4. Market Analysis
Last updated
Last updated
Market Niche:
The fiat on & off ramp trading volume has seen significant growth in recent years, driven by the increasing adoption of cryptocurrencies and the entrance of institutional investors into the market. In 2021, the total cryptocurrency trading volume was estimated to be around $14 trillion, with a significant portion of that being fiat on & off ramp transactions. This volume continued to grow in 2022, despite market volatility and regulatory challenges. However, all fiat on & off ramp trading must go through either a centralized exchange (e.g., Coinbase, FTX, etc.) or a centralized OTC broker (e.g., BitOoda, Kraken OTC, etc.). The bankruptcy of FTX in late 2022 had a significant impact on the crypto market, including fiat on & off ramp trading behavior. There was a noticeable shift towards decentralized exchanges. Traders sought the perceived safety of DEXs, which don't hold customer assets directly and are considered less vulnerable to mismanagement or fraud. However, due to the decentralized nature of DEXs, platforms like Uniswap cannot facilitate direct fiat on & off ramp services. Fiat24, which operates as a bank in protocol form, aims to address this issue in a purely Web3 way. Fiat24 can be seen as a unique cross-chain bridge that connects crypto assets (DeFi) with fiat assets (TradFi) directly within a non-custodial wallet such as MetaMask, WITHOUT the need for any CEX or centralized OTC broker.
Competitors:
The issue with fiat on & off ramp is a pain point that has not been perfectly resolved in the crypto space. The majority of users go through centralized exchanges to convert between crypto currency and fiat money. However, this solution has many shortcomings. First, the crypto assets held on centralized exchanges are subject to the counterparty risk of the exchange. Second, fiat transactions through exchanges often require a waiting period of 1 or even several days, which does not allow for real-time transfers. Third, most exchanges are listed as high-risk entities by banks, and when transferring money from the exchange to a client's bank account, banks often raise various questions to justify the transaction. That being said, CEXs with fiat services and OTC brokers are not direct competitors of Fiat24.
Within the crypto space at large, the most obvious comparable protocol is and in the Gnosis ecosystem, who, together, have some similarities to Fiat24. However, Fiat24 has several advantages compared to them. First, we are directly connected to the payment systems of the Swiss and the European central banks, and have become a principal member of Mastercard, rather than connecting through third-party banks like they do, which results in our costs being significantly lower. Second, we use NFTs for client identity verification, instead of using EVM addresses. This gives Fiat24 clients greater flexibility, and the Fiat24 NFT itself is a tradable asset.
Unfair Advantage:
Fiat24 holds a Swiss Fintech bank license, enabling us to be a direct member of SWIFT, SEPA, SIC, Visa, and Mastercard. Being a direct member of these payment networks provides us with three key advantages:
Lowest Costs: For example, Monerium is not a direct SEPA member and relies on a third-party service provider in Spain, resulting in a minimum euro transfer cost of $0.50, whereas our cost is only $0.02. Similarly, Gnosis Pay’s Visa cards are issued through Monavate, an Estonian company, which leads to a card issuance cost of over $5. In contrast, as a principal member of Mastercard, our card issuance cost is under $0.30.
Full Flexibility: As a direct member, Fiat24’s Mastercard can be issued to customers in 65 countries worldwide, whereas Gnosis Pay’s Visa card is limited to customers in the 27 EU countries.
Higher Rebate Rate: In Visa and Mastercard transactions, when customers make purchases globally, a portion of the fees (0.1-1.5%) is rebated back to the issuer. Non-direct members do not receive this revenue share.
On the other hand, Fiat24 operates entirely in a web3 manner, allowing us to run the bank with extremely low human intervention. With only 7 full-time employees, we have no competitors when it comes to efficiency.