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Uniswap and Partnership with MoonPay: What Is Downside of This Collaboration?

Sat, 12/24/2022 - 00:00
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Sabrina Martins Vieira
Uniswap's partnership with MoonPay highlights downside that needs to be fixed on crypto market
Uniswap and Partnership with MoonPay: What Is Downside of This Collaboration?
Cover image via U.Today

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As a result of Uniswap's partnership with Moonpay, users of the decentralized exchange (DEX) will be able to buy cryptocurrencies directly from credit and debit cards on the crypto trading platform.

Bank transfers will also be accepted with this collaboration. However, in the first instance, DEX customers who may enjoy this option will be residents of the United States, Brazil, the United Kingdom and the Single Euro Payments Area (SEPA).

Uniswap shared the announcement on Tuesday.

"Starting today, you can now purchase crypto on the Uniswap Web App using a credit/debit card or bank transfer at the best rates in web3 thanks to our partnership with @moonpay!"

According to the release, DEX users will be able to convert fiat currency into cryptocurrency on the following networks:

·         Ethereum (ETH);

·         Polygon (MATIC);

·         Optimism (OP);

·         Artibrum.

The assets that will be supported by Uniswap in this new stage are Dai, Ethereum, USDC and USDT. Wrapped Bitcoin (wBTC) and Wrapped Ether (wETH) will be supported in certain regions.

In fact, this could be a great incentive for more people to enter the crypto market.

Not only positive sides to this partnership

Uniswap has stated that decentralized exchanges are a better option than centralized ones. After all, a DEX has built-in user protection, self-custodial wallets, immutable protocol's and a public and transparent ledger.

However, Uniswap's ever-increasing closeness to traditional payment methods and centralized companies end up leaving the exchange further and further from being a true Web3 application.

A great example of this is the DEX's policy update. In November 2022, it updated its terms, where it said it will provide more transparency in collection data.

Under the new policy, some factors will be collected by the DEX, such as on-chain and off-chain data connected to users' cryptocurrency wallets.

The decentralized exchange and third-party service providers may collect: 

·         Data related to users' mobile device ID;

·         Cookies;

·         Location storage information;

·         Operating system;

·         Device or browser language. 

"We may use the information we collect as needed or requested by regulators, government entities, and law enforcement to comply with applicable laws and regulations."

Uniswap believes that the adoption of decentralized finance (DeFi) has been problematic due to the lack of a good user experience. Even with the risks, crypto investors prefer to trade on a centralized platform.

However, Uniswap's recent moves also end up harming the true adoption of cryptos, as instead of seeking to make its services more attractive in a decentralized way, it is wagering on adoption through traditional centralized companies that also have dangers.

A team that should be focused on decentralization is helping a centralized company to grow in this sector, even if it is under the banner of adoption, moving people further and further away from the ideal presented by Satoshi Nakamoto in 2008.

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About the author

Sabrina has been creating content for the cryptocurrency market since 2018. Her career includes work for important news portals in Brazil, such as Cryptonizando and Guia do Bitcoin.
In addition, she is a partner of the portal and YouTube channel É Top Saber.
Her passion for blockchain news and education led her to create the news portal Bolhacrypto.
In order to help companies and projects in the cryptocurrency market to develop, Sabrina has been leading Varandacrypto, a company that offers content for blockchain projects.