In this article, we will go through how you can take the first step in getting your money into exchanges to buy your crypto.
The process of on-ramp essentially allows you to convert fiat money into cryptocurrencies, off-ramp in turn refers to “cashing out” your crypto currencies back into fiat money.
Using the analogy of a highway, on-ramps helps you get onto the crypto-highway and off-ramps get you off from it.
This concept allows users to be able to easily get on and off the highway at any time. Ideally, there should be a seamless experience in for the usability of on-ramp and off-ramp.
The most common place crypto investors on-ramp is via a centralized exchange (CEX). Big players which provide these on-ramp services are commonly known to be your Binance, Crypto.com and Kucoin.
Also Read: Centralised Vs. Decentralised Exchanges: Which Should I Use To Trade Crypto Assets?
These platforms (and many others) allows users to take the first step in purchasing their very first crypto currencies. The mode of fiat transfer ranges from multiple alternatives from credit card payments, bank transfers, to P2P (Peer to Peer).
On-ramping via a CEX usually requires new users to upload official details for verification. These details might include their proof of address, signatures, or even a selfie.
This Know-Your-Customer (KYC) process is important in ensuring fraud minimisation, and for some exchanges, will only give your access to their services once the KYC is provided.
For a step-by-step guide in setting up your account, check out the video below.
Ledger Live also gives you a seamless on-ramp process with its ecosystem, which allows you to easily buy and sell your crypto assets using your credit card.
This of course goes in conjunction with the cold wallet, Ledger Nano.
Also Read: Here Are The Pros And Cons Of Trezor And Ledger Crypto Cold Wallets, And Which You Should Buy
As you complete your transaction on CEXs, the tokens you buy would all be placed in a custodial wallet. This means that you are not in complete control of the tokens. However, with Ledger Live, you would have a wallet that gives you full control.
NFT is the biggest buzz in 2021 and its going even stronger in 2022. NFT marketplaces like OpenSea and Rarible give users new avenues to on-ramp.
These platforms makes it possible for users to take their first steps into crypto via NFTs, and enable them to purchase on the platforms through their credit cards.
This shortens the steps needed to take into buying an NFT.
The traditional way starts from buying ETH in the CEXs mentioned above, and transferring them to your MetaMask wallet and from there, buying your NFTs.
Also read: Your Complete Guide To The Largest NFT Marketplace: OpenSea
Options for off-ramp
You might have done pretty well on your crypto/NFT portfolio but realize you do not have cash to buy physical products. This is where off-ramp comes into play as you “cash out” your gains.
Spending your crypto
This might sound counter intuitive but it is true — certain companies/shops out there accept payment for their goods via the tokens you own.
For example, Tesla is currently accepting payment in $DOGE and countries such as El Salvador do accept cryptocurrency as its legal tender.
Off-ramp via an exchange
Just like how you on-ramp your fiat currency into the CEXs, most centralized exchanges allow you to off-ramp as well.
Before you go ahead and choose the CEX you might want to on-ramp to, make sure the exchange supports the fiat currency you would like to off-ramp to.
Most conversions include an exchange fee, so it really boils down to which exchange you choose to use.
This can be as simple as selling the cryptocurrency you own and have the corresponding fiat equivalent paid to your bank account.
One exchange that does this well is Crypto.com. They offer credit cards you can use in off ramping your funds and is one of the most seamless process out there.
Also Read: What Is The Crypto.Com Card And Which Tier Has The Best ROI? Here’s All You Need To Know
Take note, the off-ramp process might take a few days, and it is not as liquid as the money you have in your traditional banks.
I have been a big user and fan of this method of on-ramp and off-ramp. In the P2P system, you are able to on-ramp fiat currencies with individuals who plan to off-ramp.
Make a bank transfer of the amount you wish to on-ramp, and the other party will transfer you the equivalent amount in a stablecoin.
This is the fastest way to on-ramp and off-ramp, and the process would take less than 5 minutes to complete. You do not have to wait for days in receiving your funds.
However, there comes a risk, and a loophole in this system which is being exploited. This system gave birth to money laundering acts where syndicates utilize the P2P system to remove trace of illegal funds.
In Singapore, big centralized exchanges like Binance and Huobi have had to stop operations in Singapore when their P2P systems were flagged as a breach to monetary laws.
Users of the platforms then had to shift their crypto funds out of one CEX to another to continue trading, so take note on the approved exchanges available in your country.
So there you have it, you’re now an expert in on and off-ramps, so go forth and explore the world of crypto!
There is so much about crypto that you can do, from NFTs to farming to the endless possibility of technology building in the space. At the same time, scams in crypto is a real thing, do your due diligence in research and never buy something because someone on the internet tells you to.
Featured Image Credit: Chain Debrief
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Also Read: A Complete Guide To Setting Up MetaMask For The Fantom Network And How to Import Tokens