following trading pairs currently:
- XTZ (Tezos) - wXTZ (wrapped Tezos)
- XTZ (Tezos) - tzBTC (tez Bitcoin)
- XTZ (Tezos) - ETHtz (tez Ethereum)
- XTZ (Tezos) - USDtz (tez US Dollar)
In terms of volume the exchange has been doing great at the start of this year with consistently higher volume since the launch. Indeed, there was move volume of USDtz by the 4th of Jan than there was September, October or November.
If you add liquidity to the pools you also don't miss out on staking as the pools are staked as well.
One additional thing to note about the exchange (as the eagle-eyed of you may have already noticed) there are actually quite a lot of manual arbitrage opportunities on the platform due to the lower volume. Where as normally there would be trading bots doing this on uniswap we don't have that yet on Dexter so for example if you look at the XTZ-wXTZ pair. This should (ideally) be 1:1 but is currently around 1:1.27, this means if you swap XTZ for wXTZ you get around 27% more per XTZ (though a little less as you get closer to the balance due to slippage). You can always trade some and hold until the exchange levels off and volume increases some more then trade back at 1:1 and make a nice profit (more than just hodling and staking as well). Be careful with this though because it has been highlighted that XTZ-wXTZ is unlikely to reach a 1:1 ratio any time soon. Best to be careful with your trades. Consider the BTC/ETH pairs as well, these too often have buying gaps.
It is refreshing to look at wallets that are not just servicing the ETH blockchain and for Tezos this is definitely a great example of what is out there. The general navigation and esthetics of the wallet are smooth. I also like that they have built in a DEX so we're ready to go as this space/exchange volume increases over time.
As time goes on it would be good to have a direct link with other dAPPs when available, though I am sure this is something the creators are also considering. It is worth remembering that Tezos is a programmable blockchain, similar to ETH, so I wouldn't be surprised as the year goes on if we see more applications being created in this space. The move to include wrapped BTC/ETH/USD is great and the recent upgrade to the Tezos chain also puts transaction fees down at a very low level making it appealing.
Thanks for reading, hope you enjoyed the article, good luck y'all!