Where the money actually goes
Run a ₦50,000 deposit through the four steps and look at which bar is longest. In the worst case the exchange step takes ₦1,990 — more than the other three combined. It is also the step nobody thinks of as a cost, because no one issues a receipt for it.
The second bar is the spread. The step before it is nearly free and the step after it is a flat fee measured in hundreds of naira.
How a spread happens
A peer-to-peer market is a list of offers. Some people want to sell stablecoin for naira and name a price; others want to buy and name theirs. The exchange matches them and takes little or nothing for doing it. Between the best buying offer and the best selling offer sits a gap, and the official rate sits somewhere inside that gap.
Buying coin means taking the selling side, which is above the middle. Selling coin back means taking the buying side, which is below it. Do both inside a week and the whole gap has been paid, which is why paying the spread twice is its own page.
What moves it
- Volatility. When the naira moves quickly, quotes widen to cover the risk of being caught on the wrong side of a move.
- Time of day. A thin book at three in the morning produces a worse best-available price than a busy one at midday. Nothing sinister — just fewer offers to choose from.
- Size. A large order may exhaust the best quote and continue into worse ones.
- Direction. The gap is not symmetrical, and it does not have to be. Demand to buy dollars and demand to sell them are rarely equal.
The range this site uses is 1.5% to 4%, and it is stated as an assumption rather than a measurement. Here is what that range does to the same deposit.
| Deposit | Spread at 1.5% | Spread at 4% | Difference |
|---|---|---|---|
| ₦10,000 | ₦150 | ₦400 | ₦250 |
| ₦50,000 | ₦750 | ₦2,000 | ₦1,250 |
| ₦100,000 | ₦1,500 | ₦4,000 | ₦2,500 |
| ₦500,000 | ₦7,500 | ₦20,000 | ₦12,500 |
Unlike the network fee, this cost scales with the amount — which means on large deposits it is worth real effort, and on small ones the flat fee is the bigger problem.
What can actually be done about it
- Compare before acceptingThe first quote on the screen is not necessarily the best one available, and the difference between the top few is often larger than any other saving on this route.
- Trade when the book is busyMore quotes means a better best-available price. This costs nothing but patience.
- Know the official rate before you lookThe spread is invisible without a reference point. Check the rate first, then look at the quotes, and the gap becomes a number rather than a feeling.
- Count it as a cost, not a priceWriting down the rate you actually got, against the rate that day, is what turns this from an invisible loss into something you can manage. That is the whole argument of reading a P2P order book.
Nearby on this route
Three pages that pick up where this one stops: Starting from OPay, Starting from Moniepoint, Naira to the table.