Why did I get less crypto than I paid for?

When you go through the details of a transaction you’ve made, some of your calculations might not add up. You might think you should have received more crypto based on the exchange rate and the amount you spent. A forgotten or misunderstood component of that calculation is the service charge.

Let’s take a closer look at how Luno’s instant buy and sell transactions work, so you’ll have a clearer understanding of what exactly you paid for.

An example: Buying crypto with fiat

For this example, let’s say you bought Bitcoin (BTC) using South African Rands (R) as your local fiat currency. You paid R1,000 to buy BTC 0.00090703, and the price of Bitcoin at the time was R1,080,870.

When you look back at the details of that transaction, here’s where some confusion might arise:

Where’s the “missing” crypto?

In this example, R20 worth of crypto went towards the service charge (2% of the amount bought).

The correct calculation: first add the amount you bought plus the service charge, then multiply that total by the quoted price. This would amount to the full R1000 spent in the above transaction.

It could also be helpful to see exactly how different types of buy and sell transactions take place, step by step.   

Step-by-step breakdowns

Buying crypto, you say the amount you want to spend

This is the same scenario shown in the example above.

Here’s what happens:

1. You say the amount you want to spend (R1,000 in this example)

2. Luno fetches the rate for crypto/fiat and we present that quote to you

3. If you accept, Luno buys R1,000 worth of crypto at the rate shown in the quote

4. You keep 98% of that crypto (approx. R980)

5. Luno keeps the other 2% as a service charge (approx. R20)

Buying crypto, you say how much crypto you want to buy

In this example, let’s say you want to buy 100 XRP, and the service charge in your country is 1.5%.

Here’s what happens:

1. You say the amount of crypto you want to buy (XRP 100)

2. Luno fetches the rate for buying XRP 100 plus 1.5% (totalling XRP 101.5)

3. We present the rate and the total cost to you

4. If you accept, Luno buys XRP 101.5 with your funds, and you get XRP 100

5. Luno keeps the remaining XRP 1.5 to cover our 1.5% service charge

Selling crypto, you say how much you want to get for it

In this example, let’s say you’re a Nigerian customer and you want to get ₦10,000 by selling some ETH.

Here’s what happens:

1. You say you the amount you want to receive (₦10,000)

2. Luno gets the rate for ₦10,200 (the amount + 2% service charge)

3. We present that rate to you

4. If you accept, we sell ₦10,200 worth of ETH from your wallet, and you get ₦10,000 while we keep ₦200 in crypto

   • Alternatively, if you only had ₦10,000 worth of ETH in your wallet, we’d keep ₦200 from that, and you’d get ₦9,800

Selling crypto, you say how much crypto you want to sell

In this example, let’s say your Cardano wallet balance is ADA 100 and you want to sell the full amount. The service charge in your country is 2%.

Here’s what happens:

1. You say the amount you want to sell (ADA 100.00)

2. Luno gets the rate for selling ADA 100.00 and presents that to you

3. If you accept, you get ADA 98.00 in your local currency (based on the rate Luno got for the whole amount of ADA 100)

4. We keep the remaining 2% in crypto

What’s the service charge for?

When you buy or sell crypto using your Wallets screen (also known as Instant Buy/Sell), you’re provided with a user-friendly interface to complete transactions quickly.

This method of buying crypto also guarantees that:

• You can buy the full volume of crypto you asked for

• The full volume of crypto you want to buy will be settled immediately with you when you accept the quote

• The price you are quoted is valid for 60 seconds, even if the actual market price moves during that time

To provide you with an instant transaction that includes all these guarantees, the service charge is factored into the pricing, based on current market conditions. It’s up to you to decide if you want to accept the price offered or not.

Other ways of buying and selling crypto

If the Luno Exchange is available in your country, you can make exchange orders instead of using Instant Buy/Sell. These orders cost less, but provide fewer guarantees.

Limit orders

The cheapest way to buy and sell crypto on Luno. This method allows you to specify the price at which you want to buy or sell. You have full control of the price, but there is no guarantee that your order will complete. If the price of crypto changes while you’re making your order, there might be no one willing to buy or sell at the price you wanted.

Market orders

You specify the amount (volume) of crypto you want to buy, and the price is determined by the available orders on the exchange at that time. Market orders ensure that your order will execute, but there’s no guarantee on what price you pay, as this is determined in real-time by the market. Also, your market order might not execute for the full volume you want to buy or sell, which happens when you try to trade more crypto than is currently available on the exchange.