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Crypto aggregators: how they work and for whom in 2023

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Crypto aggregators: how they work and for whom in 2023

The question of crypto aggregators has been raised since the birth of altcoins. Today, CoinMarketCap lists more than 10,000 coins and tokens, and this is far from the limit. Web3 entrepreneur Vladimir Menaskop explains how, for whom and why to work with such aggregators.

Disclaimer

The author has personally tested the projects discussed in this article, but notes that the Web3 industry changes rapidly. The article is for information purposes, and you are responsible for any use of the services mentioned herein.

Classification of crypto payments

Almost ten years have passed since my first attempt to study similar aggregators and share impressions; the market has evolved beyond recognition. Hence a few important words on how to actually accept crypto payments, how the different methods differ, and who needs them.

All payments can be divided into three types by the criterion of automation:

  1. Manual.
  2. Semi-automatic.
  3. Automatic.

As with any other classification of innovations, this will be incomplete and imprecise, but it helps to understand where to move in practice.

The manual method is the most obvious: set up an ETH domain, specify your BTC- or EVM-wallet (Ethereum, BNB Chain, Polygon, etc.) and accounts in other networks. This method is suitable for those who receive donations or sell goods not in a mass market.

It can be turned into semi-automatic with the following refinements:

  1. Set up notifications about important transactions via Etherscan, BscScan, PolygonScan, etc., which will be sent to your email.
  2. Write, with the help of ChatGPT and OpenZeppelin standards, a simple smart contract with token distribution, notifications, etc. Here, financial security is a critical issue, and knowledge of the basics is indispensable.
  3. Develop bindings similar to IFTTT, for which there are many no-code solutions.

And yet most go down the path of full automation, connecting various aggregators.

Types of aggregators

Among them are those that originally did not work with cryptocurrency but, for various reasons, began to do so. We will mention both those that have continued operating and those that closed. The latter help explain why you risk losing your money.

Crypto aggregators and processors

They were originally designed to work with crypto assets, but some survived and expanded, while others moved into niches. In turn, they can be divided into two broad groups:

  1. Pure crypto aggregators:
    1. Working only with cryptocurrency.
    2. Working with both cryptocurrency and tokens.
  1. Hybrid:
    1. Working with cryptocurrency and fiat.
    2. Working with crypto assets and fiat.

In addition, there are those specializing in payments for ICOs/IDOs, etc.; more inclined to accept Bitcoin (and rarely — something related); suitable for internal exchanges (in wallets, DeFi services, etc.) and others.

A few years ago one could separate “pure” crypto aggregators from wallets, but today many have merged these functions (Bitpay, Advacash), and thus such a categorization loses meaning. Do not classify by self-designations: “processors” and “processing,” “aggregators” and “integrators,” “payment systems” and “payment gateways.” Hiding behind different licenses and approaches, they often perform operations that are almost indistinguishable.

Bitpay — first among equals

Overview:

  1. Website: bitpay.com.
  2. Founded: 2011.
  3. Fiat acceptance: yes, but as settlements.
  4. Own card: yes.
  5. Countries: various.
  6. Reviews: over 100,000.
  7. Fees: from 1%.
  8. Localization: multiple languages.
  9. Solutions: about 10 (card, browser extension, etc.).

Others

The following is a list you can review point by point, formed by the criteria above:

These are the solutions that have surfaced over the past two to three years for at least one of the following reasons:

  1. I have used them personally, paying for crypto services and/or goods.
  2. They were used by my clients/partners.
  3. They are embedded in other crypto solutions (primarily wallets).

Exotic solutions

Since 2016 I have worked in legal consulting related to Web3 startups. In my practice there have been many cases where banks operating in various jurisdictions would not open accounts even for the most legitimate and transparent projects.

What to do?

The simplest is to give up and move into another business. Many did so. But another path is to seek ad hoc solutions. In the latter case, my team and I at DAO Synergis were consulted. Here is the gradation we arrived at:

  1. Directly banks. These can be subdivided into subcategories:
    a. Classical structural banks (many in Switzerland);
    b. Banks with an open structure (e.g., PrivatBank in Ukraine or Tochka in Russia);
    c. Banks as fintech startups.
  2. Non-bank credit organisations. Here everything depends on the jurisdiction, but these entities are often fintech startups, electronic money operators, etc.
  3. Various kinds of payment aggregators (see above). This includes processing centres and similar solutions. By licenses they usually achieve maximum simplicity relative to items 2 and 3.
  4. Centralised exchanges. The picture is clear, but as seen in 2023, it remains unstable;
  5. Forex brokers and all those linked to this market.
  6. Crypto ATMs operators (bitcoinwide.com).
  7. Crypto exchangers in their pure form.
  8. Other solutions.

If you go from bottom to top, you will understand that the higher in the list the structure, the:

On the other hand, lower in the list, the higher the risk of service termination and the less room for financial instruments.

Therefore a balance can be found, but it is not easy: hundreds of partner solutions were customised to 100%.

Crypto offshoring

Today this is the safest solution for DAO, DeFi products, including DEX, and a number of other structures. You can learn about it here, here, here and here.

The main rule: don’t exit the crypto economy if you don’t want trouble from regulators.

Where to find new solutions

Here are the baseline groups I search in:

  1. Defunct solutions (coinbooks.finance, bitmakler.com/birzha, okpay.com and others). If they were active, you can locate digital traces and on that basis reach the services that later came into use. I recommend scanning the list of those who operate only partially or not at all: Onpay, Z-Payment, RBC Money, SpryPay, Assist, Dengionline, IntellectMoney, PayOnline, Skrill, Payza, Ya.kassa, Qiwi.
  2. The next method is to go through case studies. Not long ago I bought on KlimaDAO and found several live crypto payment aggregators.
  3. Undoubtedly, looking through the sites of various ecosystems helps.
  4. As a lawyer, I know that one should always start with documents, namely with contextual search by the rules that are always on sites. Here is a concrete example.
  5. As a crypto enthusiast, I see that there are always open-source solutions that apply different services, through which you can navigate. Here are two examples: PaySuper and Data Terminal.

Conclusion

As can be seen, the market has grown to enormous size in recent years, and finding suitable solutions is a task for even the most diligent. Remember three simple rules:

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