What a Zero-Fee Swap Charges Instead
No venue converts for free. If the fee line says zero, the cost is in the rate, and it can be measured.
| recorded | |
|---|---|
| topic | exchange |
| kept by | Lena Virtanen |
| length | 2 min read |
A conversion advertised as free is a conversion whose cost has moved somewhere else. Finding it takes one comparison.
The measurement
Capture the quoted output on the zero-fee venue and the reference mid at the same second. The difference is the entire cost, since there is no fee to subtract.
Compare that against a venue charging an explicit fee, where the cost is fee plus spread.
What the comparisons show
In my captures, zero-fee venues consistently quoted a wider rate than fee-charging venues on the same pair at the same moment. The total cost was similar and occasionally higher.
This is not an accusation. It is the arithmetic of running a business.
Why venues do it
Because a fee is salient and a rate is not. A user comparing two venues on an advertised fee makes a decision that the rate then reverses.
The practice is legal, widespread outside crypto as well, and entirely dependent on users not doing the comparison.
The case where zero fee genuinely wins
Small transactions, where a flat minimum fee at the alternative venue would dominate. A zero-fee venue with a proportional spread beats a fee-charging one with a two dollar minimum on a fifty dollar conversion.
The crossover is the same calculation as everywhere else in this subject.
The disclosure question
A venue stating that prices include a margin is disclosing it, even if nobody reads that sentence. A venue stating that conversion is free with no such sentence is making a different kind of claim.
Worth noting which you are dealing with, once.
What to compare instead of fees
The output amount. It is the only number that includes everything, and it is the number you actually receive.
Two venues, same input, same minute, compare outputs. That settles it regardless of how either one describes its charging. Venues that quote the swap rate and the fee as two numbers make the breakdown available, which is useful for understanding but not necessary for choosing.
The habit
Never compare fee schedules. Compare outputs. A platform where the spread is visible before the trade shortens the comparison, and Collect & Exchange publishing a conversion schedule means the comparison can be made before opening an account.
Figures above are single observations, taken on the date shown. Spreads move with the book; treat these as a method you can repeat, not a price you can rely on.