Opening a cryptocurrency account and getting started in decentralized finance (DeFi) are exciting parts of the crypto journey. However, at some point, all users want to get their cryptocurrency out into the real world.
Transferring money or assets between traditional finance (TradFi) and DeFi is referred to as “on-ramping” and “off-ramping”.
Those terms have evolved as fiat money and digital assets currently reside in separate monetary systems.
As this process can seem intimidating at first, we've created this step-by-step guide to help our users on this journey.
What are crypto on-ramps and off-ramps?
On-ramps and off-ramps are the two methods of transferring money or assets between traditional finance (TradFi) and DeFi.
On-ramping is when you use your fiat money to purchase crypto, essentially allowing you to enter the DeFi ecosystem.
Conversely, off-ramping is the process of converting your crypto back into fiat money or using it to buy goods and services directly.
The first step on this journey is to select a suitable platform that meets your requirements.
Finding your crypto off-ramp – Centralized exchanges
To get money out of your cryptocurrency wallet or Web3 wallet and into the TradFi world, you typically need to use a centralized exchange which allows you to fairly easily turn cryptocurrency into fiat money.
The largest, most well-known names currently include Coinbase, KuCoin, Binance, Huobi and Crypto.com.
To capitalize on the best security, cryptocurrency availability and customer support, sticking to the big, well-known exchanges is usually a good strategy.
It is important to conduct thorough research and due diligence before choosing one of the crypto off-ramp options. To ensure the best outcome, we have summarized the key points below.
Key things to consider when choosing off-ramps:
Do the fiat off-ramps allow you to withdraw money in your local fiat currency? If not, you will have to look for different platforms that support your fiat currency (USD/EUR/GBP etc.).
Are the assets you want to off-ramp among the supported cryptocurrencies of the platform? For example, some exchanges don't support YLD and so you will need to swap it into an asset they do support before you transfer it (see below).
Make sure that the platform you select supports a payment method that is available in your country, such as bank transfers, credit card payments, etc.
Different off-ramps offer different transaction fees. Especially when dealing with large sums of money, it is worth comparing the transaction costs between different services before you commit.
Only commit to off-ramps that are compliant with regulations, such as know your customer (KYC) and anti money laundering (AML).
Moving crypto from your Web3 wallet to your off-ramp
Go to where the crypto that you want to move into the TradFi world is currently stored.
If this is in your Yield App wallet, login there. Or, if it is in the Web3 wallet you use to interact with DeFi (such as Metamask, Trust Wallet or Coinbase Wallet), login there.
Off-ramping supported cryptocurrencies
If the digital asset that you want to swap for fiat money is accepted by your crypto-fiat gateway, then you can transfer it straight from this wallet to the off-ramp. To do this, you:
Login to your exchange and copy the address of your wallet there.
Go back to your Web3 wallet and click “Send” next to the asset you want to send to your off-ramp (depending on the wallet setup).
Paste the address of your off-ramp wallet in the box you are prompted to paste it into by your Web3 wallet.
When you click “Send” you can then monitor the transaction on a network scanner, which is Etherscan for Ethereum, or BSCscan for Binance Smart Chain (BSC). This way, you can see whether the transaction has come through or failed.
Off-ramping unsupported cryptocurrencies
If, however, the asset you want to get into the TradFi world is not supported by your fiat off-ramp, you will need to swap it into an asset that is.
If you cannot do this in the wallet or platform it is currently in, you will need to move it first to your Web3 wallet following the same steps as in 2) above, but substituting your off-ramp address for your DeFi wallet address.
Once your crypto is in your DeFi wallet, you should then be able to swap it into an asset that is accepted by your off-ramp using a decentralized exchange (DEX) such as Uniswap for the Ethereum network, PancakeSwap for BSC, and so on.
To do this, head to your DEX of choice and connect your wallet. Then:
Select the token you'd like to swap from the top menu. (i.e. YLD)
Then select the token you would like to exchange it into from the bottom menu. (i.e. ETH) Note: If either token isn't showing up you can find the contract address at CoinGecko or CoinMarketCap and add it in manually using “custom token”
Specify how much of the top token you want to trade for the bottom token.
Once you're happy with what you have entered, click “Swap”. Make sure you have the native token of the blockchain that your tokens are stored on (ETH for Ethereum, BNB for BSC etc.) in your wallet to cover the gas fees.
Preview the transaction in the pop-up window.
Confirm the transaction request in your wallet.
Wait for the transaction to be confirmed and the new asset to land in your Web3 wallet.
Now it's time to move your funds to the off-ramping exchange of your choice.
Before making the transfer, make sure that the exchange supports both the cryptocurrency you possess and the fiat currency you want to off-ramp into.
Once these requirements have been met, you can proceed with transferring them from your Web3 crypto wallet to the chosen off-ramping exchange.
Wait for the transaction to be confirmed and for the asset to arrive in your Web3 wallet.
Go to the asset you want to send from your DeFi wallet to your off-ramp wallet and click “Send”.
After that, paste in the address of your off-ramp exchange wallet into the box provided.
Now indicate how much of the asset you would like to transfer.
When this step is complete, click “Send”. You can keep an eye on the transaction via a network scanner while you wait for it to land in your off-ramp wallet.
Essential know-how for DeFi transactions:
It is essential to be accurate when selecting and entering assets, amounts, networks and addresses as errors can lead to increased gas fees at best or the complete loss of funds at worst.
Transfers in native currency (coins) are cheaper than transfers in tokens. For example: sending ETH on Ethereum costs the minimum gas fee of 21,000 gwei per transaction, while sending USDT, an ERC20 token, incurs additional gas costs on top of the base 21,000 gwei fee.
It is recommended to use Etherscan for Ethereum and BSCscan for Binance Smart Chain (BSC) in order to keep track of your transactions. These websites will provide visibility into whether transactions have been successful or not.
Additionally, in order to conduct an asset transfer or a swap on a DEX like Uniswap or PancakeSwap, you must hold the corresponding native token of the chain in your wallet – such as ETH for Ethereum and BNB for BSC – in order to cover fees.
Withdrawing digital assets into your fiat bank account
For initial withdrawals, most exchanges require you to make a one-time deposit into your account from the fiat account you would like to off-ramp into.
Note that this process may take a few days to clear. After successful completion of the deposit, you can make future withdrawals directly from your crypto exchange account.
Before you can send your funds to your TradFi account, you’ll need to sell crypto for fiat money.
When selling your crypto holdings, use the trade option of your platform to convert them into your fiat currency.
For example, you can place a “spot” trade order for the currency pair ETH-USD to convert your Ether into US Dollars.
Once this is completed and the fiat currency appears in your wallet, use the appropriate “Transfer” or “Withdraw” option to transfer the fiat currency to your bank account.
Note: To ensure successful completion of the transfer, make sure that the name listed on your crypto exchange account is identical to the one used for your fiat account. Otherwise, the transaction may be rejected.
The money will be transferred to your fiat account within a few hours to a few days, depending on your off-ramp and banking provider.
Congratulations! You have successfully moved your funds from the crypto world into the TradFi world.
The off-ramping process may seem daunting at first, but it becomes much easier once you are accustomed to it. However, it does still require several steps to turn crypto into fiat currency.
To simplify the process, Yield App is currently developing an off- and on-ramp solution for EUR, USD and GBP, which will be launched soon. This will allow customers to quickly, seamlessly and cost-effectively buy and sell cryptocurrency via a bank transfer directly on the Yield App platform.
Whether the crypto service provider you are using offers direct on-ramps and off-ramps or not, the same principles apply. Check all the details before sending assets to any address to avoid unexpected losses, make sure you are using the correct blockchain for your digital asset transactions, and don't forget that each transaction has an associated cost. As such, minimizing the number of transactions will help you reduce the amount you spend on fees.
With a little experience, you will quickly get comfortable with moving funds back and forth between the crypto market and the TradFi world, ensuring that you make the most of your digital assets.
This guide is for illustration purposes only, the actual steps to complete a transaction may vary between wallet and exchange services. Users should always conduct their own research before using any exchange, platform or wallet service.
Do you want to earn a secure and sustainable yield on your digital assets? Sign up for a Yield App account today!
DISCLAIMER: The content of this article does not constitute financial advice and is for informational purposes only. The price of digital assets can go down as well as up, and you may lose all of your capital. Investors should consult a professional advisor before making any investment decisions.