First things first. Steem/Pkr Exchange is not a business. It is a service aimed at facilitating withdrawals from Steemit wallet. It has not conceived and established to earn money. It is definitely a scheme to loot people.
Steem/Pkr Exchange is the brainchild of Ilyas Tarar (I'm @ilyastarar here). You can visit the blog to know about the creator and see what kind of a person I am. I tested and tried every available method but withdrawing or even buying crypto in Pakistan is no fun.
Exchanges are expensive because they are businesses having commissions. Most local exchangers are greedy looters because they know people do not have another option (yet) so they quote you outrageous exchange rates.
With all that experienced by me, I started thinking of a solution. Steem/Pkr Exchange is that solution. I wanted to document the whole formula of how we calculate the exchange rates so that everything remains transparent and our users can cross check rates with the help of these simple yet important steps.
How Exchange Rates are Calculated?
Since Steem and SBD are coins listed on crypto exchanges, our exchanger has to do multiple calculations before quoting an exchange rate. Those calculations are explained below.
Let's begin.
Step # 1 : Calculating BTC Value of Steem/SBD on Bittrex
Bittrex.com has the highest trading volume of Steem and SBD and therefore offers the best rates. Other exchanges like Poloniex are not reliable or do not have enough volume. Bittrex is the best choice.
To calculate Steem/SBD value in Bitcoin (Satoshi), the exchanger enters the amount of Steem in the selling area with last sell price. It gives the total value of Steem/SBD in Bitcoin.
For example, @ahsansaeed successfully sold 133 Steem to withdraw Rs. 42,616 in his bank account. Let's take this as example and see how the final amount was calculated.
By filling the Sell Steem fields, the exchanger gets the amount of Bitcoin it equals to. You can see below that 133 Steem equalled to 0.03078549 BTC at the time of trade.
That's the BTC amount exchanger will get when he sells 133 Steem
After calculating the BTC value, price of Bitcoin amount in USDT is calculated.
Note:- USDT (Tether) is a currency listed on most exchanges which remains equal to $1.00 but can show a negligible variation when demand drastically changes. Why USDT is chosen is an important question and will be answered later in this post.
Step # 2 : Calculating the USDT value of Bitcoin Amount
The BTC amount determined through step # 1 is then converted into USDT. By default, when you sell Bitcoin on an exchange which does not have a fiat gateway, like Bittrex, you get USDT and they are stored in local wallet jist like other coins. In the example trade, 0.03078549 BTC was equal to 393.9 USDT.
The price started sudden fluctuations and went below 12,700 before recovering to 12,830 USDT.
With USDT amount known, it's time to convert USD to Pakistani Rupees.
Step # 3 : Converting USDT to Pkr
USD Dollar to Pakistani Rupee exchange rate that day was 110.6 Pkr but USDT was trading a little higher than $1.00 so an exchange rate of 112 Pkr was offered per USDT (the higher the better).
Since total amount of USDT was 393.9 and USDT/Pkr rate was 112 Pkr...
393.9 x 112 = 44,116.8 Pkr
This was simple
After calculating the total converted price in Pkr, the next step involves calculation of service charges.
Step # 4 : Deducting Service Charges
This is the last step for finalization of total Pkr amount to be sent to the user by the exchanger. Why service charges though? To answer this, consider following:-
The exchanger converts all the Steem/SBD received to Bitcoin and then to USDT. It involves minor transaction fees.
When he himself is to cashout what you gave to him, he'll have to spend $15-20 as transfer fee to move his BTC to another wallet address (where he would sell for cash). Service charges include just a fraction of that fee.
When he transfers your amount to your account, he charges nothing as transfer fee. That fee is included in the service charges and is not separately charged. You must have an account (bank, JazzCash, EasyPaisa) to avail this waiver. Sending on CNIC via EasyPaisa etc is not free.
Not to forget that he is providing you a service and deserve a very small percentage as facilitation charges.
That's why service charges are deducted at the rate of 5 % for amounts upto 30,000. Because...
Upper limit of service charges is Rs. 1500, which means that amounts exceeding Rs. 30,000/- can be withdrawn by paying a fixed amount of Rs. 1500. The limit has been placed to make the higher transaction cheaper because 5 % on 100,000 is 5000 which is a big amount and we do not wish to charge such a big amount as service charges.
We are not looters. Our exchanger is honest and has no greed. That's why this exchange is unmatchable and you won't get better rates anywhere else. Coming back to the example trade; since the amount exceeds Rs. 30,000, therefore Rs. 1500 are deducted as service charges.
Final amount is Rs. 42,616 which was sent to user's account.
The exchanger like proper amounts so Rs 42,620 was sent
And then I received confirmation from @ahsansaeed too.
Trade is complete
Important Note
Steem/Pkr Exchange or its owner/creator/administrator ( @ilyastarar ) does not take a penny in fees, chagres or commission. All the service charges are kept by the exchanger for providing the unmatched service.
Important Information
Please note the following for information.
Steem/SBD rates are prone to fluctuation so you will get current rates at the time of trade.
Bitcoin's price keeps fluctuating so it can go high or low within seconds of Steem/BTC rate determination. Current rates will apply at the time of trade.
USDT to Pkr rate will be determined by that day's USD/Pkr exchange rate. Nothing will be deducted from the conversion rate.
If you wish to get EasyPaisa transfer on your CNIC, transfer fees will be deducted from your amount. Free transfer is only for account to account transfers.
Always get your invoice and confirm receipt of money as well closure of trades on @steempkrex updates which will be posted regularly.
Always know and convey your correct remaining limit in JazzCash and EasyPaisa etc.
It's financial dealing so always be careful and professional. Wrong bank account information will lead to delay or even loss.
That's it. I hope everything is clear now and you are able to understand how the exchange rate is determined.
Join Steem/Pkr Exchange
Click the link below to join the Steem/Pkr Echange. Also, resteem and let your Steemian friends know by giving them link to this post.
