The conversion: a fixed ceiling, a variable cost
A conversion multiplies an amount by a rate and then rounds the product to the smallest unit of the second currency. Because the cost of that rounding is capped at one unit, the same rule is nearly free on a large amount and expensive on a small one.
- amounts
- 8
- rate
- one
- worst cost
- 1.75%
- best cost
- 0.00%
A conversion rounds its product down to the second currency's smallest unit, so it can cost at most one unit of that currency. On eight invented amounts converted at one rate, the rule cost 1.75% of a 0.50 conversion, 0.75% of a 1.00 one and nothing at all of a 100.00 one, because one unit is a larger share of a small amount than of a large one.
The same rule on eight amounts
Nothing about the rule changes between the rows. Only the size of the amount does, and that is enough to turn a rounding into a percentage worth caring about.
| Amount | Exact | Paid | Cost | As a share |
|---|---|---|---|---|
| 0.20 | 0.171500 | 0.17 | 0.0015 | 0.75% |
| 0.50 | 0.428750 | 0.42 | 0.00875 | 1.75% |
| 1.00 | 0.857500 | 0.85 | 0.0075 | 0.75% |
| 5.00 | 4.287500 | 4.28 | 0.0075 | 0.15% |
| 10.00 | 8.575000 | 8.57 | 0.005 | 0.05% |
| 50.00 | 42.875000 | 42.87 | 0.005 | 0.01% |
| 100.00 | 85.750000 | 85.75 | 0.000 | 0.00% |
| 1,000.00 | 857.500000 | 857.50 | 0.000 | 0.00% |
| 8 amounts | - | - | max 0.00875 | 1.75% to 0.00% |
What is not on this page
The conversion's rate, its spread and any commission are not the subject here; those are the price of the change and they belong to the desk that owns currency conversion. This page owns only the rounding at the end of it, and the point is narrow but real: a rounding rule that costs a fixed amount of money turns into a rule that costs a percentage only on the small end of the scale. A reader moving a small balance between currencies is paying a share of it to a rule, and a reader moving a large one pays nothing to the same rule. The rate itself is unaffected by any of this.
- Convert in one step where possible; two conversions round twice and are charged a spread twice.
- Convert a larger amount rather than several small ones if the rate is the same, because the rounding cost is capped per conversion.
- Do not expect a rounded conversion to return the original amount: 0.50 in becomes 0.42 and 0.42 back is not 0.50.
- Separate the rounding from the spread when you judge the cost: the spread is the rate's doing and the rounding is the unit's.
- Check which currency the account is held in before staking: a stake placed in a second currency is converted and rounded on the way in.