The Allowance Experiment: Part 2

The Allowance Experiment: Part 2
How to Implement the Strategy Using Coinbase, USDC, Phantom Wallet, Solana and Jupiter.

Part 2 of the Allowance Experiment will go into detail about how to implement the strategy for digital assets and using web3 technology from Part 1.

At a high level, you will:

• Setup (if you haven't already) a Coinbase account

• Fund the Coinbase account with a checking account, debit or credit card

• Purchase the stablecoin cryptocurrency USDC

• Create a web3 wallet, the Phantom wallet

• Send the funds from your Coinbase account to your Phantom Wallet via the Solana blockchain

• Connect your Phantom wallet to the Jupiter Exchange

• Swap the USDC for a cryptocurrency (if desired)

• Manage their portfolio
  

More detailed steps:

SETTING UP A COINBASE ACCOUNT

Coinbase is a trusted platform for purchasing, selling, and holding various cryptocurrencies. If you have previously created an account just log in. If not, follow the steps below a

• Create an Account:

• Go to the Coinbase website and click “Get started.”

• Fill in your personal information to create account.

• Complete the verification process by uploading required identification documents, as Coinbase complies with KYC (Know Your Customer) regulations and is a CEX (centralized exchange).
  

SECURE YOUR ACCOUNT

• Enable two-factor authentication (2FA) for added security by going to your account settings.

• Coinbase allows 2FA using SMS or an authenticator app, which enhances your account protection.
  

FUND YOUR ACCOUNT

• Add a payment method (e.g., bank account, credit card) to fund your Coinbase account. This will allow you to use your fiat dollars to purchase cryptocurrency.

• Note that bank transfers may take a few days, whereas credit or debit card purchases are instant but may have higher fees. At the time of writing you can purchase USDC for zero fees with a linked checking account.
  

PURCHASE USDC ON COINBASE

USDC (USD Coin) is a popular stablecoin pegged to the US dollar, widely used across exchanges and DeFi applications. Follow these steps to purchase USDC:

• Navigate to the Buy/Sell Page:

• Log in to Coinbase, go to the “Trade” section, and search for USDC.

• Choose an Amount:

• Select the amount of USDC you’d like to purchase or choose a specific USD amount to spend.
  

REVIEW & CONFIRM THE TRANSACTION

• Review the transaction details, including fees.

• Click “Buy Now” to complete the transaction. Your purchased USDC will be available in your Coinbase wallet.
  

For more details, refer to Coinbase’s guide to USDC.

IMPORTANT NOTE: If you have never used the Solana blockchain before and are following these instructions, you will need to purchase a small amount of the cryptocurrency SOL (Solana) and also send it to your Phantom wallet. SOL is what you will use to pay for the swap fees (minimal) on the Solana blockchain. Follow the instructions above, except for purchase SOL instead of USDC, then when the funds are available, send from Coinbase to your Phantom wallet via the Solana blockchain.

SETTING UP A PHANTOM WALLET

Phantom is a popular non-custodial wallet on the Solana blockchain, making it ideal for storing Solana-based tokens, including USDC. Here’s how to set it up:

1. Download Phantom:

• Visit Phantom’s official website and download the browser extension for the web browsers Chrome, Brave, Firefox, or Edge.

2. Create a New Wallet:

• Open the extension and click “Create a new wallet.”

• Secure your wallet by storing the 12-word recovery phrase in a safe place (not on your computer!) ideally written down twice and stored in a safe. This phrase is crucial for wallet recovery and should never be shared with anyone. This will also be a great time to teach them about self-custody and password management.

Learn more about Safety & Security when navigating the web3 landscape.

3. Set a Password:

• Set a secure password and complete the setup. Phantom is now ready for use, and you should see the main dashboard.

Refer to Phantom’s Getting Started Guide for additional assistance.

SEND USDC FROM COINBASE TO YOUR PHANTOM WALLET

Once you have USDC in Coinbase and a web3 Phantom wallet, it’s time to transfer the USDC from Coinbase to Phantom.

1. Locate Your Phantom Wallet Address:

• Open the Phantom extension and click on your Solana wallet address

• Copy this address to your clipboard.

2. Initiate the Transfer from Coinbase:

• Go to Coinbase, navigate to your USDC holdings, and click “Send.”

• Paste your Phantom wallet address as the recipient address.

• Enter the amount of USDC you wish to send and select Solana as the network.

3. Confirm the Transfer:

• Review the transaction details and fees.

• Click “Send Now” to initiate the transfer. It may take a few minutes for the USDC to arrive in your Phantom wallet.

If you encounter any issues, check out Coinbase’s support page.

CONNECT PHANTOM WALLET TO JUPITER EXCHANGE

Jupiter Exchange is a decentralized exchange aggregator on Solana, offering access to various liquidity sources for token swaps. Here’s how to connect and make swaps:

1. Visit Jupiter Exchange:

• Go to Jupiter’s official website.

2. Connect Your Wallet:

• On Jupiter, click on “Connect Wallet” at the top right corner.

• Select Phantom and approve the connection by following the prompts in your Phantom wallet.

3. Prepare for a Swap:

• Once connected, select USDC in the “From” field and choose your desired token in the “To” field. Jupiter supports a wide range of tokens on Solana.

• Enter the amount of USDC you want to swap.

For a detailed guide on connecting wallets, refer to Jupiter’s documentation.

MAKE A SWAP ON JUPITER EXCHANGE

With your wallet connected and USDC ready, you can easily swap to another Solana-based token:

IMPORTANT NOTE: As mentioned above, you will need to have a little bit of SOL in your Phantom wallet to pay for any swap or transaction fees (these are minimal on the Solana blockchain, $10-15 USD can go along way for transactions)

1. Select Swap Parameters:

• Choose the amount of USDC you want to swap and the token you’d like to receive.

• Review the rate, slippage tolerance, and other swap parameters. If you aren't familiar with these terms yourself this is a great learning opportunity but by default, Jupiter optimizes for the best available rate.

2. Execute the Swap:

• Click “Swap” and confirm the transaction in your Phantom wallet.

• Wait for the transaction to be processed on the Solana network, which usually takes a few seconds.

3. Check Your Wallet:

• Once the swap is complete, open Phantom to verify that the new token has arrived in your wallet.

CONCLUSION: PREPARING TODAY'S YOUTH FOR THE TECHNOLOGY OF TOMORROW

By giving a portion of your kids allowance in cryptocurrency and guiding them through the process of using USDC on the Solana blockchain, setting up a Phantom wallet, and engaging with decentralized platforms like Jupiter DEX, you’re providing the youth of tomorrow with essential tools for the future. They’re not only learning about the financial world but also getting hands-on experience with the innovative technologies that will shape the future economy.

This strategy is more than just about money management—it’s about empowering the next generation to take control of their digital identity, engage in decentralized communities, and become active participants in the Web3 ecosystem. As they learn to utilize these new technologies they are preparing to thrive in a world where finance and technology are increasingly decentralized, transparent, and user-driven.