Exchange types on SimpleSwap
Imagine you want to exchange some amount of cryptocurrency. You know how it works with fiat. You suggest it must be the same with cryptocurrency. It almost is. But when talking about cryptocurrency exchange we need to consider the market volatility. It influences the results of the amount to receive and adds extra risks. Luckily there different exchange types. Some of them may help you to avoid unexpected results.
What exchange types does SimpleSwap have?
There are two exchange types: fixed rate and floating rate. You can choose the most suitable depending on your way of using cryptocurrency. Now let’s take a better look at these two types.
What is a fixed rate exchange?
A fixed rate exchange is a type of exchange when customers know the exact amount they are getting. The fixed rate exchange is independent of market volatility. This means that changes in the coins rates do not affect the fixed rate swap.
When you create a fixed rate exchange you have 20 minutes to send us the deposit. The time limit is due to the fact that the coins rates can change at any time. However, we can guarantee the invariance of the amount you receive within 20 minutes from the exchange started.
Fixed rate exchanges also have upper limits on the amount sent.
The good news is a fixed rate exchange takes only several minutes. Because it needs a little time from the deposit receipt to send the coins to the customer.
What is a floating rate exchange?
Unlike a fixed rate exchange a floating rate exchange may bring unexpected results. The market is in constant change. It can change for better or for worse. As a result, the amount of crypto you receive may be different from what you expected at the beginning of the exchange. It can bring you either more or less coins.
What is the difference between a fixed rate exchange and a floating rate exchange?
Let’s sum up all the differences between these two exchange types.
- Amount to receive
The main difference between a fixed rate exchange and a floating rate exchange is the risks you take while swapping. The fixed rate exchange allows you to avoid any change in the amount received. In opposite, you can get more or less coins than expected when choosing floating rate exchanges.
Floating rate exchanges are not restricted by anything. However, setting upper limit is a necessary measure for fixed rate exchanges since SimpleSwap takes all the risks of cryptocurrency volatility and this risk grows with the amount of coins.
Thus, we advise you to choose:
- a fixed rate exchange in case you want to be sure in the amount you receive and make an extremely fast swap;
- a floating rate exchange if you do not want to have restrictions on the deposit time and the amount sent.
On SimpleSwap you can find the most suitable exchange type. We hope that this article helped you to understand the difference between the two types of exchange. If you still have questions, please do not hesitate to contact us or leave your comments under this article. You can also check out other articles on our Medium.
In addition, you are welcome to read our recent press release about fixed rate flow on the CaptainAltcoin platform.
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