Buying and selling Plutus Rewards [PLU] using DeFi: Entering the rabbit hole.

TigerLionFox

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9 min read

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Jun 11

11

• Introduction
• Uniswap
• MetaMask Swap
• DefiLlama — Meta DEX Aggregator
• Going gasless — high gas fees or no swapping without having ETH
• 1inch Fusion
• Matcha Auto
• Conclusion

Let me first start with what this guide is not. This will not detail how to sell your PLU to fiat on an exchange [currently Kucoin, Coinbase and Bitfinex being the most popular at the time of writing]. To do this, you would need to withdraw to your Ethereum wallet and then use ETH as gas to send to your favourite exchange. You could also look into Withdrawing Plutus rewards [PLU] directly to an exchange, a guide I wrote which cuts out a step and saves you a few dollars.

So, what is this page for? I am a blockchain maximalist and I want you, sir, or m’lady, to break away from the shackles of a bank [yes, an exchange is a bank of sorts], and take custody of your own funds! Go bankless! If you have earned some PLU, this could be your opportunity to withdraw it to your wallet and then go have some fun with stablecoins and ETH on the Ethereum blockchain. Perhaps you may then spend those stablecoins on another token, stake them or use your ETH to go yield farm somewhere. Who knows! The possibilities are endless.

TLDR: Here are a few ways you can swap PLU for other tokens on Ethereum using DeFi, starting with the basics and moving on to some more fun strategies that the Plutus community should know about.

Uniswap — https://app.uniswap.org/#/swap

You’ve likely heard of Uniswap (a DEX — Decentralised Exchange) and this is currently the core of swapping PLU on chain. In fact, Uniswap is technically the only place you swap your PLU. There are currently two pools (V2 and V3). Friendly folks put their own PLU and ETH into a pool and this allows us all to swap it. The price is determined by Uniswap’s oracles, which take price data from the internet (other exchanges, CoinGecko, CoinMarketCap, Trading View etc) and bring it on chain. V2 pools have slightly less fees however V3 pools offer greater liquidity depth concentrated around market mid-prices, which means less slippage for traders. You simply head over to https://app.uniswap.org/#/swap , connect your wallet of choice, approve PLU and swap! The best thing is, you don’t have to just swap PLU for ETH, you can use multiple to pools to swap PLU to anything you like such as USDC or your favourite meme coin! This is all done for you in a clever, automated way.

You did it! You just ‘defi’ed’. Well done! But… what if I told you that naughty bots are watching you make this request, and if the request is large enough, the bot will put their transaction ahead of yours in the queue, drive the price up, sell to YOU and then net the profit? This is called an MEV bot, and they are always looking to make some money off noobs. Are you a noob? Of course not, so this is why we use a DEX aggregator to avoid this front-running dilemma. Many DEX solutions offer ‘MEV protection’ (OR review https://chainlist.org/ to ensure that the RPC server you use in your wallet extension is able to protect you from being front-run. I like https://rpc.flashbots.net). Technicals aside, all the options below still use these same Uniswap pools, but with additional benefits that I have listed below.

TLDR!
Pros: Easy. Well known. Direct interaction with pools.

Cons: MEV sandwich attacks/frontrunning. Possibly more gas intensive. Need ETH for gas.

MetaMask Swap (Found in your MetaMask wallet)

You are likely using MetaMask to interact with the Ethereum chain. Well, lucky ducky, Metamask have built their own DEX aggregator inside the wallet browser extension! a DEX aggregator is just a fancy way of saying that they will find the quickest and cheapest route to perform your swap for you. Think of it like a quick google search through the different possible tunnels and then telling you which tunnel is the cheapest to use. Great! In short, MetaMask swap does EXACTLY the same thing. But what many do not realise is that there is a convenience tax. This is a service charge fee of 0.875%, which is automatically factored into each quote. Why should you pay a little extra when many places do this for free? If you’re ready, let’s go further down the rabbit hole.

TLDR!
Pros: Fewer approvals. MEV/slippage protection. Most gas-efficient route.

Cons: 0.875% service fee. Need ETH for gas.

DefiLlama — https://swap.defillama.com/

Here is where we start to get into why I wrote this article. Imagine a method of checking not just every tunnel/route but also every DEX aggregator too. A search of all the tunnel searchers. Welcome to DefiLlama’s Meta DEX aggregator!

I believe this also will take into consideration which DEX you have given approvals to aswell, prioritising the one you have used before if it will save you from having to spend ETH to approve PLU on another DEX.

We can see from the screenshot that I am going to get $2 more from using Matcha instead of 1inch this time (two of my favourite DEX choices). The additional benefit here is that the swap itself happens on the DEX, DefiLlama is simply just pointing you in the right direction.

Again, you could swap PLU for a stable coin such as USDT, USDC, or your favourite meme coin should you want to. Congratulations, you’ve just saved yourself a few dollars, and with almost no effort.

TLDR!
Pros: A Meta-DEX aggregator to find you the absolute best price. Great!

Cons: Need ETH for gas.

Moving beyond gas fees… Utilising 1inch Fusion or Matcha Auto.

I would suggest you stick to the DeFi options above to buy or sell your PLU however you may have noticed a con with each option. You will always need ETH to use as gas in order to use the Ethereum blockchain. As I am sure you are aware, gas can sometimes get extremely high OR you may be new to crypto, withdrew your PLU but have no ETH to use.

Go check out the GWEI now to see how high gas fees are: https://etherscan.io/gastracker — When gwei (gas) reaches 50–100+, the strategies above are rendered useless, or at the very least, expensive.

To address this, I will offer two more, cool little strategies below. Whilst the next two options below may be more advanced, these are two options that you can use to enjoy the benefits of keeping custody of your tokens WITHOUT spending lots of ETH on gas.

Please note. These are NOT the most cost effective methods of buying and selling PLU on chain. These very often cost more, as I will explain below HOWEVER there are situations (high gas fees or no ETH in your wallet) where these could help. Plus they are quite fun to play with on your journey to going bankless.

1inch Fusion — https://app.1inch.io/#/1/simple/swap/PLU/ETH

The best way to explain this is that there are 1inch ‘resolvers’ who are sat around waiting to execute your trade/swap for you. They are ready to go, but they will only do it if it is profitable for them too. You can’t expect them to work for free! This is done through a Dutch Auction, basically the amount you get in return for your SWAP goes down (making the swap more lucrative for the resolver) until one of the resolvers agree to do it. Whilst this has huge benefits such as the resolver taking on the gas fees, it also has the drawback of getting a worse price for your PLU.

1. Head over to 1inch.io (dex aggregator) and open the dApp.
2. Buy/Sell PLU for ETH (or any token of your choice).
3. Ensure you are on the SWAP tab and you have selected 1inch Fusion (This will use their fusion feature which avoids gas fees).

4. Check the settings and parameters of the swap (including price difference percentage.

To summarise, this is a way to swap your PLU for another token WITHOUT having to send it to an exchange AND also avoiding gas fees. Again, I want to note that the price difference isn’t as good when BUYING PLU, but may still be a good strategy for when gas is high. Even -2% of the swap amount could be cheaper than the gas fees if gas is high but you want to keep your PLU on chain or avoid exchanges for any reason.

TLDR!
Pros: No gas fees/no ETH needed — the resolver will pay these for you.

Cons: Not possible with smaller swaps. Could get a much worse rate for the swap if no resolver picks it up.

Matcha Auto — https://matcha.xyz/tokens/ethereum/0xd8912c10681d8b21fd3742244f44658dba12264e (This is the PLU token address for swapping PLU).

Okay, this is the shiny new toy that was the inspiration for this guide. It has only been out since 24th May 2023, around 2 weeks ago at the time of writing and it has the same benefit as 1inch fusion of not having to pay gas, but ALSO handled directly through Matcha so you do not have to worry about getting a bad rate in return. The price you see is the price you get. Fantastic. Beautiful. There is just one negative to note: a fee. They haven’t actually stated how much but some Twitter searching led me to 0.15%, which doesn’t seem right. Fees are lame but this includes faster trade confirmation so you can get your trade in before the price changes. When I tried this myself, I got the rate I wanted (the top of a wick) thanks to them paying for a dynamically adjusted gas fee. Now, of course, this did cost me. We can see from the screenshot below that the fee is $17.64, whereas the standard DEX swap is $7.70. To conclude, this feature is great, but would only ever make sense in the following two conditions:

a) Gas is starting to get high (gwei at 70+ when checking https://etherscan.io/gastracker)

b) You have no ETH in your wallet / you do not want to buy ETH.

TLDR!
Pros: Faster trade confirmation. Gas is handled. Very good DEX for getting an effective price.

Cons: Fees that may be higher than gas.

Conclusion

All of this will soon become old information as crypto moves at a rapid pace AND Plutus is hopefully going to deploy on an L2 (Likely Polygon) very soon.

With that said, if this guide helps at least one person in the community to buy or sell PLU without having to use an exchange, either to explore the world of blockchains or in an effort to go bankless, all whilst saving some money in the process, then I am happy.

Enjoy, stay safe and let me know on the Plutus Discord if you have any feedback OR if you have found another interesting way to buy and sell PLU using DeFi. :)