Exodus Wallet Exchange Rates Profit Margins

[JollyGood]

Looking at exchange rates (such as BTC to ETH) they are lower than what appears on CMC.

How much of a mark-up do Exodus and others like it put up on their exchange rates to make a profit and run their wallet services like a profit making business for its owners?

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[OmegaStarScream]

Just like most of the other wallet providers with a built-in exchange, they're using third-party services, ShapeShift in this case. They should earn 0.25% (monthly basis) of the volume provided to the exchange. I don't think they are taking anything else on the side, otherwise, it would've been noticeable.

[JollyGood]

Just like most of the other wallet providers with a built-in exchange, they're using third-party services, ShapeShift in this case. They should earn 0.25% (monthly basis) of the volume provided to the exchange. I don't think they are taking anything else on the side, otherwise, it would've been noticeable.

Many thanks for the reply.

I think there could be a potential problem on two fronts because the rates seem to vary way beyond 0.25% certainly for the BTC-ETH rate I checked. The other is the fact that ShapeShift have implemented KYC so what happens when an Exodus user wants to exchange say 1 BTC to ETH and it triggers a KYC request from ShapeShift?

What happens to the 1 BTC, is it stuck in limbo until/unless ID documents are sent? If they are required, who are they sent to?

Please give your opinion on this

[OmegaStarScream]

I think there could be a potential problem on two fronts because the rates seem to vary way beyond 0.25% certainly for the BTC-ETH rate I checked. The other is the fact that ShapeShift have implemented KYC so what happens when an Exodus user wants to exchange say 1 BTC to ETH and it triggers a KYC request from ShapeShift?

What happens to the 1 BTC, is it stuck in limbo until/unless ID documents are sent? If they are required, who are they sent to?

My answer was about how much money Exodus is making from ShapeShift's partnership. It's unclear how much ShapeShift are making, but they're claiming they have the best rates, not sure how accurate that is as I haven't used them that much.

You also have Changelly (used by multiple wallet providers as well) which apparently, charge a flat 0.5% fee. Read this article[1] for more info about the two.

As for the KYC, these tweets[1][2] should answer your question.

[1] https://blockonomi.com/changelly-vs-shapeshift/
[2] https://twitter.com/exodus_io/status/773149923776659457
[2] https://twitter.com/exodus_io/status/1037256494390104069

[buwaytress]

To further add to Omega's excellent replies, you actually won't notice anything different at all using Shapeshift via Exodus until the Shapeshift paid membership levels are introduced.

This is because you only trigger paid membership (and therefore, KYC) at Shapeshift at $10,000. But another thing to note, these paid membership levels aren't even available yet... so basically, all Shapeshift said back in September was that they'd be enforcing it, but not yet.

I'd wean myself off both. Exodus never gave me any pain except when they decided to just remove Doge. But Shapeshift, well... so many better, cheaper options, without kyc.

[JollyGood]

I think there could be a potential problem on two fronts because the rates seem to vary way beyond 0.25% certainly for the BTC-ETH rate I checked. The other is the fact that ShapeShift have implemented KYC so what happens when an Exodus user wants to exchange say 1 BTC to ETH and it triggers a KYC request from ShapeShift?

What happens to the 1 BTC, is it stuck in limbo until/unless ID documents are sent? If they are required, who are they sent to?

My answer was about how much money Exodus is making from ShapeShift's partnership. It's unclear how much ShapeShift are making, but they're claiming they have the best rates, not sure how accurate that is as I haven't used them that much.

You also have Changelly (used by multiple wallet providers as well) which apparently, charge a flat 0.5% fee. Read this article[1] for more info about the two.

As for the KYC, these tweets[1][2] should answer your question.

[1] https://blockonomi.com/changelly-vs-shapeshift/
[2] https://twitter.com/exodus_io/status/773149923776659457
[2] https://twitter.com/exodus_io/status/1037256494390104069

According to the chat I had with them a little while ago they do not use shapeshift anymore, they use: changelly/changenow (which I would never trust), faa.st, coinswitch and switchain

And they also stated something very important. They confirmed in "some cases" their third-part associate did ask for KYC and they stated they had no idea if funds would be returned to the user wallet if the user declined to provide KYC. They cited the above exchanges and asked to check their TOS. That answer simply is not good enough.

Theoretically it means once an exchange is being requested there is no warning that the following will trigger a KYC request.

Once that request is triggered, there is no  information about what will happen to those funds as it is expected KYC will be sent to the third party processor. There is no information provided what the third party processor will do if the user declines to send the KYC therefore leaving funds in limbo with no guarantee they will be returned to the wallet.

(In my case I would never provide my ID to any online exchange unless it was for FIAT withdrawal purposes and only with a reputable exchange)