Exchange

Most mobile and desktop wallets, like Edge, Lobstr, Exodus & Cake, offer a built-in exchange functionality with which you can exchange cryptos within the the familiar interface of the wallet.

Should you use this feature of the wallet?

Here are the pros & cons in our opinion:

Pros:

  • Convenient and easy

Cons:

  • High exchange fees comparing to online exchanges. The fees usually start from 5% or more per transaction (buying and selling)
  • Some wallets are Custodial, which means that they hold the cryptographic keys of the assets, which means that they actually own the assets, not you.  See Crypto Rule Number One: Not Your Keys, Not Your Crypto
  • If you exchange within a Self-Custody (Non-Custodial) wallet, you may need to provide your details to use the exchange functionality (due to KYC requirements). It means that you are exposing your ownership of the wallet, and that may cause a privacy issue (if you care about your privacy that is)

As you can see above, we could find only one benefit of using the built-in exchange feature of a wallet.

We prefer using an online exchange because of the much lower fees and that it's not associated with our non-custodial wallet (for better privacy).

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