Navigating Monero's Exit Route: Understanding Non-Custodial Swaps

For those looking to move Monero (XMR) back into Bitcoin (BTC), the process can be more complicated than sending XMR in the first place. A growing number of centralized exchanges have delisted Monero, forcing users to rely on non-custodial swap services and peer-to-peer trades.

These services offer two types of rate models: fixed-rate and floating-rate. With a fixed-rate model, the service locks in the exchange rate at the time of order creation, absorbing market risk for a short window, usually minutes. On the other hand, a floating-rate model prices the trade when the deposit is confirmed, with the user taking on market risk.

The choice between these models depends on individual circumstances. Small amounts may be better suited to a floating rate, while larger amounts or volatile markets may require a fixed rate. Additionally, Monero's slower block cadence contributes to longer wait times for the XMR-BTC swap, typically measured in tens of minutes.

It is essential to consider the mechanics of non-custodial swaps and be aware that deposits can be held pending review by licensed liquidity partners' automated AML screening. Furthermore, once the BTC arrives on a transparent chain, its output exists in public, exposing the recipient's identity. Therefore, it is crucial to think about the destination address before the swap, not after.