The convert button is the most expensive button on your exchange. Here is how to measure it.

[feeedge]

A pattern from the fee threads here: everyone compares trading fees, most people have looked at withdrawal fees, and almost nobody has ever measured what the convert button costs. That button is where the quiet money goes.

The mechanics. Trading fees are printed on a fee schedule. Withdrawal fees are printed on a withdrawal page. The convert quote is neither: it is a spread baked directly into the price you are shown. The venue quotes you a rate slightly worse than the order book midpoint, pockets the difference, and shows you no fee line item at all. Many venues market this as "zero fee conversion," which is technically true and practically meaningless, because the fee moved inside the price.

Typical gaps, as snapshots not live quotes: on major pairs the convert quote often sits half a percent to two percent worse than the book mid. On thinner pairs it gets uglier. Someone in the withdrawal fee thread mentioned XRP to stablecoin conversions costing more than the withdrawal itself, and that matches the math: on a 1000 dollar conversion, a one percent hidden spread is 10 dollars, more than the trading fee and the withdrawal fee on the same trip combined. And since it is a percentage, it scales with size. The bigger your conversion, the more generous you are being.

The 30 second test, doable on any venue right now:
1. Open the convert screen and get a quote for a round amount, say 1000 usdt worth.
2. Open the order book for the same pair and note the mid price.
3. The difference between what convert gives you and what the mid says you should get is your real fee. Write it down as a percentage.

Repeat across two or three venues and the pattern shows itself fast. Some venues quote tight, half a percent on liquid pairs. Others quote like they assume you will never check.

Two honest exceptions. For dust and tiny balances, convert is often the only sensible route, the book does not care about your 3 dollars. And on genuinely illiquid pairs, a market order on the book can slip more than the convert spread, so the button occasionally wins. The point is not that convert is always bad. The point is that nobody checks, and the pricing reflects that.

Curious what people here find. Run the test on your main venue and post the pair, the quoted rate, and the book mid. I will tell you if your quote is fair or if your exchange is billing you for the convenience of not thinking.

[retaur]

Comparatively dexes followed by limit orders on cexes are always the cheapest rate usually.

There are some conversions between stable coins that are fee free on a lot of exchanges too now. It's crypto to crypto where conversions are costly.

[Perfectbaby]

Withdrawal fees and trading fees we are not really looking into these little cases that is where most issues are coming from us, when you take a look at how productive are they doing you would understand we should seat up to clear some kind of problem in the country. You know, both essential to be talked and handle out, another thing  here you must usually note what you should be dishing out to someone when you don’t know.

[Charles-Tim]

Two honest exceptions. For dust and tiny balances, convert is often the only sensible route

What the exchanges want you to believe by making it like that.

There are some conversions between stable coins that are fee free on a lot of exchanges too now. It's crypto to crypto where conversions are costly.

You are referring to spot trading part of the exchanges. Some exchanges still say convert is free, although shady on some exchanges but truly free on some, but which may not continue.

USDC/USDT is of zero trading fee on many exchanges, I mean on the spot trading. I am not referring to convert.

[RGBTC]

Instant conversion or exchange assumes that you agree to the exchange offer, not the market maker. I've never noticed how often users take advantage of this feature, unless they only want to exchange a small amount. The cost of slippage against actual prices may not be significant. The spot market also has a market order feature, so traders prefer it because they can also monitor the price chart.

[letteredhub]

A pattern from the fee threads here: everyone compares trading fees, most people have looked at withdrawal fees, and almost nobody has ever measured what the convert button costs. That button is where the quiet money goes.

Not that nobody has actually measured the cost comparing to spot trading sell order fees but it's just that some people after discovering doesn't feel the needs for making it a subject of discussion. But rather they just silently avoid making use of the convert button which also appears to be a convenient fast way to swap one coin/token to another. Though I do agree that not many people may know about this, not until now.

Perhaps we're paying more fees for the convenience 

[Hatchy]

USDC/USDT is of zero trading fee on many exchanges, I mean on the spot trading. I am not referring to convert.

Exactly, I don't use the conversion button more often except I want to get TRX for fees on my self custodian wallet. I'm more of just two coins that's BTC and usdt and converting from bitcoin to usdt requires no fees when I use the spot. I simply sell my BTC using the current market price and the fee is very insignificant. I think a friend of mine thought about it one time I was having issues with conversion rates which was just too much on a normal sense. Selling to usdt has almost zero trading fees. Only when converting to other coins that I get to pay a small fees but all are still calculated using the market rate at the time. But I completely understand what op is saying as it's something we usually ignore on most exchanges..

[Findingnemo]

You set the price in the conventional exchange, so what is stopping you from setting the price higher than the value is already in the top?

The demand/dupply dictates the real value of crypto it just varies even from one trade to another in the same exchange but ultimately you are in complete control of that button and you can set the value as you wish which can be 10x higher than the market value.

[Frankolala]

Instant conversion or exchange assumes that you agree to the exchange offer, not the market maker. I've never noticed how often users take advantage of this feature, unless they only want to exchange a small amount. The cost of slippage against actual prices may not be significant. The spot market also has a market order feature, so traders prefer it because they can also monitor the price chart.

I'm not a regular trader so, I only convert Bitcoin to USDT and vice versa on spot trade. What I understand is that the price of converting bitcoin to USDT on spot market varies from exchange to exchange. I prefer using Bitget or Binance for spot trade because it's just as if it's free since just a little difference in price change from the actual price.

[CageMabok]

...

I'm not a regular trader so, I only convert Bitcoin to USDT and vice versa on spot trade. What I understand is that the price of converting bitcoin to USDT on spot market varies from exchange to exchange. I prefer using Bitget or Binance for spot trade because it's just as if it's free since just a little difference in price change from the actual price.

What you say is true, and I often see this difference on several major exchanges. Even between Bitget and Binance, there's a price difference, although not much. And what you're doing is clearly trading, as it's very common for everyone to exchange Bitcoin for stablecoins or vice versa. But from what I feel about trading on the spot market, it feels more flexible and comfortable, because the spot market is very different from other markets like Futures.

[Zaguru12]

What you say is true, and I often see this difference on several major exchanges. Even between Bitget and Binance, there's a price difference, although not much. And what you're doing is clearly trading, as it's very common for everyone to exchange Bitcoin for stablecoins or vice versa. But from what I feel about trading on the spot market, it feels more flexible and comfortable, because the spot market is very different from other markets like Futures.

The price difference you see between two exchanges are actually because of the trading fees or simply because of the transaction volume which differs from each other, there is an order book you see below an exchange which shows buy and sells data, this is what actually controls the price, ideally this will make each exchange have varying prices but because they we now have each exchange information readily available most buyers and sellers can take information from the other exchanges and set their price on another exchange too there. The little difference this days are actually base on fee.

Only when converting to other coins that I get to pay a small fees but all are still calculated using the market rate at the time. But I completely understand what op is saying as it's something we usually ignore on most exchanges..

Yes the reason why the fees for other alt coin pairs are actually higher is simply because of liquidity, the largest liquid pair on every exchange is actually the USDC/USDT or BTC/USDT(C) and it’s the reason why they have lower fees when compared to any of the pairs on exchanges

[joniboini]

Looks like OP already posted their ANN thread for their service. The name makes me recall previous thread about fees I commented on. I think you don't have to create a new thread to ask people whether their calculations are correct or not. I assume this is part of your marketing activity. If that's the case just use your sig space or comments on related threads accordingly. I think making threads on your own in high succession will be detrimental to your branding.

[slaman29]

I must have been trading on really old or bad exchanges (haven't done proper trading since more than 5 years now) but I always had to trade my balances to convert, never really saw the convert options that I recall.

Swap, convert, etc. Why don't people know already they have high fees though? I'm not sure anyone using them does so willingly

[feeedge]

joniboini, fair point, and I hear you. Yes, there is an ANN thread, and yes, these topics sit close to what I build, I said that openly in the first fee thread before anyone asked. No new threads from me for a while, I will stick to replying in the fee discussions that are already running and leave the tool talk to the ANN thread. Honestly the convert topic came from here anyway: someone raised conversion costs in the withdrawal thread, a few people said it deserved its own thread, so I wrote it.

slaman29, that is the part I find most interesting. Most people sense convert is expensive, but they assume the bad rate is the market, not the venue. The spread is invisible on purpose: no line item, no percentage anywhere, just one friendly number. Once you run the 30 second test and write the gap down as a percentage, it stops being a feeling and becomes a number you can compare. People change their habits pretty quick after that.

Charles-Tim, on dust: you are probably right. Small balances are exactly where nobody bothers to measure, so that is where the button gets pushed the hardest. Your USDC/USDT point is the right counterexample too: zero fee stable pairs on spot are real and worth using. They also make the rest of the convert pricing look worse by comparison.

Zaguru12, agreed, liquidity explains the spread on the books. The convert quote is its own thing though: the venue sets it, not the book. Two venues with basically the same book liquidity can quote noticeably different convert rates on the same pair. Same market, different markup. That gap is the number worth posting.

[Karl_3000]

Swap, convert, etc. Why don't people know already they have high fees though? I'm not sure anyone using them does so willingly

There is an exchange that I used the convert because it says it is zero fee but I noticed the fee charges is far more than the normal trading fee on the exchange. I stopped using the convert on exchanges now and go for just the trade which the fee is not high normally.

What I think is that exchanges do the convert in a way newbies can easily understand how to use it than using the trading section.

[CryptopreneurBrainboss]

Curious what people here find. Run the test on your main venue and post the pair, the quoted rate, and the book mid. I will tell you if your quote is fair or if your exchange is billing you for the convenience of not thinking.

When ever an app makes things easy for you to do then just know that they're making more profit from helping you than you going through the longer process of doing it by yourself. I have noticed this high charges too that's why I don't use such features instead I trade every coin that I want to buy or sell (convert to another coin) right from the exchange option. I think why the convert option is more costly is because you pay multiple fees when you do that like trading fees and their extra fees or probably they delay the exchange value so as to make more profits from their customers. The easiest way to notice this high charges is to compare the value of your coin before and after you make use of the convert button as there is always a significant drop in value unlike if you use the exchange option directly.

[henmark]

Instant conversion or exchange assumes that you agree to the exchange offer, not the market maker. I've never noticed how often users take advantage of this feature, unless they only want to exchange a small amount. The cost of slippage against actual prices may not be significant. The spot market also has a market order feature, so traders prefer it because they can also monitor the price chart.

Because not many people actually do care about the fee when they are using the convert option. Do not get me wrong, there are plenty of people who are using it, but that doesn't mean that there are enough of those who care about the discrepancies in the exchange rate and the convert rate. You are making a trade that is basically a "sell on market" type of thing, which means that it could be bad for you and you do not care.

If you care, you put up a limit order and wait, and if it fills up then you get the best you can get, but if you do not want to wait then you convert and get it right away and leave happy, that is what it is there for, and that is what those people are using it for.

There is an exchange that I used the convert because it says it is zero fee but I noticed the fee charges is far more than the normal trading fee on the exchange.

Yeah. I remember that few exchanges offered zero fee conversion but you will not get the best price as per the real time market fluctuation which must be the catch here.

[Odogwu-Blockchain]

I discovered this long time ago each time I needed to trade my BTC to Fiat on the p2p exchange on Binance back then. Each time I use the USDT/BTC pair to sell my Bitcoin, the fee had always been smaller, at least I'll receive my full token with a very slight amount reduced from it.

Each time I used the convert button sell to USDT, the outcome had never been the same, always large fee incured on it. But the big difference, convert button is faster than sell button. Because of the speed of conversation, convert button has greater fee,.

Sell button may take time to execute while convert button waits for no buy order to execute. You going to pay bigger for faster delivery.

[feeedge]

Karl_3000, the newbie point is the sharpest one in this thread. Convert is the first button a new user understands, and it is priced like the venue knows that.

CryptopreneurBrainboss, your before and after check is the same test with fewer steps. No order book needed: note your balance, convert, note what you got back. If the drop is bigger than the trading fee would have been, the difference was the venue's margin.

henmark, fair. Plenty of people pay for speed with their eyes open, and that is a legitimate trade. The group I am after is the one that thinks the number on the convert screen is the market price. Nobody can weigh speed against cost when the cost is hidden.

Odogwu-Blockchain, exactly, and the sell button on spot is instant too when you use a market order, with the fee printed. Convert is the same speed with the fee unprinted. That unprinted part is the whole discussion.

One observation after three days: lots of agreement, zero numbers. If one person runs the test on any venue and posts the pair, the quote, and the book mid, this stops being anecdotes and becomes a comparison. First number posted sets the benchmark everyone else gets measured against.

[slaman29]

slaman29, that is the part I find most interesting. Most people sense convert is expensive, but they assume the bad rate is the market, not the venue. The spread is invisible on purpose: no line item, no percentage anywhere, just one friendly number. Once you run the 30 second test and write the gap down as a percentage, it stops being a feeling and becomes a number you can compare. People change their habits pretty quick after that.

Was active on a very old site that still exists today. The swap rate was 4% min it would jump to even 10 on high network. Trust me. People would know because it would be discussed in chat a lot. And they would still do it and just be salty. I'm sure you're right that many would change habits, but if the habit is convenience swapping at the expense of 10%, maybe some people would stay on. Humans

Swap, convert, etc. Why don't people know already they have high fees though? I'm not sure anyone using them does so willingly

There is an exchange that I used the convert because it says it is zero fee but I noticed the fee charges is far more than the normal trading fee on the exchange. I stopped using the convert on exchanges now and go for just the trade which the fee is not high normally.

Zero fees and shit rate is an old bank trick All moneychangers say Zero Commission now too, so what, right I actually prefer no lies on the rate and a fixed % commission.