🦊 MetaMask & Wallet Fundamentals

A practical introduction to how wallets, keys, gas, and DeFi actually work.

🤔 What Is a Wallet? (It’s not what you think)

❌ MetaMask is NOT

• A place where your money is stored
• A bank
• A blockchain

✅ MetaMask IS

• 🔐 Key manager – securely stores your private keys (encrypted)
• 🌐 RPC client – talks to blockchains via window.ethereum
• ✍️ Signer – cryptographically signs transactions and messages

Key takeaway:
The blockchain is the database.
MetaMask is just the communicator.
If MetaMask disappears, your account still exists.

🔑 Public vs. Private Keys

• Private Key 🔒

  • Proves ownership
  • Never share (outside dev/test scenarios)

• Public Key 🔓

  • Derived from the private key

• Address 📬

  • Hash of the public key
  • Safe to share
  • Used to receive funds

⚠️ Blockchain transactions are final.
There is no undo button.

🌱 Seed Phrases (BIP-39)

🧮 The math

• 12 words = representation of massive entropy
• Based on a fixed list of 2048 words
• Total combinations: ~5.4 × 10³⁹

🌳 The hierarchy

Seed Phrase → Private Keys → Public Keys → Addresses

🚨 The danger

• One seed controls all derived accounts
• Leaking the seed = total loss
• Wallet passwords only protect locally, not on-chain

Whoever has the seed is you.

⛽ Gas = Compute Credits

You cannot write to the blockchain for free.

The formula

Transaction Fee = Gas Used × Gas Price

Key concepts

• Gas → amount of computation
• Gas limit → max you’re willing to pay
• Gas price (Gwei) → priority in the network
• Nonce → your personal transaction counter
  (prevents replay attacks)

Higher gas price = faster inclusion ⏩

🔍 Reading the Blockchain (Etherscan)

• The blockchain is a public database
• Anyone can inspect:
  • Transactions
  • Balances
  • Contract interactions
• Tools like Etherscan are just explorers — not special permissions

Sending crypto = writing to the database
Reading Etherscan = reading the database

🔁 What Is Uniswap?

🧠 As a protocol

• Smart contracts deployed on Ethereum
• Runs autonomously (no servers, no company)
• Can be used without a website

🖥️ As a dApp

• Website = graphical interface
• Generates complex transactions for you
• Your wallet signs and submits them

The frontend is optional.
The smart contracts are the real product.

✅ The “Approval” Pattern (Very Important)

The problem

Smart contracts cannot move your tokens automatically.

The solution (ERC-20 standard)

1. Approve

   “I allow Uniswap to spend 100 USDC”

2. TransferFrom

   “Uniswap takes the USDC and gives ETH”

ETH vs Tokens

• ETH → native currency (no approval needed)
• ERC-20 tokens → separate contracts (approval required)

⚠️ Token → ETH swaps always need approval first.

🏠 To-Do (Recommended Practice)

• Swap ETH → USDC on Uniswap
• Supply USDC as collateral
• Borrow DAI
• Research:
  • Lending protocols (Aave)
  • Health factor
  • Liquidation risk

🧠 Final Takeaways

• Wallets manage keys, not money
• Seed phrases are absolute power
• Gas is payment for computation
• dApps = frontend + smart contracts
• Approvals are fundamental to DeFi

Understand this once — avoid costly mistakes forever. 🛡️