The performance of fiat on- ramps: global report

Transcript

[Music] foreign [Music] [Music] ER CEO of onramper we are the number one Fiat on-ramp aggregator um which means that we've aggregated all major field on-ramps in a single widget and API that we have that we offer to parties like sushi bitmax and wirex so I want to walk through a few things with you guys today basically covering the state of Fiat on-ramps which sounds

super um theoretical but we'll make it fun because I'll start with a simple question and if I seem a bit out of breath that's because I jumped out of my Uber to grab a bike because it was quicker and I was stuck in traffic but the question is this so do users still need to touch ethereum's main layer the mainnet right traditionally we've seen that apps were built there now of course there's more transaction volumes on Layer Two than There's an actual main net and that's because it's cheaper faster right um in order to get to these layer twos where people use these applications

we used to buy crypto on the mainnet and then Bridge it over right but that comes with its problems it's not very efficient and yeah Bridges get hacked and we saw this um even last week with multi-chain or any swap so what if this is no longer required what if you can on-ramp directly towards field on-ramps just not touch the main layer at all I'll try to answer this question is this possible but first we need to take a step back and look at what Fiat on-ramps are so many of you might be you know familiar with the concept but Fiat on-ramps are essentially third-party field to crypto

providers right they provide API or widget that you can embed on your project wallet dap exchange whatever this allows your users to buy and in the you know few years past we've seen that these on-ramp sets well we can do this worldwide turns out not really or not very well but I'll walk you through that but this is why we see now more and more on-ramps popping up local bodies with local licenses local banks local payment methods that outperform the more Global on-ramps we see this with um parties like on-ramp money um in India bodies like BC direct European payment methods and many of

these other parties as well as parties like phone Bank in Africa popping up and starting to outperform now field on ramping is the first thing a user does we all want web to adoption in web free or web to users but this needs to work well right this first thing you use it does if it doesn't work they'll just go away so is this possible how how good are these Fiat on ramps currently when it's about payments applications in general there's three important factors to look at fees we all get that right cheaper is better reach which payment methods are available which countries which Fiat

currencies can be used and which cryptocurrencies can be bought what's the support for buying layer 2 based tokens and then the last one which is actually the most important one but certainly in the crypto space the most overlooked success rates do transactions actually work what happens when people click buy you know they run through kyc then do a payment but what if the payment fails right so I'll walk basically and try to answer this question while going through each of these and trying to give some insights and these insights come from our unique positioning in space we have aggregated all Fiat on ramps and we do tons of transaction volumes

through all of them so we understand perfectly what these field on Rams are good at what are they bad at which countries do they perform which countries do they not perform what payment methods what currencies are available um so let's start with then fees it's easy right the perfect field on ramp has zero fees 100 success rate and perfect breach of payment benefits countries now that doesn't exist so we try to approximate that as well as we can when it comes to fees it's pretty interesting because we often talk to parties in space that say oh yeah we had this great conversation with onramp X and they're giving us such a great deal they went down from four percent fees to

three percent fees okay cool um and then we actually look at how much crypto the user receives and we see that they their user receives the same amount of crypto as the user of a party that has that four percent fee now why because eventually fee is not just what's quoted to you by an on-ramp it is what's actually it's all about what do people get at the end of the day how much crypto arrives right people hide fees and spreads on-ramps do this constantly and um without naming any to be honest most of them do right

so in the same way do on-ramps that both have three percent fees um they might give a completely different crypto Indians which also means that the only way to compare fees honestly it's just comparing on ramps based on the crypto received right when it's about layer twos you can imagine that it should be cheaper to buy if the additional cost to get liquidity is lower than the on-chain transaction costs added by using main layer it should be cheaper to buy on Layer Two so is that actually true well this Sunday I had a quick look this is our widget by the way we offer this to

clients and in it we've aggregated all of these on-ramps right so I said okay let's buy 100 euros of Eve on ethereum and hundred years of Eve on arbitrine interestingly I got more on the mainnet and that's because for the left transaction there's about five on ramps available there's not too much fee competition there for the right transaction there's actually you know 10 plus on-ramps available in on-ramp so there's more competition to actually get this transaction the fees are lower but still you think well maybe I thought let's look a bit deeper in that so I asked the data analyst on the Sunday hey

yeah can you quickly look into this because that's quite interesting and he had a look at the price of Eve the effective price after all fees credit card fees for payment processing fees the spreads which is cheaper buying if on optimism or even ethereum and here we do actually see gigantic differences sometimes where the fee on optimism to buy ethereum on optimism is actually a lot lower which is what you would expect right because no mainnet transaction involved therefore lower fees now let's talk about Reach This one is also pretty well understood right if you now go to Mana mask or trust you'll run

into these Fiat on ramps and they started aggregating Vietnam reps adding more fiaton ramps because they realize well if we have more local payment methods and more countries supported more users can buy which is fair enough that's also why within on-ramper right we've got 15 plus on-ramps aggregated that means we support all of their payment methods right um in order for users to be able to skip layer one and just go straight to Layer Two we need good support of layer 2 based tokens so let's look at what that looks like currently now this slide might be a little bit outdated but I'll walk you through it

basically I won't go into different roll-up approaches you've probably been bumped to death with that topic um we see that the more established layer 2's arbitrim optimism polygon have more on-ramps that support tokens on their Network which is better for fees obviously um the more ZK proof based networks still have a lower support from the on-ramp space so less on-ramp support buying tokens on their chain I think starknet does actually have a few on the left but this is still quite low and if we want people to on-ramp directly to also seek a knowledge based protocols this needs to improve now if

you're sitting here and you're from one of these projects talk to me after because I want to improve this um and in the bottom you also see the amount of assets per Layer Two well polygon is also in there um and you'll say that this is not that great yet I did a similar-ish presentation in Bogota and at the time and there was like four assets supported in opportune five assets on polygon so we are making improvements as a space but still of course this is something that we as a space need to improve now the most interesting and overlooked

aspect or Fiat on-ramps is actually success rates what is the point if you say you can support a transaction if five percent of transactions go through right online's often came yeah we do worldwide no you don't we see the data right um sadly we see that when you look at the amount of people that receive crypto after starting a transaction only about 18 of users actually end up with crypto in the wallet 82 fails four out of five rounded up it just I mean round it off run it down it just

doesn't work right and that's including kyc and payment now if we get through kyc correctly and we don't give up because we hate kyc then we end up with payment and we use a credit card and then still 50 percent of credit card payments fill the authorization rates are terrible because somewhere in the chain of the transaction whether it's a user's bank issue or Bank scheme or um any other party in Chain of transaction somebody has an address to Iris now we don't want to support this yeah that is something that and the traditional payment space we've already devised solutions for but in the on-ramp space sadly we're super far

behind so what have we done well we see for every user which on-ramp is actually successful right for this user Jenny in Spain we've seen that a similar person like Jenny have tried a bunch of different transactions we have bins of different on-ramps we see exactly which on-ramps have been successful which ones haven't and we can start using that data in order to build smart routing algorithms basically Dynamic transaction routing for the payments people in the space in order to predict what is the expected success rate of every Fiat online for the specific user and then we can recommend

that on-ramp to the user so We've ran this and essentially compared purely fee based routing which is what's used by most parties against their success based routing and what we see is interesting you see that in many key countries including UK and us you can actually have a x -treme impact on the success of transactions by just knowing which on-ramp to route to right and in the same way we see this in the UK and the same way we see this in other countries um and that's just one form of being smarter about success rates you can also say well actually we should be pushing people towards using alternative payment

method local payment methods because we see that same problems in credit card denial don't exist now I'm from Netherlands everybody in Netherlands uses ideal not credit cards so it's not a surprise to me that you get a massive increase in success rates while doing so and then with parties in space we have these conversations right we say Hey look it's time for you to actually build something proper so that users can actually buy crypto properly and then they say well yeah what's the impact these stats are all cool but what's the actual impact you can get for us so we've basically

applied these five different routing methods and we can go through this after if you want to actually have a chat about it there's also low kyc routing so I'm device-based optimizations and smaller factors we've applied this to what we see as the basic eu-centric user base so for eu-centric user base just applying these routing algorithms you can increase the successful volumes the successful on-ramp transactions by 50 which is massive but when we look at the US it's even bigger this is the average U.S client and for them we can increase this by about 80.

now my call towards the entire space is let's please start thinking about success rates properly right everybody's focused on fees everybody's focused on reach but success rates is where it really at if we can double the amount of inflow then everything we're building on crypto can actually be used because what is the point of building all of these cool applications if it can only be used by people that already have crypto or by the lucky one out of five users that can do a transaction right um and then we also have the globally

dispersed user base about 70 so if you're more equally weighted then cross different regions in the world so to get back to the main question do your users still need to touch ethereum's main layer no but only if we approach on-ramps correctly only if we look Beyond just fees Beyond just reach Beyond just success rates alone but to the total of all three factors and make sure that we make it frictionless cheap and well supported throughout the space now this is what we do at unramper if you want to have a chat later come by to me or anyone with on-ramp shirt there's some people from our team here as well

and I'm super curious to any questions that you might have yep [Music] and I'm just wondering like coinbase makes it really easy because they they allow convertibility do you see that yeah so there's two different forms of

unramping one is on centralized exchanges where you generally use or will use deposit based mechanisms when you first deposit crypto I'm done by that works better right but not every crypto platform especially when we look at D5 daxes nft marketplaces but even wallets want to get the required licenses in order for you to have a Fiat wallet this is where fiaton ramping comes in but also for parties like coinbase and Kraken you know they also can only do this support for Fiat deposits and a more limited amount of regions where they actually have gotten licenses and for the rest they need to Outsource also towards field on web space all right um Jeffrey from a men's wallet

we built a surf Studio wallet which just integrates with unrampa I was wondering if you have like detailed stats about your success rates in different countries different currencies I mean you talked about your smart engine and what does it mean to us yeah great questions already I agree with you yeah well we just built and launched our what we call on-ramper terminal which is a dashboard that basically opens up all of the Data Insights that we see to our clients so what we'll make sure to do will send you a message after or like have a little chat will give you access to on-ramp terminal so you can analyze

for your specific user base what are the success rates in which countries with which on-ramps with which payment methods you can filter and segment the data and we can give that uh fully just openly to you sorry I was a bit late for your talk but um as you uh your name is on-ramp but do you also do off-ramping yeah so on the off-ramping side we also are active we currently use a few different off-ramps and we're testing a bunch to find out what are the specific pain points and which parties are best in terms of banking rails and there we will start

aggregating as well all right then one more question here and then I see some hi thank you for the presentation I know these are not the main points but uh what are your fees and do you take them from final users or on rampers that you Aggregate and is that from end user perspective or from a business looking to integrate on member second one so our fees are pretty simple we are paid by the Fiat on-ramps we send transaction volumes to them they ref share with us so we don't add any fees

on top and then generally we have a subscription model of like 200 Euros a month but we also have a discount code for everybody here in the room which is ECC which gives you about 50 off of that so that's like 100 euros a month great questions really allows me to sell all right yeah then thanks everybody thank you foreign [Music] [Music]

[Music] thank you