A self-custody wallet is a digital tool where you, not a third party, hold the private keys to your cryptocurrency. This grants full control over your assets.

• Types: Software wallets (like MetaMask, Phantom) and hardware wallets (like Ledger, Trezor).
• Security: You are solely responsible for safeguarding your seed phrase; losing it means losing funds permanently.
• Use Case: Essential for interacting directly with DEXs like Uniswap or PancakeSwap, as they require signing transactions from a user-controlled address.

Network selection is critical, as DEXs exist on specific blockchains. Gas fees are transaction costs paid to network validators.

• Examples: Ethereum mainnet has high fees, while Layer 2s like Arbitrum or sidechains like Polygon offer cheaper alternatives.
• Function: Fees vary based on network congestion and transaction complexity (e.g., a simple swap vs. providing liquidity).
• User Impact: Choosing the wrong network can lead to failed transactions or unexpectedly high costs, so always verify compatibility.

Your seed phrase (or recovery phrase) is a 12-24 word master key that generates all your wallet's private keys. Compromising it compromises everything.

• Best Practice: Write it on paper, store it offline, and never share it digitally or take photos.
• Real Risk: If you enter it on a phishing website, attackers can drain your wallet instantly.
• Why It Matters: This is the only way to restore your wallet if you lose access; proper management is non-negotiable for security.

Wallet connection is the process of linking your self-custody wallet to a DEX's front-end interface to authorize transactions.

• Mechanism: You typically click 'Connect Wallet' on the DEX site, select your wallet type, and approve the connection in your wallet pop-up.
• Permission: This only grants the DEX permission to view your address and request transaction signatures; it does not give access to your funds.
• Example: Connecting MetaMask to Uniswap allows you to swap tokens, but you must manually sign and pay gas for each action.

A test transaction involves sending a small amount of cryptocurrency to verify everything works before committing significant funds.

• Process: First, ensure you have the native token for gas (e.g., ETH for Ethereum). Then, perform a small swap or transfer.
• Purpose: Confirms your wallet is properly funded, connected, and that you understand the transaction flow and fee structure.
• Use Case: Crucial for beginners to avoid costly mistakes, like sending tokens to the wrong address or underestimating required gas.

Wallet connection requests grant a DEX smart contract limited access to your assets, not your private keys. This is a critical distinction for security.

• A DEX can only interact with tokens you approve, not drain your entire wallet.
• For example, approving a USDC swap only allows the contract to move your USDC, not your ETH or NFTs.
• Always review the permission scope in your wallet pop-up; never grant unlimited or 'max' approvals indefinitely, as this is a major attack vector if the contract is later compromised.

Smart contract verification means the code powering the DEX is publicly viewable and matches the deployed address. Unverified contracts are a massive red flag.

• Always check if the platform has undergone professional security audits by firms like CertiK or OpenZeppelin.

• For instance, Uniswap and SushiSwap prominently display audit reports. Interacting with an unaudited, copycat DEX dramatically increases the risk of hidden malicious code designed to steal funds.

• This verification is your first line of defense against sophisticated scams.

Phishing attacks involve fake websites and social media ads that impersonate legitimate DEXes to steal your wallet's seed phrase or trick you into connecting.

• A common example is a fraudulent link on Twitter (X) pretending to be a support account for a popular DEX like PancakeSwap.
• These sites often have slightly misspelled URLs (e.g., 'pancakeswqp[.]com').
• This matters because once you enter your recovery phrase on a fake site, attackers gain full, irreversible control over your wallet and all its assets across all chains.

RPC (Remote Procedure Call) endpoints are the gateways your wallet uses to communicate with a blockchain. Using a malicious RPC is extremely dangerous.

• A compromised RPC can censor your transactions, leak your IP address, and even spoify transaction details to redirect funds.
• For example, only use official RPCs from chain foundations or highly trusted providers like Infura. Avoid unknown RPCs advertised in chat groups.
• This layer of security is often overlooked but is fundamental, as all your transactions flow through this connection.

Transaction simulation is a feature in modern wallets like MetaMask that previews the exact outcome of a transaction before you sign it. This is vital for catching malicious intent.

• It shows you precisely which tokens will be moved, the amounts, and the recipient addresses.
• For instance, a scam token approval might try to transfer all your assets to an attacker's address; simulation reveals this.
• Never blindly sign a transaction without reviewing this simulation. Signing grants irreversible execution on the blockchain.