The crypto community is constantly looking for ways to bridge the gap between traditional finance (TradFi) and fiat currencies with decentralized financial tools (DeFi). The Crypto onramp platform is the primary way users can cross between these two financial ecosystems.
However, a recent report from Cointelegraph Research and Onramper, a crypto-based financial services provider, states that 50% of fiat-crypto transactions fail, even after KYC is completed.
In addition, due to difficulties in the transaction process, transaction abandonment during the purchase flow can reach 90%.
The survey looked at 9 of the biggest fiat-crypto onramps including Coinify, Moonpay, Transak and Wyre, among others.
According to the data, the performance of various onramps varies, although one of the main factors is the location of the user. Europe has the highest success rate in transactions, while the lowest is found in Africa and South America.
Other factors that affect crypto onramp transactions include the payment method, the type of fiat-crypto used and the available trading pairs. Bank transfer as a payment method proved to be superior in terms of transaction success rate, achieving 100% or almost success in two cases.
related: Credit cards can bridge Web2 to Web3, music industry executives say
Additionally, transaction value is a key indicator of success with smaller transactions worth $0-26 achieving a 66% authorization rate, compared to transactions over $5000, which typically have a 19% authorization rate.
The study concluded that a potential solution to the transaction authorization problem could be for token service providers to offer multiple onramps aggregated into a single interface. It also dynamically guides transactions to give users the best option for a given situation.
Recently, at the Davos World Economic Forum, Tether’s chief technology officer Paolo Ardoino called the platform’s stablecoin Tether (USDT) an onramp for Bitcoin (BTC).
The Hong Kong Monetary Authority has also cited the upcoming retail CBDC as a potential onramp into the DeFi space.