Uniswap has launched a feature that will allow users to purchase ETH, MATIC, WBTC, WETH, USDT, USDC and DAI by linking their MoonPay accounts to the decentralised exchange.
Decentralised exchange (DEX) platform Uniswap has partnered with payments solution provider MoonPay to allow users purchase cryptocurrencies on its web app using debit or credit cards and bank transfers.
According to the announcement made on December 20, users will now be able to directly access the DeFi (decentralised finance) protocol and buy crypto in three simple steps: connect their Ethereum wallets to the Uniswap web app, click the wallet dropdown, select ‘Buy Crypto’ option and choose their preferred token, and pay directly from their bank accounts connected to MoonPay. The purchased crypto token will be stored on the user’s self-custody wallets.
The feature is currently available to Uniswap and MoonPay customers in over 160 countries, however, the bank transfer option is only available in Brazil, the UK, the EU’s Single Euro Payments Area (SEPA) and a few states in the US. Initially, users can purchase cryptocurrencies including ETH (Ether), MATIC (Polygon), WBTC (wrapped BTC), WETH (wrapped ETH), and USDT, USDC and DAI stablecoins. The fiat on-ramp will be supported by wallets on Ethereum, Polygon, Optimism and Arbitrum networks.
However, the ability to purchase certain assets depends on the region. For example, users in the United States cannot purchase WETH or WBTC.
Uniswap has confirmed that it will not be charging any service fees regardless of the purchase size. The exchange will also have zero spread for USDC purchases. Spread is a margin fee quoted by payment processors by showing a slightly higher token price than the original market price.
The exchange stated that many of the supported tokens have a minimum purchase size of $15 (£12.31) or equivalent in respective local currencies. But, tokens like ETH, USDC, USDT and DAI have a variable minimum purchase size that is based on market conditions. The maximum purchase limit depends on which crypto the customers decide to buy using any given fiat currency. For example; USDC has a cap of 10,000 ($10,000) on Arbitrum and Optimism, while purchases in USD is capped at 12,000, GBP at 9,000, EUR at 10,000, and CAD at 16,000. The purchase limit will also be based on what is allowed by the user’s banks. Uniswap recommends either bank transfer or debit cards for this purpose.
In its announcement, Uniswap took a dig at centralised exchanges (CEX), some of which have collapsed in the recent months, like FTX, Celsius and BlockFi.
“Decentralised exchanges (DEXs) are the safest way to trade digital assets compared to their centralised counterparts. With self-custodial wallets, permissionless and immutable protocols, and a transparent public ledger, DEXs have built-in user protections. However, a major barrier to DeFi adoption has been the onboarding experience, compelling users to store their CEXs for convenience, despite the risks.”
Uniswap has confirmed that users will not be required to verify their identities to use its protocol, but only when purchasing crypto through MoonPay. Both platforms have promised that they will not be sharing customer data with each other. Uniswap will not collect and store any user data such as credit card, debit card and bank information, or personal data such as names, address, date of birth, email address and IP address.
Last week, MetaMask launched a feature that will allow customers in the United States to purchase ETH on its mobile app by linking their PayPal accounts. The Ethereum-based self-custody wallet’s web app already supports cryptocurrency purchases via MoonPay, Coinbase Pay, Transak and Wyre.
Decentralised exchanges are collaborating with popular payment solution providers to help onboard more users on to their platforms. One of the major concerns with DeFi was its complex mechanism when buying or selling cryptocurrencies, which is now changing.