DeFi Basics: How to Buy Crypto

Looking to get into the world of cryptocurrency? The options are plentiful! You can easily buy crypto on centralized exchanges like Coinbase, Binance, OKX, and Kraken. These platforms offer a user-friendly interface and a wide selection of digital assets to choose from. These platforms require KYC (Know Your Customer), which requires uploading identification and verifying tax information. Typically, purchasing ETH on Exchanges or 3rd party providers can have fees as high as 2-5%! In this article, we are going to explore a 0% fee option with Coinbase (USDC). For Europeans, Monerieum is a 0% fee solution to transfer Euros from an IBAN bank account directly to an onchain DeFi wallet address.

I would like to note, If you have a trusted crypto-savvy friend, you could also consider buying directly from them using cash. This can be a convenient way to get started, especially if you're new to the space. This method doesn't require any KYC or personal information being stored in a potentially vulnerable centralized database, a prime target for hackers.

Recommendation: Bank account, Coinbase, Buy USDC, transfer to DeFi Wallet.
Start by downloading the Coinbase App from Google Play Store or Apple App Store, or use Coinbase.com. Create an account, add 2FA, verify your identify, then connect your bank account.

Click on the 'Buy & Sell' button on the Home tab, select 'Buy', and choose 'USDC'. USDC is a stablecoin pegged to the U.S. dollar, redeemable 1:1. Type in the amount you want to transfer from your bank account. This process might take multiple days, depending on your bank, and shouldn't have any fees.

Now that you have USDC on your Coinbase Exchange account, you must click 'Transfer', select 'Send Crypto', choose USDC, and copy/paste your DeFi wallet address starting with '0x' or ending in '.eth'. When asked which blockchain to receive USDC on, choose 'Base'. Coinbase doesn't charge any fees to send to the Base blockchain. Base doesn't charge any fees to send USDC to another wallet address but doesn't cover using DeFi apps. As of September 18th, 2024, our recommended DeFi Wallet Rabby will cover your transaction fees on Base for all DeFi apps. In the future, you might need to transfer the USDC to your Rabby GasAccount, before you can use any DeFi apps.

At this point you are in DeFi! You can use a decentralized exchange (DEX) to swap USDC to ETH or supply USDC on Aave to earn yield. We will explore exciting new DeFi opportunities in future articles.

*Another innovative option, not covered in this article, is the new peer-to-peer marketplace called ZKP2P, which enables you to buy USDC directly through Venmo, Garanti, and Revolut. This approach provides an extra layer of privacy and security, making it an attractive choice for those who value decentralization. ZKP2P could be a great onboarding option if the platform gains adoption.