𝐂𝐫𝐲𝐩𝐭𝐨 𝐄𝐱𝐜𝐡𝐚𝐧𝐠𝐞 𝐅𝐞𝐞𝐬 𝐄𝐱𝐩𝐥𝐚𝐢𝐧𝐞𝐝
After carrying out a transaction, you noticed there's a reduction and you asked yourself, why is the amount I received different?
Well welcome to exchange fees, an exchange isn't usually a free marketplace, different actions can come with different costs. So let's get started step by step.
𝟏. 𝐓𝐫𝐚𝐝𝐢𝐧𝐠 𝐅𝐞𝐞𝐬
This is the fee associated with buying or selling on the exchange, for example, you buy BTC using a BTC/USDT trading pair.
The exchange may charge a percentage of the trade value and the exact fee depends on the platform and can vary based on things like:
• Your trading volume
• Account level
• Trading pair
• Whether you're a maker or taker
• Discounts offered by the exchange
So don't assume everyone pays the same rate.
𝟐. 𝐌𝐚𝐤𝐞𝐫 𝐕𝐒 𝐓𝐚𝐤𝐞𝐫
These terms sound complicated, but the idea is fairly simple.
• A Maker generally adds liquidity to the order book by placing an order that isn't immediately matched.
• A Taker generally removes liquidity by executing against an existing order.
Exchanges may charge different fees for each, this is why you might see something like:
• Maker: X%
• Taker: Y%
The exact percentages depend on the exchange.
𝟑. 𝐖𝐢𝐭𝐡𝐝𝐫𝐚𝐰𝐚𝐥 𝐅𝐞𝐞𝐬
You decide to move your crypto from the exchange to your personal wallet.
That's a withdrawal and the exchange may charge a withdrawal fee.
This is where beginners sometimes get confused:
• Trading fees and withdrawal fees are NOT the same thing.
You can complete a trade successfully and still pay another fee when moving the crypto off the platform.
𝟒. 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐅𝐞𝐞𝐬
Now we're getting into blockchain territory, when you make an on-chain transaction, the blockchain network itself may require a transaction fee.
This is separate from the exchange's own trading fee and it depends on the network, which may be called:
• Gas fee
• Network fee
• Transaction fee
The amount can vary based on the network and transaction conditions.
𝟓. 𝐃𝐞𝐩𝐨𝐬𝐢𝐭 𝐅𝐞𝐞𝐬
Some exchanges or payment methods may charge fees when you deposit funds, others may not but it always depends on:
• The exchange
• The asset
• The payment method
• and your location
Always check before depositing.
𝟔. 𝐒𝐩𝐫𝐞𝐚𝐝
Here's one thing many beginners don't notice. The spread is the difference between the price at which buyers are willing to buy and sellers are willing to sell.
For example:
• Best buyer: $99
• Best seller: $100
The difference is the spread and sometime, crypto interfaces do incorporate a spread into the quoted price.
So don't judge the cost of a transaction by the trading fee alone.
𝟕. 𝐒𝐥𝐢𝐩𝐩𝐚𝐠𝐞
Remember our early discussion? Slippage is the difference between the expected price of a trade and the actual execution price.
It can happen when prices move quickly or when there isn't enough liquidity at the price you're expecting. This is particularly important when using market orders.
Before using an exchange, look beyond trading fees, check everything below
• Trading fee
• Withdrawal fee
• Deposit fee
• Spread
• Network fee
• Possible slippage
Because the cheapest-looking fee isn't always the same thing as the cheapest overall transaction.
One more thing, be careful with platforms advertising: ZERO FEES!
Zero trading fees can mean different things depending on the product and how the platform makes money.
Read the actual fee schedule, don't let a giant 0% banner do your research for you.