Crypto trading is an avenue that gets pretty expensive as you go, accruing fees over time until they add up to something substantial. While these fees won’t break your bank and put you out on the street, they don’t exactly help out your bank balance. On average, a crypto trade charges a standard 0.25% fee for both takers and makers.
While that may not sound like much, it accumulates – which is why transaction fees are a significant part of deciding which exchange you want to roll with. In this cutthroat, dense market, some platforms are trying to go against the grain by offering very low or no-fees transactions, along with a wide range of features, without any extra costs. Before we can talk about no-fee crypto exchanges, though, we need to understand all the types of fees.
Different Types of Crypto Exchange Fees
- Maker Fees
Moat big platforms employ a maker-taker fees system. Maker fees are generally charged to makers- someone who makes an order in the order book that another trader can fulfill. These maker fees help bring liquidity to the marketplace, which is why exchanges prefer them. Because of this, makers are usually charged less than takers. Some exchanges, like Coinbase and Binance, however, keep maker and taker fees equal. On average, most maker fees are about 0.15% of the transaction.
- Taker Fees
Takers are the ones who take orders from the order book and try to complete them, consuming the liquidity that was provided by the initial order. Because they remove liquidity from a platform, takers are not as enthusiastically favored by them, which is why most will charge them a higher fee than makers. On average, most taker fees are about 0.25% of the transaction.
- Spread Fees
Instead of following the maker-taker system, some exchanges employ the structure of charging spread fees. Spread fees are calculated by the difference between the cost of a token and the amount a user pays to buy or sell it. The average spread rate is comfortable, somewhere around 0.5% on average.
Some exchanges go above and beyond, charging maker-taker and spread fees for the same transaction. Like a mosquito, they’ll try to bleed you dry. Coinbase and Swyftx are the first ones that come to mind.
- Gas Fees
Gas fees are exclusive to the Ethereum blockchain. Due to its sheer popularity, however, you will likely come across these fees sooner than later.
Users are essentially paying for the computing power needed to run these blockchains because Ethereum does require monstrous amounts of computing power. While Solana and other networks also have gas fees, they are nowhere near as high as Ethereum, sometimes amounting to hundreds of dollars for one transaction.
- Withdrawal and Deposit Fees
Sometimes, the need may arise to withdraw your cryptocurrency from your digital wallet. You may think it shouldn’t cost anything to take money out of your wallet, but that’s not always the case—some exchanges like Gate.io and KuCoin usually charge you a fee for withdrawing crypto. When you are charged, the amount usually depends on the type of currency withdrawn, making this fee seem much more complicated.
Deposit fees are the least common on this list, but they are still present and vary depending on the type of deposit.
With all the different fees out of the way, let’s discuss which exchange is the best for being the lightest on your pocket.
The Cheapest Platforms
There are more than 300 crypto exchanges specialized in cryptocurrency trading only. There are around 5000 cryptocurrencies in the market right now. With such a vast amount of exchanges, it’s challenging to know which one reigns supreme. Today, we’ll try and figure that out.
Binance
Binance is currently the world’s largest and most traded crypto platform. Recently, the company removed trading fees for 13 stablecoin and fiat combinations. And although the exchange isn’t completely zero-fee with a standard rate of 0.015% to 0.1%, it’s pretty close. The sheer volume of trades, users, and the choices in currency make up for the marginal fee.
ByBit
By Bit has a standard fee of 0.05%, with a 0 Maker Fee option. It’s a wildly popular and well-established derivatives trading platform and is currently one of the top-rated margin exchanges.
ByBit is currently the latest platform to introduce zero-fee trading on its spot exchange. While Binance limits that sweet option to some stablecoins and fiat combinations, ByBit has applied the zero-fee structure across its 300+ coins and more than 450 trading pairs.
Phemex
Phemex is an overall excellent crypto trading exchange with zero fees. Having garnered over 2 million users since being founded in 2019, the platform is one of the most popular crypto exchanges.
One of the reasons for its resounding success is its zero-fee spot exchange. When an order is placed, a commission fee is paid and immediately refunded to the user, making it a true zero-fee option. The only caveat is a monthly trading limit on every account, with the ceiling increasing depending on the user’s VIP Level. The levels go from 1 to 10, with a $500 limit at Level 1 and a $10,000,000 limit at Level 10.
KuCoin
KuCoin charges a 0.10% flat fee on regular trades. Add that to zero deposit fees and compare it with the industry standard of 0.25% fees, and you can see the platform tries to do as much as possible to save your wallet some headaches. Founded in 2017, the platform has a large user base and a lot of options, offering more than 700 cryptocurrencies.
The company also recently launched its Instant Exchange, providing zero-fee trading on 26 crypto assets which you can swap into Tether (USDT) or vice versa, free of cost.
Conclusion – Who Comes Out on Top?
If you’re looking for the best crypto exchange, this might not be what you’re trying to find. For those who want to know the best crypto exchange when discussing fees, we feel Binance is the best choice.
While not zero-fee, Binance is close enough. Combining that with the highest liquidity due to the largest number of users and transactions and the sheer number of cryptocurrencies you can trade, Binance is the clear winner.
Disclaimer: This content does not necessarily represent the views of IWB.