Vikara August 2024 Update – Volatility, Sentiment, and Digital Asset Resilience

Looking back and one could have envisioned a scenario where the crypto sector did not recover from the damage done by bad actors. Yet here we are two plus years later with each case largely resolved and not one dollar of taxpayer money spent to bail out any of the failed businesses.

At the same time, the actors from the early days of crypto have been largely relegated to the ash heap of history. Take Su Zhu and Kyle Davies, the co-founders of the failed Three Arrows Capital (3AC). They launched a new venture called OPNX, a crypto exchange and claims trading platform, in mid-2023. Less than a year later it officially shut down. Market forces sorting it all out.

Moving onto crypto adoption. One of primary issues in cryptocurrency is ease of use and in turn consumers willingness to participate in the sector. This is driven by varying levels of complexity across different blockchain ecosystems coupled with a lack of mass market products.

Regarding the former, say you want to buy a token on the Solana Network that is not listed on a centralized exchange (most SOL tokens are traded only on decentralized exchanges). Listed below are the traditional steps to buying a Solana network token.

1. Set up centralized exchange account like Coinbase (complete paperwork/KYC)
2. Onboard fiat to Coinbase and buy SOL tokens (banks often limit direct transfers to cryptocurrency accounts, at least initially)
3. Set-up a Solana network self-custodial wallet such as Phantom using the obligatory seed phrases that should be stored in an ‘impenetrable’ location
4. Send SOL tokens from Coinbase to Phantom
5. Connect Phantom to a Solana network decentralized exchange, such as Jupiter
6. Use SOL tokens in Phantom to swap for your token of choice on Jupiter
7. Assuming you want to harvest any gains/losses and offramp to fiat, you must do the above but in reverse order

We highlight the above given many newer entrants to crypto may find the steps listed above to buy, sell and realize potential profits all too much, especially once you layer in seed phrases, wallet addresses, and potential issues with little to no customer service should something go sideways. And of course, the fear that the tokens will disappear into the Nethersphere.

Times are changing though. Solana recently announced that they have integrated Meld, a fintech infrastructure platform that enables users to onramp, offramp, and transfer between fiat and crypto and across over 150 countries, numerous currencies and multiple payment methods. 

Solana users can now acquire tokens directly in their self-custodial wallet. Users can choose from eight fiat-to-crypto onramp providers – Meso, Coinbase Pay, Robinhood Connect, Stripe, Unlimit, Topper, Transak, and Blockchain.com while paying from Apple Pay, Google Pay, debit and credit card, or bank transfer.

All the above can be done in less than 10 minutes in a mobile phone app with no need for a centralized exchange account or desktop computer (assuming one already has a wallet set-up).

Ton network self-custodial wallets TonKeeper and MyTonWallet announced late last year a similar arrangement as described above with Changelly, an instant cryptocurrency exchange that facilitates fiat-to-crypto swaps.

This simplification of the onboarding process is one step towards making the entire cryptocurrency experience easier for non-native users. Add in the new technology that eliminates seed phrases (Figure 4), and the barriers to entry for new users will drop significantly.