MetaMask’s new function “Sell” opens up fiat currency transactions, but the total cost of various handling fees is as high as 9%?

Original author: Zen, PANews

The MetaMask wallet, with 30 million monthly active users, now supports direct conversion of cryptocurrencies to fiat currency to bank cards.

On the evening of September 5th, the cryptocurrency wallet MetaMask announced the launch of its latest feature "Sell", which allows users to exchange cryptocurrencies for fiat currencies (such as USD, EUR, GBP) through the MetaMask Portfolio, and send funds to bank accounts. This feature is currently only available in the United States, United Kingdom, and some parts of Europe. Initially, it only supported ETH on the Ethereum mainnet and plans to expand to native gas tokens on Layer 2 networks in the short term.

The "Sell" feature was launched about five months after MetaMask allowed users to purchase cryptocurrencies using bank accounts, PayPal, debit cards, and credit cards with fiat currencies.

According to the official introduction, when users use this feature for the first time, they must select their region. Subsequent uses will skip this step and default to the last selected region. Then they enter the quantity of ETH or other cryptocurrencies to sell, choose a quote from multiple service providers, and connect their bank account. MetaMask has partnered with cryptocurrency onramps such as MoonPay, Sardine, and Transak, but currently, only MoonPay and Transak provide services for the "Sell" feature. New users may need to complete KYC verification on the websites of these service providers before using them.

Due to regional policy restrictions, Asian users are currently unable to use this feature. We can learn about the details of this withdrawal service based on the testing conducted by Twitter user @S4mmyEth.

The British user @S 4 mmyEth initiated a withdrawal request of 0.05 ETH on the "Sell" service, selecting MoonPay as the provider. After the transaction is processed on the blockchain, the associated fees are transferred to MoonPay. During this process, the current value of 0.05 ETH which is approximately 82.78 US dollars generates 0.80 US dollars of gas fee and a 1% on-chain exchange fee. The entire process, from submitting the application to receiving fiat currency, takes approximately 5 minutes.

After completing all the operations, @S 4 mmyEth finally receives 59.42 British pounds. When initiating the withdrawal, the instantaneous price of 0.05 ETH was approximately 65 British pounds. Therefore, it costs nearly 6 British pounds to convert it into fiat currency, with a total fee rate of approximately 9%. Among them, ETH gas fee is 0.65 British pounds (0.80 US dollars), and the exchange transaction fee is 1% (0.65 British pounds). The remaining hidden fee of approximately 4.50 British pounds may be charged by MoonPay.

This also means that there is a total of up to 9% of various types of fees incurred when selling tokens from MetaMask to a bank account, which is significantly higher than expected.

Since the collapse of FTX in November last year, traditional financial institutions have become less friendly towards the crypto market. The recent incidents of crypto-friendly banks collapsing have further narrowed the exchange channels between the crypto market and fiat currency. However, MetaMask is making efforts to reconnect this channel. Although users need to pay friction costs for cooperation with other intermediaries, it simplifies the operation process and is more conducive to attracting more users from outside the crypto circle.

Last December, MetaMask partnered with PayPal to allow some US users to buy Ethereum. This partnership was later expanded to include all US users (except for Hawaii), making it the first Web3 wallet to enable such transactions through PayPal. In addition to direct ETH purchases, this integration also supports transferring ETH from PayPal to MetaMask, allowing more users to self-custody their ETH.

In April, MetaMask launched its "Buy" cryptocurrency purchasing service, offering over 90 different tokens in more than 189 countries. Users can use this feature to purchase over 75 tokens on 8 different blockchains in multiple countries. "Buy" supports a wider range of payment methods, including debit card and credit card transfers, PayPal transfers, bank transfers, instant ACH transfers, and other transfer methods.

Aside from fiat gateways, perhaps sensing the fierce competition in the wallet space, MetaMask has been actively updating its product over the past year.

For example, it introduced stake staking services, allowing users to directly stake tokens like ETH to earn rewards. It has also integrated cross-chain bridge providers, including bridge aggregators and standalone bridges. Additionally, MetaMask introduced "MetaMask Snap," a system that securely extends MetaMask's functionality, akin to the Apple App Store for crypto wallets. It allows third-party developers to launch new decentralized applications to expand MetaMask's capabilities and create a permissionless ecosystem.

As one of the most widely used applications in the crypto market, MetaMask's every move attracts market attention. While other wallets focus on continuous product updates and user experiences, the journey of the little fox in dominating the market may have just begun.