Exchange liquidity & BTC/USDC 'swap'

I had wanted to use Nash as my primary platform for swapping between BTC and USDC. When I go to Exchange on the app, and use the quick exchange (swap) feature, it presents a price and a fee which I am happy with. Ok great, so all looks good.

But say now I want to exchange 2 BTC for USDC using the quick exchange. As far as I understand it, Nash leverages its exchange to allow for these ‘quick’ trades. In other words fees are kept low because all trades/swaps go through Nash’s own exchange. But taking a look at the exchange volume, depth and spread over the last week, with the 24hr volume for BTC/USDC right now being $54 000 (not even a single bitcoin), where is the liquidity to guarantee the price of my swap? How is there sufficient liquidity for me to make this instant 2 BTC exchange and keep the stated price? If Nash places a market buy for 2 BTC there will potentially be massive slippage. Is the quick exchange a market buy or is there some other mechanism or hidden volume I am unaware of?

So my main question to you is, if I quick exchange 2BTC to USDC on the nash app, will the entire amount execute at the stated exchange price? If so, how is this possible if the exchange is providing the liquidity and it does not have the liquidity to make this trade without massive slippage?

If the fundamental lever of all Nash platform features is the exchange, how can the new market strategy de-prioritise it to such an extent? If the exchange dies, how can the other services survive? What am I missing?

Could someone clarify please. Thanks.

The quick swap feature doesn’t create a market buy. It creates a limit order close to the current price, which will be filled by market makers.

It’s usual for market makers not to leave all their capital exposed on the order book at once. If your order is there, it should get filled quickly.


Thanks for your reply.

Ok, I see.

I assume then that if the ‘swap’ is not able to proceed quickly, because the amount exceeds the true liquidity, the app will prevent it from happening (or give a message)?

Is liquidity for this feature at all a concern, say, in a massive selloff? Or have all bases been covered by the Nash team in assuring the user will always have this feature accessible (within reasonable limits) and not have to partially complete the swap, or swap at lower prices? Ie: is this market maker liquidity tenuous or very robust?

The imagined scenario behind this topic: having preemptively sent some of my BTC to my Nash address and then into the ‘trading’ wallet when network fees are low, in preparation to swap for USDC long before and in anticipation of a potential blow-off top, there is insufficient liquidity to ‘swap’ during peak mania, necessitating two additional expensive, urgent send transactions to get the coins to another platform to make the trade (plus trade and withdraw fees there). Just wanted to get expert input on this in order to evaluate the chances of it occurring.

I think the chances are very low. However, I’ve referred your question to @Anton, our head of trading.

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Hey @lowercaseAPE

First thing to clarify here is volume vs liquidity. Volume is number of trades occurring in some timeframe, while liquidity is possibility of trade occurring at given price.

As for volume you are correct, last few days have been very low on volume, but liquidity wise it’s not bad at all. If you for example check out Nash’s +/- 2% liquidity on websites like Coingecko for example, you will see that we have at least 350K on each side or more under 2%. Sometimes that number is 700K, currently its 650K/320K. In theory that means that someone can do a swap of 10 BTCs in one order and move the price for 2%, and in practice if you done that in just this moment that would happen. In practice your 2 BTC buy or sell would move the price less then 0.25% if at all.

Even exchanges that have lot more volume then Nash, would have trouble “eating” 10BTCs without causing at least 1% of change in the price, sometimes more.

Even though a chance of you doing a 2 BTC and getting big slippage is almost none, no one can guarantee that if you do a swap of 2 or 3 of 4 BTC in a go, it’s impossible. Books are being operated by MM, who move their orders constantly based on the market shifts. Therefore there is a difference between market orders that guarantee execution and limit orders that guarantee price.

It’s also good to point out here that on a test performed just a month ago on our ETH/USDC market (link) selling 100ETH and then buying 100ETH in one go, it caused only 0,31 ETH of loss on Nash which put us on the second place considering liquidity of L2 exchanges, and even much better then Uniswap!

I hope you understand better now how these things work, I wouldn’t have issues swapping the amounts you mentioned on Nash, but I personally would always use limit orders when it comes to 50K USD trades, doesn’t matter if they are performed on Nash or Binance.


Thank you for the assistance. :+1:

Thanks for your detailed reply. It makes sense and I am confident to use the Nash platform for this exchange.

Just to clarify one thing. If say I wanted to exchange 2 BTC for USDC, it would be advisable to create a limit order on the ‘advanced’ exchange, as opposed to using the swap, just to obviate the small possibility of any slippage? Because the MMs operate on the advanced exchange, the order is as likely to fill if placed at the same price as the offered swap price. (The draw card of the swap for me is the instant fulfillment.)

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The “swap” function just creates a limit order on the exchange close to the current price (at or near the tip of the order book). It’s not a separate exchange from the “advanced” exchange, just a different UI that makes it easier to create an appropriate limit order.

There won’t be any slippage beyond the level of the limit order created by the swap function. It’s not a market order. Depending on the size of your order, you may have to wait a little for all of it to fill, but given the amounts you are mentioning, those should be covered by the market makers quickly.

It’s not a separate exchange from the “advanced” exchange, just a different UI that makes it easier to create an appropriate limit order

Perfect, thanks! I misunderstood the feature initially. :+1: