How to Swap Tokens on Uniswap or PancakeSwap

Decentralised finance has transformed how you manage and trade cryptocurrencies. No longer do you need to rely on centralised exchanges that hold custody of your funds. Instead, decentralised exchanges (DEXs) like Uniswap and PancakeSwap empower you to swap tokens directly from your wallet, no middleman, no account verification, no central authority. It’s just you, your wallet, and the blockchain.

But if you’re new to this world, the process might feel daunting. How do you actually swap tokens on these platforms? What’s the difference between Uniswap and PancakeSwap? And what on earth is slippage? Don’t worry, this guide will walk you through every step you need to take, from setting up your wallet to confirming your first successful swap. Whether you’re chasing the latest altcoin or simply diversifying your portfolio, mastering token swaps on DEXs is an essential skill in the crypto landscape.

Understanding Decentralised Exchanges and Token Swapping

What Are Uniswap and PancakeSwap?

Decentralised exchanges operate fundamentally differently from the Coinbases and Binances of the world. Instead of matching buyers with sellers through an order book, DEXs use liquidity pools, reserves of paired tokens locked into smart contracts. When you swap on a DEX, you’re trading against these pools, not another person.

Uniswap is the pioneer of this model. Launched in 2018, it runs on the Ethereum blockchain and supports ERC-20 tokens, the standard token format for Ethereum-based assets. Uniswap has become synonymous with decentralised trading, offering a vast array of tokens and deep liquidity for popular pairs. Its intuitive interface and robust infrastructure make it the go-to for Ethereum users.

PancakeSwap, meanwhile, emerged as Ethereum’s gas fees soared. Built on Binance Smart Chain (BSC), it offers a near-identical experience to Uniswap but with dramatically lower transaction costs. PancakeSwap supports BEP-20 tokens (the BSC equivalent of ERC-20) and has cultivated its own vibrant ecosystem, complete with yield farming, lotteries, and NFT features.

Both platforms let you swap tokens without creating an account or surrendering custody of your assets. You connect your wallet, choose your tokens, confirm the transaction, and you’re done. The entire process happens on-chain, verified and recorded on the blockchain.

Key Differences Between Uniswap and PancakeSwap

Whilst Uniswap and PancakeSwap share the same underlying principles, a few key differences will influence which platform you choose.

Blockchain and Token Standards

Uniswap operates on Ethereum, meaning it’s your only option for swapping ERC-20 tokens. PancakeSwap runs on Binance Smart Chain, supporting BEP-20 tokens. If the token you want exists on Ethereum, you’ll use Uniswap. If it’s a BSC token, PancakeSwap is your platform.

Gas Fees

This is the big one. Ethereum’s network congestion can drive gas fees into the stratosphere, sometimes £20, £50, or even higher for a single swap. PancakeSwap, thanks to BSC’s faster block times and lower validator costs, typically charges a fraction of a pound in transaction fees. For smaller trades, this difference is enormous.

Wallet Compatibility

Both platforms work with MetaMask, the most popular crypto wallet. But, PancakeSwap also integrates seamlessly with Trust Wallet and Binance Chain Wallet, making it slightly more accessible to users already in the Binance ecosystem. Uniswap users often pair MetaMask with hardware wallets like Ledger for added security.

Ecosystem and Features

Uniswap focuses on token swaps, liquidity provision, and governance through its UNI token. PancakeSwap offers those features plus gamified elements, yield farms, staking pools, prediction markets, and even an NFT marketplace. If you’re after pure trading efficiency, Uniswap excels. If you want additional ways to earn and engage, PancakeSwap delivers.

Here’s a quick comparison:

Feature	Uniswap	PancakeSwap
Blockchain	Ethereum	Binance Smart Chain (BSC)
Token Standard	ERC-20	BEP-20
Gas Fees	Higher (ETH-based)	Lower (BNB-based)
Main Wallets	MetaMask, WalletConnect	MetaMask, Trust Wallet

Understanding these distinctions helps you choose the right platform for your needs and avoid frustrating compatibility issues.

Preparing Your Wallet for Token Swaps

Choosing and Setting Up a Compatible Wallet

Before you can swap anything, you need a wallet that supports decentralised applications (dApps). Not just any wallet will do, you need one that can interact with smart contracts and sign transactions on the blockchain.

MetaMask is the industry standard. It’s a browser extension (and mobile app) that works with both Ethereum and Binance Smart Chain. Setting it up takes minutes: download the extension, create a new wallet, and securely store your seed phrase. That 12-word phrase is your master key, lose it and you lose access to your funds forever. Write it down on paper, store it somewhere safe, and never share it with anyone.

If you’re primarily using PancakeSwap, Trust Wallet is another excellent choice. Owned by Binance, it’s designed with BSC in mind and offers a smooth mobile experience. It supports both ERC-20 and BEP-20 tokens, making it versatile if you plan to use multiple DEXs.

Binance Chain Wallet is tailored specifically for the Binance ecosystem. If you’re deeply invested in BSC tokens and PancakeSwap, this wallet offers native integration and streamlined functionality.

Once you’ve chosen your wallet, you’ll need to configure it for the correct network. MetaMask, for example, defaults to Ethereum. To use PancakeSwap, you’ll need to add Binance Smart Chain manually by entering the network details (RPC URL, Chain ID, etc.). Most wallets provide guides for this, it’s straightforward but essential.

Make sure you’re downloading wallets from official sources only. Phishing sites and fake extensions are rampant in the crypto space, and one wrong click can compromise your funds.

Funding Your Wallet with Cryptocurrency

You can’t swap tokens without gas, the cryptocurrency required to pay transaction fees. For Uniswap, you need ETH (Ethereum). For PancakeSwap, you need BNB (Binance Coin).

How much should you hold? For Uniswap, keep at least £30–50 worth of ETH in your wallet to cover gas fees, especially during peak network times. For PancakeSwap, £5–10 worth of BNB is usually more than enough, given the lower fees.

You can acquire ETH or BNB in several ways:

• Centralised Exchanges: Buy on platforms like Coinbase, Binance, or Kraken, then withdraw to your wallet address. Double-check the address before sending, crypto transactions are irreversible.
• On-Ramps: Services like MoonPay, Transak, or Ramp allow you to buy crypto with a debit card and send it directly to your wallet.
• Peer-to-Peer: Platforms like LocalBitcoins or Bisq let you purchase crypto from other individuals.

Once your wallet is funded, you’re ready to swap. But remember: always keep a small reserve of ETH or BNB for future transactions. Running out of gas mid-swap is frustrating and can leave transactions stuck in limbo.

How to Swap Tokens on Uniswap

Connecting Your Wallet to Uniswap

Head to the official Uniswap web app, make sure you’re on the correct URL (app.uniswap.org) to avoid phishing sites. In the top right corner, you’ll see a “Connect Wallet” button. Click it, and a modal will appear showing compatible wallet options.

Select MetaMask (or your preferred wallet). A pop-up will ask you to approve the connection. Review the permissions carefully, Uniswap will request the ability to view your wallet address and token balances, but it should never ask for your private keys or seed phrase. Approve the connection, and your wallet address will appear in the interface.

You’re now connected. The interface will display your ETH balance and any ERC-20 tokens you hold. If this is your first time using Uniswap, take a moment to familiarise yourself with the layout, it’s clean and intuitive, but knowing where everything is will speed up future swaps.

Selecting Tokens and Entering Swap Details

The swap interface presents two fields: the token you’re swapping from (input) and the token you’re swapping to (output). By default, the input is usually set to ETH.

Click the token selector to choose a different token. A search bar appears, showing popular tokens like USDC, DAI, and WBTC. You can search by name or paste a contract address if you’re swapping a lesser-known token. Be cautious here, scam tokens often mimic legitimate ones with similar names. Always verify the contract address against a trusted source like CoinGecko or the project’s official website.

Once you’ve selected your input token, choose your output token using the same process. Let’s say you want to swap ETH for DAI. Enter the amount of ETH you want to swap in the input field. The interface automatically calculates how much DAI you’ll receive, factoring in the current exchange rate and liquidity pool dynamics.

You’ll also see key details beneath the swap preview:

• Exchange rate: How much of the output token you’ll get per unit of input token.
• Price impact: How much your trade will move the market price (more on this later).
• Minimum received: The least amount you’ll accept after slippage is applied.

Review these carefully. If something looks off, say, the rate is wildly different from other exchanges, double-check the token contract and liquidity.

Confirming the Transaction and Paying Gas Fees

Happy with the details? Click the “Swap” button. If this is your first time swapping a particular token, Uniswap will prompt you to approve it. This is a separate transaction that grants Uniswap’s smart contract permission to move that token on your behalf. You’ll pay a gas fee for the approval, then another for the actual swap.

After approval, click “Confirm Swap.” A summary appears showing the final amounts, fees, and rate. Confirm once more, and MetaMask will pop up asking you to approve the transaction. Here, you’ll see the estimated gas fee in ETH. Gas fees fluctuate based on network congestion, you can adjust the priority (speed) if you’re willing to wait longer for a cheaper fee.

Approve the transaction in MetaMask. Your swap is now broadcasting to the Ethereum network. Depending on network activity, confirmation can take anywhere from a few seconds to several minutes. You can track its status in MetaMask or by copying the transaction hash and pasting it into Etherscan, Ethereum’s block explorer.

Once confirmed, the new tokens appear in your wallet. If they don’t show up automatically, you may need to manually add the token contract address to your wallet to display the balance.

How to Swap Tokens on PancakeSwap

Connecting Your Wallet to PancakeSwap

Navigate to PancakeSwap’s official site (pancakeswap.finance). The interface bears a striking resemblance to Uniswap, no coincidence, as PancakeSwap forked Uniswap’s code and adapted it for Binance Smart Chain.

Click “Connect Wallet” in the top right. You’ll see options for MetaMask, Trust Wallet, WalletConnect, and others. If you’re using MetaMask, make sure you’ve already added the Binance Smart Chain network (as mentioned earlier). Select your wallet and approve the connection.

Your wallet address and BNB balance will appear in the interface. PancakeSwap’s design is slightly more playful, expect to see cartoon pancakes and vibrant colours, but the core functionality is identical to Uniswap.

Choosing Tokens and Configuring Swap Parameters

The swap interface presents the same two-field layout. The default input token is usually BNB. Click the token selector to choose from popular BSC tokens like CAKE (PancakeSwap’s native token), BUSD, or USDT. As with Uniswap, you can search by name or paste a contract address.

BSC has its share of scam tokens, so verify contract addresses before swapping. BscScan (BSC’s block explorer) is your friend here, cross-reference any unfamiliar token against trusted listings.

Enter the amount you want to swap. PancakeSwap calculates the output amount and displays the exchange rate, price impact, and minimum received. The interface also shows the liquidity provider fee (typically 0.25% of your trade), which goes to users who supply liquidity to the pool.

One neat feature: PancakeSwap lets you toggle between “Swap” and advanced modes, where you can set slippage tolerance, transaction deadlines, and even enable expert mode for faster trades. We’ll cover slippage in detail shortly, but for now, know that the default settings work for most swaps.

Executing the Swap and Managing Transaction Fees

Click “Swap” when you’re ready. As with Uniswap, you may need to approve the token first if it’s your initial swap. Approve the token, then confirm the swap details.

PancakeSwap will display a confirmation screen summarising the trade. Click “Confirm Swap,” and your wallet will prompt you to sign the transaction. The gas fee, paid in BNB, is usually a fraction of what you’d pay on Ethereum, often less than £0.50.

Approve the transaction in your wallet. BSC’s block time is around three seconds, so confirmation is near-instant. Within moments, the new tokens appear in your wallet. If they don’t show up, manually add the token contract address to your wallet’s token list.

PancakeSwap also offers an optional transaction receipt, accessible via your wallet or BscScan. This receipt provides a full breakdown of the swap, including fees, rate, and timestamp, handy for record-keeping or troubleshooting.

Understanding Slippage Tolerance and Transaction Settings

What Is Slippage and Why Does It Matter?

Slippage is the difference between the price you expect when you initiate a trade and the price you actually get when the transaction confirms. In traditional markets, slippage happens due to rapid price movements. On DEXs, it’s also influenced by liquidity pool mechanics and other traders’ activity.

Imagine you’re swapping ETH for a relatively obscure token with low liquidity. Between the moment you click “Swap” and when the transaction processes, someone else might execute a large trade that shifts the pool’s balance. Your trade then completes at a slightly worse rate than anticipated. That’s slippage.

Slippage can work in your favour too, if the price moves positively, you might receive more tokens than expected. But typically, you’ll want to protect yourself from negative slippage by setting a tolerance threshold.

Why does it matter?

If slippage exceeds your tolerance setting, the transaction fails automatically, preventing you from accepting an unfavourable rate. This is crucial when trading volatile or low-liquidity tokens, where price swings can be dramatic within seconds.

Adjusting Slippage Settings for Your Trade

Both Uniswap and PancakeSwap let you customise slippage tolerance in the transaction settings, usually accessible via a gear or settings icon near the swap interface.

The default slippage is often set to 0.5%. For swaps involving highly liquid, stable pairs (like ETH to USDC), this is fine. But if you’re trading a newer or less liquid token, you might encounter repeated transaction failures if the price moves more than 0.5% during execution.

In such cases, increase the slippage tolerance, try 1%, 2%, or even higher for extremely volatile tokens. But beware: high slippage settings open the door to front-running, where bots detect your pending transaction and execute trades ahead of yours to profit from the price movement you’re about to cause.

Here’s a rough guide:

• Stable swaps (e.g., USDC to DAI): 0.1–0.5%
• Liquid tokens (e.g., ETH to WBTC): 0.5–1%
• Low-liquidity or volatile tokens: 2–5% (or more, with caution)

You can also set a transaction deadline, the maximum time you’re willing to wait for the transaction to confirm. If the deadline passes, the transaction fails. This prevents your trade from sitting in the mempool indefinitely during network congestion.

Don’t set slippage arbitrarily high just to ensure your trade goes through. Always weigh the convenience against the risk of receiving far fewer tokens than expected. If a token consistently requires extreme slippage, question whether the liquidity and tokenomics are sound.

Common Issues and Troubleshooting Token Swaps

Failed Transactions and Insufficient Gas Fees

“Transaction failed.” Few phrases in crypto are more frustrating, especially after you’ve already paid gas fees. Failed swaps usually stem from one of a few common culprits.

Insufficient gas: If your wallet doesn’t have enough ETH or BNB to cover the transaction fee, the swap won’t process. Always keep a buffer, network fees can spike unexpectedly, particularly on Ethereum during busy periods. Check your wallet balance before initiating a swap.

Slippage too low: As discussed, if the price moves beyond your slippage tolerance before the transaction confirms, it fails. Increase your slippage slightly and try again.

Nonce issues: Occasionally, your wallet might broadcast transactions out of order, causing nonce (transaction number) conflicts. This is rare but can happen if you’re executing multiple swaps rapidly. Restarting your wallet or clearing pending transactions usually resolves it.

Token approval not completed: If you clicked “Swap” before the token approval transaction confirmed, the swap will fail. Wait for the approval to finalise, then retry the swap.

Failed transactions still consume gas on Ethereum because the network processes the attempt even if it doesn’t succeed. On BSC, the cost is negligible, but it’s still annoying. Always double-check inputs and settings before confirming.

Price Impact Warnings and Liquidity Concerns

Price impact measures how much your trade will move the market price. Large trades relative to a pool’s liquidity cause significant price impact, meaning you’ll receive fewer tokens than the current market rate suggests.

Both Uniswap and PancakeSwap display price impact as a percentage. If it’s under 1%, you’re fine. 1–3% is acceptable for many traders. Above 5%, you should seriously reconsider the trade, you’re paying a hefty premium, and you might be better off splitting the swap into smaller transactions or waiting for more liquidity.

Extreme price impact (10% or more) triggers a warning in the interface. This isn’t necessarily a deal-breaker if you’re swapping a highly illiquid token and you’re aware of the cost, but it’s often a red flag. Low liquidity also makes you vulnerable to slippage and front-running.

If you’re consistently hitting high price impact, consider:

• Trading smaller amounts: Break your swap into multiple transactions over time.
• Using a different DEX: Sometimes the same token has better liquidity on another platform or chain.
• Checking centralised exchanges: If the token is listed on a CEX, you might get a better rate there, albeit with the trade-off of custodial risk.

Liquidity concerns can also arise if a pool is imbalanced or if liquidity providers suddenly withdraw their funds. In such cases, you might find your swap failing repeatedly or executing at terrible rates. Patience and research can save you from costly mistakes.

Security Best Practises When Swapping Tokens

Verifying Token Contract Addresses

Scam tokens are everywhere. Fraudsters create fake tokens with names identical or nearly identical to popular projects, think “Uniswap” instead of “Uniswap,” or a USDC token on a random address that’s actually worthless.

Before swapping any token, verify the contract address. Don’t rely on the name alone. Here’s how:

• Visit the project’s official website or social media (Twitter, Telegram) and locate the contract address they publish.
• Cross-reference it with listings on CoinGecko or CoinMarketCap, both sites display verified contract addresses.
• Paste the address into Etherscan (for Ethereum) or BscScan (for BSC) and review the token’s transaction history, holder distribution, and contract code. Legitimate tokens have active, transparent histories.

If you can’t find reliable verification, don’t swap. The potential upside isn’t worth the risk of losing your funds to a scam.

Another red flag: tokens with absurdly high APYs or promises that sound too good to be true. If a token claims 10,000% returns or guarantees, it’s almost certainly a rug pull waiting to happen.

Protecting Your Wallet and Private Keys

Your wallet is your vault. Compromise it, and you lose everything, with no recourse, no customer support, no way to reverse transactions.

Never share your seed phrase or private keys. Not with friends, not with “support staff” (who are always scammers), not with anyone. Legitimate projects and platforms will never ask for this information.

Be wary of wallet permissions. When you connect your wallet to a DEX, you’re granting permissions for specific actions. Some malicious sites request unlimited token approvals, letting them drain your wallet at any time. Tools like Revoke.cash (for Ethereum) and BscScan’s token approval checker let you review and revoke permissions you’ve granted to various contracts.

Use hardware wallets for large holdings. If you’re holding significant value, consider a hardware wallet like Ledger or Trezor. These devices store your private keys offline, making them immune to most online attacks. You can still connect them to MetaMask for DEX swaps, combining security with convenience.

Beware of phishing. Always type the DEX URL directly or use a trusted bookmark. Phishing sites look identical to the real thing but steal your credentials and drain your wallet the moment you connect.

Finally, treat every transaction as irreversible, because it is. Double-check addresses, amounts, and settings before confirming. A moment of caution can prevent a lifetime of regret.

Conclusion

Swapping tokens on Uniswap or PancakeSwap isn’t just a technical skill, it’s a gateway to the broader world of decentralised finance. Once you’ve mastered the basics of connecting your wallet, selecting tokens, adjusting slippage, and confirming transactions, you’ll find the process becomes second nature. The freedom to trade directly from your wallet, without intermediaries or gatekeepers, is powerful. But it also demands responsibility.

Security must be your constant companion. Verify every contract address, guard your private keys, and approach unfamiliar tokens with healthy scepticism. Understand the nuances of gas fees, slippage, and liquidity so you can troubleshoot issues and avoid costly mistakes. And remember: the decentralised nature of these platforms means there’s no safety net, no customer support to call if something goes wrong.

Yet that’s precisely the point. You’re in control. Your funds, your decisions, your sovereignty. Whether you’re swapping ETH on Uniswap or hunting down the next gem on PancakeSwap, you’re participating in a financial system that’s open, transparent, and unstoppable. The learning curve might feel steep at first, but every swap you execute builds your confidence and competence.

So go ahead, fund your wallet, connect to your chosen DEX, and make that first swap. The decentralised future is waiting, and you’re now equipped to navigate it.

Frequently Asked Questions

What is the main difference between Uniswap and PancakeSwap?

Uniswap operates on the Ethereum blockchain and supports ERC-20 tokens, whilst PancakeSwap runs on Binance Smart Chain supporting BEP-20 tokens. The key distinction is cost: PancakeSwap typically charges a fraction of a pound in fees, whereas Ethereum gas fees on Uniswap can reach £20–50 or higher during network congestion.

How do I swap tokens on Uniswap or PancakeSwap?

Connect your wallet (such as MetaMask) to the platform, select your input and output tokens, enter the swap amount, review the exchange rate and slippage settings, then confirm the transaction. You’ll need ETH for Uniswap or BNB for PancakeSwap to cover gas fees.

What is slippage tolerance and why does it matter when swapping tokens?

Slippage tolerance is the maximum price difference you’ll accept between initiating and completing a trade. If price movement exceeds your set tolerance, the transaction fails automatically, protecting you from unfavourable rates. For liquid pairs, 0.5–1% is typical; volatile or low-liquidity tokens may require 2–5%.

Can I swap tokens without creating an account on a DEX?

Yes, decentralised exchanges like Uniswap and PancakeSwap require no account creation or identity verification. You simply connect your crypto wallet, and all transactions occur directly on-chain. You maintain full custody of your funds throughout the entire swapping process, with no central authority involved.

Why do I need to approve a token before swapping it?

Token approval is a security feature that grants the DEX’s smart contract permission to move your tokens. This is a separate transaction from the swap itself and requires its own gas fee. It’s a one-time process per token, protecting your wallet from unauthorised access.

What are liquidity pools and how do they affect my token swap?

Liquidity pools are reserves of paired tokens locked in smart contracts that enable trading on DEXs. When you swap, you trade against these pools rather than individual buyers or sellers. Pool size affects your price impact—larger trades in smaller pools result in worse exchange rates.