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How to save money on crypto exchange fees

Fees are an unavoidable part of cryptocurrency trading- or are they? Charged by cryptocurrency exchanges on each trade or transaction on their platform, these fees can add up to quite a substantial amount, especially during the bull market when people are actively trading. Therefore, people are eager to find any way to save money on cryptocurrency trading fees, and to maintain competitiveness, many exchanges do offer discounts or perks for their loyal customers. In this article, we take a look at some of the ways in which you can lower or even have no trading fees, and the discounts offered by some cryptocurrency exchanges.

What are crypto exchange fees?

Cryptocurrency exchanges charge customers fees for transactions or trades done on their exchange. Some types of crypto exchange fees include:

Deposit/withdrawal fees

Exchanges are basically a platform for customers to trade cryptocurrencies, so they would need to deposit or withdraw cryptocurrency to the exchange platform in order to use it. Exchanges charge a fee when customers deposit or withdraw cryptocurrencies onto or from their platform.

Trading fees

This is charged by exchanges whenever cryptocurrencies are converted to other cryptocurrencies or fiat, and vice versa.

Most popular exchanges such as FTX or Binance charge trading fees based on a maker/taker structure with taker fees being higher than maker fees. Takers are when the user places an order that is able to trade immediately (whether partially or fully) before it enters the order books. They are known as “takers” because they “take” volume from the order books. On the other hand, maker fees are charged when the user places an order that goes onto the order book (whether fully or partially) i.e. “making” the market.

Interest/Borrowing/Liquidation Fees 

These fees are charged when users are involved in margin trading i.e. borrowing funds to increase your position. The amount of these fees usually depends on the amount borrowed on margin together with an interest rate. Margin trading however is very risky, and one of the reasons for this is because if the trade does not go your way you would become liquidated. When this happens exchanges also charge a liquidation fee.

VIP programs

Exchanges usually offer exchange fee discounts for their frequent users. This is usually based on a VIP tier structure where frequent users (based on their trading volume over 30 days) can qualify for higher VIP tiers which entitle them to cheaper fees. The requirements for the VIP tiers and discounts offered differ between exchanges.

Binance’s VIP program requires users to have a certain trade volume over 30 days and have a specified balance of their native token known as Binance Coin (BNB). For the first VIP tier, users must have a trading volume of 50 BTC or more and hold 50 BNB or more. Check here for more details.

Binance VIP tiers
Binance VIP tiers (Image credit: Binance)

FTX Exchange’s VIP program is geared towards professional or high-volume users. To qualify for the first VIP lever, users must trade an amount equal to or over 0.5% of all of FTX’s trading volume over 30 days. Check here for more details.

FTX VIP tiers
FTX VIP tiers (Image credit: FTX)

HOWEVER, new users can get 5% off trading fees by clicking our EXCLUSIVE link below without any trade volume requirements.

Coinbase does not have a VIP program. However, Coinbase charges a fee for withdrawing from their platform and for transactions. The fees are calculated based on several factors such as the payment method, size of order and market conditions etc. The amount of such fees will be disclosed at the time of the transaction. Learn more about Coinbase fees and how you can avoid them.

Kraken does not publicise their VIP program but users can email them to enquire about their Account Management services.

Exchange token discounts

Many exchanges have their own native token, and holding their token entitles users to discounts.

FTX exchange’s native token is FTT. FTT token holders can enjoy rebates on trading fees and discounts when using their OTC services. The more FTT held, the greater the rebates and discounts. Larger holders can also automatically be promoted to VIP status on the exchange which gives them even lower trading fees as seen above.

FTT fee rebates
FTT fee rebates (Image credit: FTX)

In addition, FTT holders can also receive airdrops of the Serum ecosystem token (SRM). Users will receive 3 locked (1-7 years) SRM for every 500 unlocked FTT held on the exchange with no upper limit. Check here for more details.

Binance Token (BNB) is Binance’s native token. Binance allows users to pay for trading fees using BNB, and by doing so users can get 25% off both trading and margin trading fees, and 10% off futures trading fees.

Woo X for instance also has their native WOO token. Users can enjoy discounts on maker/taker fees by holding as little as 300 WOO tokens, and only 1,800 WOO tokens are required to reach 0% maker and taker fees. The WOO token can also be used for yield farming and as collateral for borrowing and lending on various DeFi platforms. Click here for more details.

Both Coinbase and Kraken do not have their own native token.

Discounts for staking exchange tokens

Some exchanges allow users to stake the native token i.e. to lock the token up for a specified period in return for additional rewards. Some rewards include fee discounts, additional tokens (i.e. yields), increased airdrop rewards and the ability to participate in the exchange’s initial exchange offerings (IEOs).

At FTX, staking FTT token entitles users to maker fee rebates, additional votes, increased SRM airdrops, limited free withdrawals and tickets to participate in their IEOs. The benefits offered increase with more FTT staked.

FTT staking rewards
FTT staking rewards (Image credit: FTX exchange)

Binance also allows users to stake their BNB in their Vault in return for BNB yields. Whilst there are no direct perks for staking BNB, as mentioned previously Binance users get 25% off trading fees when they pay with BNB.

WOO X users are required to stake their WOO tokens in order to enjoy the trading fee discounts mentioned in the previous section. Other rewards for staking include eligibility for airdrops.

Neither Coinbase or Kraken offers staking in their exchange token.

Conclusion

Cryptocurrency exchange fees can add up especially when you are a heavy user. With the many exchanges out there, competition is fierce to attract users since they make money on each transaction you do. One of the major ways to do this is to offer discounts on fees for using the exchange. Most, if not all cryptocurrency exchanges offer discounts simply for frequent or high volume users with tiered VIP programs. Other exchanges such as FTX and Binance are more creative, utilising their native token or having staking programs which boost users’ rewards. At the end of the day, the rewards offered is only one aspect to consider when deciding which exchange to choose, other factors include the number of cryptocurrencies supported and security etc. Intended users, especially those from the US, should also check carefully as some exchanges may have features that are not avaialble to US citizens.

Further reading

FTX Exchange Guide

Coinbase Fees-How to avoid them

Coinbase Review

Binance Exchange Review

Tips and tricks to sae on your Ethereum gas fees

EXCLUSIVE: sign up for FTX and get 5% off trading fees

The information provided in this article is intended for general guidance and information purposes only. Contents of this article are under no circumstances intended to be considered as investment, business, legal or tax advice. We do not accept any responsibility for individual decisions made based on this article and we strongly encourage you to do your own research before taking any action. Although best efforts are made to ensure that all information provided herein is accurate and up to date, omissions, errors, or mistakes may occur. 
Disclosure: Authors are invested in cryptocurrency projects and have cryptocurrency holdings – including those covered on this website. 

Angela Wang
Angela loves cryptocurrency, technology that improves our lives...and food. Anything that merges these worlds together is even better.

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