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Uniswap implements fiat currency transactions with MoonPay. What are the security and usage thresholds?

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How secure is it to use MoonPay to buy crypto assets? Does MoonPay lower the barrier to entry into the crypto space?

原文标题：《解读 Uniswap 借 MoonPay 实现法币交易，安全性和使用门槛如何？》

原文作者：雾海，PANews

Uniswap 官方在 12 月 21 日宣布与加密支付公司 MoonPay 达成合作。其合作方式为用户可以在 Uniswap 网页端中使用信用卡、贷记卡、银行转账的方式购买加密货币，其底层由 MoonPay 支持。首批支持购买的 Token 包括 DAI、ETH、MATIC、USDC、USDT、WBTC 和 WETH。目前支持 ETH、Polygon、Optimism 和 Arbitrum 链。

MoonPay has already worked with a number of high-profile deals and platforms to expand its offerings. In late November 2021, MoonPay began testing its NFT High Net Worth Individuals Fast Track service, which aims to provide a seamless transaction experience for high net worth individuals wishing to purchase NFT. The service makes it easier for customers to buy NFT. American pop singer Madonna used the service to buy BAYC.

Then, in April 2022, NFT marketplace OpenSea partnered with MoonPay to launch credit card payments on its platform, making it easier for users who don't own cryptocurrencies to buy NFTS. In the same month, MetaMask announced a partnership with MoonPay that will enable MetaMask users to purchase ETH and other assets using major credit and debit cards as well as Google Pay and Apple Pay, and enable bank transfers in more than 160 countries.

MoonPay is also teaming up with Aptos Labs, Ethereum Tier 2 expansion scheme Immutable X, and more. According to its website, MoonPay has reached $2 billion in transactions, over 250 partners, over 5 million customers, and supports over 80 crypto assets.

MoonPay works with so many well-known encryption companies and protocols, which is enough to see the resources and operational capabilities behind it. In November 2021, MoonPay announced the completion of A $555 million Series A equity round led by Coatue and Tiger Global at a post-funding valuation of $3.4 billion. On April 13, 2022, according to Reuters, MoonPay disclosed that it had raised $87 million from more than 60 prominent investors, Including singer Justin Bieber, rapper Snoop Dogg and actor Bruce Willis. (Note: The deal is part of A Series A round of funding.)

So how secure is it to use MoonPay to buy crypto assets? Does MoonPay lower the barrier to entry into the crypto space? PANews conducted trial experience.

Is it safe to use MoonPay to buy crypto assets?

In order to use fiat currency to purchase cryptocurrencies, you need to comply with KYC/AML policies, and there is no doubt that users will need to store private data such as personal credit and debit cards when using MoonPay. According to official MoonPay documentation, all data sent by users to or from MoonPay is encrypted in transit using Transport Layer Security (TLS) 1.2 or higher, and protected against degradation attacks using HTTP Strict Transport Security (HSTS) policies.

All MoonPay data is statically encrypted using AES-256 block-level storage encryption and stored in data centers that comply with ISO27001 and PCI DSS standards. MoonPay also complies with the General Data Protection Regulation (GDPR) to ensure that all customer and employee personal information is handled in the highest level of security and legal manner. All payment information is also processed and stored in accordance with the Payment Card Industry Data Security Standard (PCI DSS).

However, it is impossible to verify whether there is the possibility of leakage from the third-party partner company in this process. MoonPay does not share customer data with Uniswap Labs, and Uniswap Labs does not collect and store financial data such as credit card, debit card and bank information, or personal data such as first name, last name, email address and IP address, according to documents from its work with Uniswap.

And, according to Cryptoslate, in mid-March 2022, MoonPay suspended its operations in Ukraine, Russia, and Belarus, and stopped working with customers with physical addresses in those regions. Many crypto companies, not just MoonPay, have understandably taken sides during the conflict between Russia and Ukraine. But users are worried about whether a company that collects huge amounts of their core private information will be forced or forced to hand over its data the next time it takes sides.

In terms of laws and regulations regarding the use of fiat currency to purchase crypto assets, MoonPay has a European receipt channel and a global compliance license. At the same time, the anti-fraud process was completed by partnering with Sardine, a cryptographic compliance platform. It also covers the risk of fraud and non-payment, according to official information.

Fiat currency purchase of crypto assets has always been the most intuitive and highest demand of the market. However, due to the anonymity and other capabilities of crypto assets, criminals complete illegal acts such as money laundering through crypto assets. This process has resulted in many crypto users who were not involved in illegal activities unknowingly receiving funds from unknown sources, which is the biggest pain point for users who use fiat money through centralized trading platforms.

So far, MoonPay has cooperated with a number of legal banks on the entry terminal to focus on serving the entry users, ensuring a clean source of entry funds. However, for entering users, the legal currency market makers MoonPay cooperates with include a number of companies, including several centralized trading platforms. Due to the complex asset sources and users of the trading platforms, if there is no extremely strict anti-money laundering measures, entering users will still be at risk of judicial freeze if they receive illegal gains in crypto assets.

Does MoonPay lower the barrier to entry into the crypto space?

此次与 Uniswap 合作，在双方的合作文档里提到，其收取费用是整个市场中最低的之一。Uniswap 就所有支持的Token购买与商家协商了低滑点和低手续费。第一，没有最低费用。用户无论购买量多少，通常商家会收取最低费用，但通过 Uniswap 接口进入 MoonPay 购买时的最低费用为零。第二，USDC 无差价。一般商家报价的 Token 价格略高于市场价格作为利润，MoonPay 为 USDC 购买提供零滑点。

However, through PANews experience product, it is found that it costs 8918 yuan to buy one ETH at MoonPay, while the ETH of the same coin Anfecoin channel costs 8419 yuan. In other words, MoonPay is 500 yuan higher than the ETH fiat price of Binance, which is a 5.6% difference.

解读 Uniswap 借 MoonPay 实现法币交易，安全性和使用门槛如何？

(Left side is Uniswap side MoonPay fiat currency purchase, right side is Binance fiat currency purchase)

This is significantly inconsistent with information disclosed in Uniswap's official collaboration documents. According to MoonPay, when users buy crypto assets, they charge 4.5% of each purchase or a minimum fee of $4.99. Users pay a 1% commission to sell cryptocurrencies. Current Uniswap port MoonPay rates are roughly in line with their original rates.

During the bull market, users accepted such high fees because of FOMO sentiment. As mentioned above, MoonPay captured the summer of NFT by making it easy for many users to buy NFT. Especially through the binding of celebrities and blue chip NFT, further build their own brand effect. At the same time, the payment scene continues to expand to accommodate a larger group. However, when the market environment is sluggish, it reduces the willingness of new users to enter the encryption field through it to some extent.

Taken together, the MoonPay platform approach lowers the threshold for outside users to enter the crypto circle and expands the incremental market. But its high fees limit its ability to bring a wider audience to the crypto space.

summarize

MoonPay's fees are high, especially when users buy NFT assets. The NFT market already has a royalty and platform fee friction of around 15%. The optimism of the bull market cycle allowed users to generate a lot of demand despite such high price differentials and friction. Bear market cycle users start to think.

However, users in the crypto space rely on bull market cycles to achieve orders of magnitude growth, and bear market cycles to achieve lackluster user growth. As a result, MoonPay has generally expanded access and lowered barriers for more users to enter the crypto space. From MoonPay's point of view, fees are not only paid but also required to cooperate with banks and review various compliance procedures.

The source of assets legitimate or not is still no way to avoid the problem, can only rely on the platform's own strict audit ability. The legal currency channel of the centralized trading platform frequently appears the problem of frozen cards and frozen coins, one of the reasons is that the audit is lax, and the basic delivery of deposit can become a market maker. MoonPay's access to the liquidity of a centralized trading platform is one of the pitfalls of asset compliance.

However, this is a common problem in the current industry and even the Internet itself, and we can't expect MoonPay to solve it. In terms of the crypto field, the existence of MoonPay platform provides more scenarios. Users can not only directly purchase crypto assets without many unnecessary procedures, but also purchase crypto assets through credit card loans, allowing larger groups to enter the crypto field conveniently, and providing greater imagination space for the total valuation of crypto assets.