Good question - we make money by selling Bitcoin for slightly higher than we buy it from a few sources. We aim to have very competitive prices (lower than many places you can buy Bitcoin today), but we don't have a set fee rate that we publish.

So if I understand correctly, the business model is to be the only seller in this exchange, with a profit margin justified by the convenience of instantly available Bitcoin funds.

Would it not be possible for a competitor to undermine this business model by running an exchange (based on the same technology, perhaps the same implementation) where selling is more permissive?

When we add Bitcoin sales, it will look more like what you're describing. We've experimented with an open orderbook model in the past, and we're not opposed to it, but we've found that the UX of a listed price is better for most users.

Why are Coinbase fees 1% or more while Coinbase Pro fees are 0.25%? Because noobs don't want to see an order book and hiding the order book from them is worth real money.