# Crypto ATM vs Swapbox : What's the difference ?

**Published by:** [Swapbox](https://paragraph.com/@swapbox.truelevel/)
**Published on:** 2022-11-30
**URL:** https://paragraph.com/@swapbox.truelevel/crypto-atm-vs-swapbox-what-s-the-difference

## Content

Crypto ATMs have seen exponential growth In the recent years, we have seen an exponential growth of crypto ATM. If they are well located, it can be a very profitable business, and useful for customers. But current crypto ATMs are expensive, rely on third parties, and don't offer a lot of flexibility. The operators have to manage the liquidity, they are limited on the tokens they can offer to their customers and need a lot of capital to start with. This results in poor experience for the customers : the fees are expensive (often reaching 15% !) and they can only buy major old coins like LTC or BTC. In this article, we will compare Swapbox and other crypto ATM on 5 aspects: liquidity, admin application, volatility & asset risk, capital efficiency, modularity and censorship resistance. Swapbox vs classic crypto ATM : under the hood The problem with liquidity Swapbox is the crypto ATM with the most liquidity, simply because it leverages liquidity from a decentralized exchange. Users get access to thousands of tokens at the best prices, and the operators doesn't have to manage multiple inventory : He's simply providing stablecoins and cash. Self sovereign admin dApp Swapbox admin app is an open source decentralized app, which can be self-hosted. It includes all the features the operators needs to manage his machines : smart contract settings (fees config, token lists), detailed analytics, status, diagnostics. Volatility and asset risk Operating an ATM is like providing liquidity to a DEX. The operator provides cash and crypto, and let people trade the one for the other. For the operator, there are two main challenges: **Exposure to the asset he's LPing **In order to become an LP, on a traditional crypto ATM, the operator needs to hold the token being bought or sold. This means he either is exposed to the price of this token, or has to pay interest if he decides to borrow it. With Swapbox, the operators can provide liquidity to thousands of coins and tokens without having to worry about inventory risks or volatility : he simply provides stablecoins to his machine's smart contract and deposits cash into the Swapbox. What if the operator wants to be exposed to the price of the assets instead ? He can borrow the stablecoins against his assets as collateral! Obviously, this involves the risk of liquidation of his assets. **Rebalancing **The data shows that ~80% of crypto ATM volume is BUY transactions. This means that the operator needs to constantly rebalance his cash surplus to the crypto he's selling. To do so, he has a few possibilities : Deposit cash to a bank → wire transfer to an exchange → buy crypto → send to the wallet Rebalance between multiple ATMs Adjust fees to incentivise rebalancing. We designed a simple but effective customisable dynamic fee model. Buy and sell fees are adjusted in function of the inventory of cash and stablecoins in the machine. When the inventory is getting close to being full in cash, it becomes more expensive to buy and cheaper to sell, and vice versa. Swapbox dynamic fees model example Capital efficency of crypto ATMs As we have seen above on volatility and asset risk, the operator of a classic crypto ATM needs at least 3 times the maximum trade size he wants to offer locked: 1x in the machine, 1x in a wallet and 1x on a centralized exchange, in order to hedge against asset volatility. With Swapbox, an operator only needs 2x the max trade size locked: 1x in the machine and 1x in a smart contract, all in cash and stablecoins. This means that an operator can offer 50% more liquidity when opting for Swapbox. Profitability example Let's compare two situations where Bob wants to start an ATM business. Lets says that the figures for an ATM at his location are the following : $200'000 volume per year, 5% fees, 80% of volume is buy. **Bob with a classic crypto ATM **Cash rotation per month : ($200’000 * 80%) / 12 = $13’333 Total inventory required : $40’000 ROI (not accounting the ATM purchase price): $10’000 / $40’000 = 25% **Bob with Swapbox **Cash rotation per month : ($200’000 * 80%) / 12 = $13’333 Total inventory required : $13’333 x 2 = $26’667 ROI (not accounting the ATM purchase price): $10’000 / $40’000 = 37.5% Swapbox capital efficiency vs classic crypto ATM Swapbox offers a win-win situation: the operator can make more revenue, and is exposed to no counterparty risk. Modularity Swapbox is fully open source, so anyone can fork the smart contracts, develop plugins, or customize their own hardware. The possibilities are endless (vending machines, silver/gold bar dispenser, etc) Censorship resistance Your Swapbox isn't connected to any server, exchange or bank. All software can be self-hosted and hardware parts are available all around the globe. As long as your Swapbox is connected to a blockchain and a DEX, it will continue to work. Contribute to Swapbox There are many ways you can contribute to the project. To stay in the loop, make sure you follow us on Twitter. If you are a dev willing to help, you can join our Telegram Dev group. You can help us financially by donating to our Gitcoin Grants, or simply visit our website.

## Publication Information

- [Swapbox](https://paragraph.com/@swapbox.truelevel/): Publication homepage
- [All Posts](https://paragraph.com/@swapbox.truelevel/): More posts from this publication
- [RSS Feed](https://api.paragraph.com/blogs/rss/@swapbox.truelevel): Subscribe to updates
- [Twitter](https://twitter.com/SwapBoxCash): Follow on Twitter