The on-ramp and off-ramp between dollars and crypto

Graduate · enrolled learners

This lesson opens with Wyre, 2023.

What happened

Wyre was a payments-infrastructure company that provided the on-ramp and off-ramp between dollars and crypto: the plumbing that let wallets, apps and platforms convert a customer's dollars into crypto and back. Many products did not build that conversion themselves; they relied on Wyre's API, so Wyre sat in the middle of the flow, and at times it held customer funds during conversion. A planned roughly 1.5 billion dollar acquisition of Wyre collapsed in 2022, and in early 2023, amid the market downturn, Wyre announced it was winding down. It then limited customer withdrawals, reportedly to a fraction of balances, which alarmed everyone who had money in transit or built on it, before ultimately shutting operations and urging customers to withdraw what they could. Reports do not establish a mass loss of customer funds, which is why the recorded loss is zero, but the episode showed that the bridge between the dollar and crypto worlds is itself a company that can limit withdrawals and disappear, taking access, and potentially funds in transit, with it.

The decision point

The on-ramp and off-ramp are not features of the crypto system; they are businesses. An on-ramp converts a customer's dollars into crypto; an off-ramp converts crypto back into dollars; and both are operated by companies that plug into banks on one side and chains on the other, frequently custodying funds during the conversion. That makes a ramp a dependency with two distinct risks. The first is access: if the ramp fails or limits withdrawals, the products built on it lose the ability to move customers between dollars and crypto, which for a payments product is core function, not a nicety. The second is custody: because the ramp often holds funds mid-conversion, its failure can put money in transit at risk, not just the flow. Wyre is the case where an on-ramp and off-ramp that many products relied on wound down and limited withdrawals, threatening both. So the decision anyone building on payments makes is to treat the ramp as a dependency whose failure is planned for, knowing whose funds it holds and when, and holding an alternative path between fiat and crypto, rather than assuming the bridge between the two worlds is permanent, because it is a business, and businesses fail.

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

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