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What types of fees does COINQVEST charge?

Generally we don't apply any fees of our own at the moment. There are many ways to monetize the service. One idea is to offer a freemium model, where the platform is free for low volume merchants but high volume merchants (e.g. > 100k USD volume/month) have to pay a modest fee of 1%.

Currently the only fees imposed must be paid to anchors during withdrawal events to bank accounts or blockchains other than the Stellar Network. These fees are reasonably small and much lower than e.g. credit card or PayPal. We're talking with anchors to offer even better deals for our merchants. Withdrawals to Stellar are entirely free of fees.

All conversions are executed on the Stellar Decentralized Exchange (SDEX) at current rates. If a merchant wants to sell a T-Shirt for 10 USD, we guarantee 10 USD as settlement amount to the merchant. Our platform calculates the currently required price for each supported cryptocurrency to execute trades that would fill the 10 USD. The prices are then displayed back to the customer.

However, from this point in time and when the customer executes the payment the market can change. This is more likely to happen for payments on slow blockchains like Bitcoin or Ethereum. In this type of situation, we might end up with less BTC than what is required to acquire 10 USD for the merchant.

To mitigate this risk, we're applying a "community pool" concept to all payments. We add a 1.5% slippage to the payment price given to the customer. Instead of paying the BTC equivalent of 10.00 USD, he pays the equivalent of 10.15 USD.

When the payment arrives we convert the funds to USD. Once the conversion completes, any leftover dust goes into the community pool. In times when the market tanks and we end up with less BTC than needed to purchase 10 USD for the merchant, the difference is paid from funds in the community pool. Most of the time the community pool grows but there are cases where we need to draw from it to fill the guaranteed settlement amount. If a merchant chooses BTC as settlement currency and his customers pay in BTC then then no slippage is applied and the merchant is credited 1:1. No conversion, no slippage.

The default behavior on our platform is explained above, but merchants can also choose to pay the slippage themselves (they would get credited 9.85 USD) or split it with the customer (0.075% on both sides). This can be configured in the merchant's account settings.

Last Update: Apr 3, 2020