I think there could be a potential problem on two fronts because the rates seem to vary way beyond 0.25% certainly for the BTC-ETH rate I checked. The other is the fact that ShapeShift have implemented KYC so what happens when an Exodus user wants to exchange say 1 BTC to ETH and it triggers a KYC request from ShapeShift?
What happens to the 1 BTC, is it stuck in limbo until/unless ID documents are sent? If they are required, who are they sent to?
What happens to the 1 BTC, is it stuck in limbo until/unless ID documents are sent? If they are required, who are they sent to?
My answer was about how much money Exodus is making from ShapeShift's partnership. It's unclear how much ShapeShift are making, but they're claiming they have the best rates, not sure how accurate that is as I haven't used them that much.
You also have Changelly (used by multiple wallet providers as well) which apparently, charge a flat 0.5% fee. Read this article[1] for more info about the two.
As for the KYC, these tweets[1][2] should answer your question.
[1] https://blockonomi.com/changelly-vs-shapeshift/
[2] https://twitter.com/exodus_io/status/773149923776659457
[2] https://twitter.com/exodus_io/status/1037256494390104069
According to the chat I had with them a little while ago they do not use shapeshift anymore, they use: changelly/changenow (which I would never trust), faa.st, coinswitch and switchain
And they also stated something very important. They confirmed in "some cases" their third-part associate did ask for KYC and they stated they had no idea if funds would be returned to the user wallet if the user declined to provide KYC. They cited the above exchanges and asked to check their TOS. That answer simply is not good enough.
Theoretically it means once an exchange is being requested there is no warning that the following will trigger a KYC request.
Once that request is triggered, there is no information about what will happen to those funds as it is expected KYC will be sent to the third party processor. There is no information provided what the third party processor will do if the user declines to send the KYC therefore leaving funds in limbo with no guarantee they will be returned to the wallet.
(In my case I would never provide my ID to any online exchange unless it was for FIAT withdrawal purposes and only with a reputable exchange)
