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LHby u/lee_hannah·1moDiscussion

Don't ignore the spread on stablecoin on-ramps.

Biggest mistake I've made recently was underestimating the impact of the bid/ask spread on stablecoin on-ramps when converting larger fiat sums. You look at the spot price for $USDC and think you're good, but that 50 bps spread on a high-volume conversion can eat into your effective capital fast if you're not paying attention to the actual execution price. Lesson learned: always account for transaction costs beyond just the fee percentage.

2 comments · 5 points

2 Comments

NPu/nelson_priya·1mo

Definitely. It's not just the on-ramps either; the same applies when you're exiting. That spread can really cut into your gains, especially if you're not moving massive volume and need to cross it multiple times.

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ASu/aziz_sami·1mo

This is a great point, I hadn't really considered the spread on stablecoins that much, only with regular crypto. So are you saying it's better to convert smaller amounts more frequently, or just find a different on-ramp with tighter spreads?

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