MetaMask, the most widely used Web3 self-custody wallet, made a huge announcement on Wednesday in a move which further reduces the need for CEX’s. The introduction of their new feature, “Sell,” enables users to easily convert their crypto into fiat currency.
This addition aims to simplify the process for newcomers who may find it daunting to navigate the complexities of converting and transferring their funds to their bank accounts—an obstacle that often discourages those learning to navigate Web3.
At first glance, this feature appears to be a fantastic convenience. However, there is a catch. Let’s delve into the pros and cons:
What Is “Sell”?
MetaMask’s cash-out feature allows users to convert Ethereum into fiat currencies based on their location. The process is straightforward: users select their country, specify the amount for cashing out, and then choose from a list of third-party “off-ramp” providers like MoonPay and Transact, which already facilitate MetaMask’s cash-in process.
We are beyond thrilled to announce our latest feature: Sell.
Yes, you read that right. Available on MetaMask Portfolio, ‘Sell’ allows you to cash out your crypto for fiat currency easily.
— MetaMask 🦊💙 (@MetaMask) September 5, 2023
Once a user selects an off-ramp provider, like MoonPay, the provider takes charge, calculates the exchange rate, and transfers the ETH to the user’s designated bank or PayPal account. Typically, the funds appear in the user’s bank account within minutes.
This is an incredibly convenient option for self-custody wallet users. Generally, converting crypto to fiat and seeing the funds in your account is a more convoluted process, often riddled with friction points. For instance, users would usually need to send their funds to a CEX like Binance or Coinbase first. After the deposit clears there, the conversion to the user’s native fiat currency must occur before the withdrawal to the bank account can take place.
MetaMask is gradually rolling out this feature, starting in the United States, the United Kingdom, and parts of Europe, with plans to expand to more regions in the future to serve its global user base better. While ETH is the only crypto supported by this feature currently, there are plans to include L2’s in due course.
However, there have been issues with some CEXs, like Binance, halting fiat deposits and withdrawals in certain currencies, such as GBP. The main alternative here is Coinbase. However, numerous reports indicate that Coinbase imposes stringent KYC requirements, making it challenging for users to verify their accounts and thus deposit, withdraw and trade.
This leaves some lesser-known alternatives, but finding them requires some research. MetaMask’s Sell function provides a trusted off-ramp solution for many users facing CEX-related roadblocks.
What’S The Catch?
It almost seemed too good to be true, and indeed, there is a catch: the fees are rather steep. The convenience comes at a cost of 9% of the total transaction amount going to the third-party. Additionally, MetaMask takes a 1-2% fee for facilitating the process. There’s also a gas fee for executing the transaction, although this occurs when withdrawing through CEXs, so it’s not an additional expense.
Do you remember MetaMask "SELL into FIAT" feature?
I initially guessed it would "expensive like 5%" fees.
I was WRONG.
It's actually a Total Enormous 9% Fees 💩💩💩💩
Imagine paying 9% in fees just to exit Crypto. pic.twitter.com/eoYKf1Oxag
— yourfriendSOMMI ❤️💛💚💙 (@yourfriendSOMMI) September 7, 2023
With the above considered, you’ll receive approximately $440 to $450 in your bank account for a withdrawal of $500. To take things further, that’s a whopping $500-$600 in fees for a withdrawal of $5000!
Despite the convenience and the welcomed alternative to dealing with CEXs, the fees resemble those of traditional Web2 money transfer services, which many have grown to despise. It’s fair to assume that the adoption of this feature may be limited due to the high fee costs alone.
Nonetheless, it’s one step closer to bringing in more retail users round to the ways of self-custody, and opens up the ability for people to move their money around the world more freely for those who have bank accounts in numerous countries.
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