Some quick math, I looks like about 3% markup, 6% spread on average. Additionally if you can freeze a trade, the user doesn't have 100% custody.
Conversation
Get me access to whatever benchmark liquidity you used for that math 🤣
1
Your rate compared to sourcing directly from an exchange like Binance with a material amount like 1 BTC.
Compare both a sell and a buy. About 3% either way.
1
Where are you getting ShapeShift's rate from, and on what pair?
2
1
Method:
1. Your brokerage spot from your site.
2. An exchanges spot from their sites.
3. The reviewed markets were the more liquid markets like ETH/BTC, LTC/BTC
Feel free to check the rates yourself. I witnessed between 2-3% markup on each side. It was simple math to check. 👌
1
1
Apologies for being so direct, but you’ve gotta be looking at the wrong quotes or doing the math wrong. If you can find crypto to crypto rates 3-6% better than ours then we should all quit and start an arbitrage fund together. They don’t exist.
1
1
Honestly, I didn't expect this to be news to you. I did some simple quick math with your sites quotes and the exchanges. You have a spread profit attached to your rate that is higher than sourcing from an exchange.
This all makes sense based on the totality of this thread. ✌
1
1
Ok I’ll just leave you with one final thought - take 1 BTC amount and test it from eth->btc and btc->eth. That spread will be <3%. How can we be “charging 3% spread on both sides” if our own market isn’t 3% wide?
2
does arbitrage at scale and they are top 5 on bitmex for volume and they account for 5% of all #btc trading at times. So yes, arbitrage vs a spread on all trades is lucrative and being a broker isn’t easy but providing liquidity to the market is important and needed
1
1
A few thoughts:
1) Shapeshift looks ~0.30% wide, not 3% wide, for me; seeing e.g. 50.41 vs 0.019857 for ETH / BTC. Still wider than you'd get from a top exchange or OTC desk, but tighter than e.g. a DEX.
2) Arbs can be lucrative, though the spreads are generally << 3%.
1
2
(ETH/BTC looks like it's about 10bps wide, ETH/LTC about 30bps.)
In terms of "free"--charging a spread but no commission on top of that is generally accepted to be "zero fee" trading, though not necessarily "free".
1
1
2
Thanks for weighing in ! Agree with your thoughts. Been meaning to touch base with you for a while now - let’s connect directly sometime.
3
Interesting, I was seeing much higher markups. I'll double check when I get back to keys and see if a candle spiked the prices when I reviewed.
I was checking their "Precise" order type they offer since that was the guaranteed rate, opposed to their "Quick" rate that can change.
1