With decentralized financial (DeFi) technologies, the crypto community is constantly exploring for solutions to close the gap between traditional finance (TradFi) and fiat currencies.
Crypto onramp platforms are the key means through which users can move between these two financial ecosystems.
However, according to a new analysis from Cointelegraph Research and Onramper, a cryptocurrency-based financial services provider, 50% of fiat-crypto transfers fail, even after KYC is completed.
Furthermore, due to transactional challenges, transaction abandonment throughout the buying flow can reach 90%.
The analysis examined nine of the largest fiat-to-crypto onramps, including Coinify, Moonpay, Transak, and Wyre.
According to the research, the performance of various onramps varies greatly, with user location being one of the most important aspects. Europe had the highest transaction success rates, while Africa and South America had the lowest.
Payment methods, types of fiat-crypto used, and available trading pairings are all elements that have an impact on transactions on crypto onramps.
Bank transfers have been shown to be superior in terms of transaction success rates, obtaining 100% or almost success on two occasions.
Furthermore, transaction amount was a significant predictor of success, with smaller transactions worth $0-26 attaining a 66% authorization rate, compared to transactions worth more than $5000, which normally have a 19% authorization rate.
The study concluded that one solution to transaction authorization difficulties could be for token service providers to provide as many aggregated onramps as possible under a single interface.
In addition, transactions are dynamically routed to provide users with the best alternative for their individual situations.
Tether chief technology officer Paolo Ardoino recently labeled the platform’s stablecoin Tether (USDT) an onramp for Bitcoin at the World Economic Forum in Davos (BTC).
The Hong Kong Monetary Authority has also referred to its future retail CBDC as a possible entry point into the DeFi industry.
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