Crypto Fees

Fees in crypto are regularly referred to as either exchange fees (a.k.a. trading fees) or network fees.

Crypto Fees

Why is crypto charging fee?

Fees in crypto are regularly referred to as either exchange fees (a.k.a. trading fees) or network fees (a.k.a. gas fees). Since there is nothing free in this world, an intermediary such as exchange takes a small fee for its services while the network fee is customary and can be treated as electricity cost for the transaction. Both fees are mostly unavoidable but we can somehow minimize the cost by choosing the right platforms suited to your trading preference.

How are crypto fees calculated?

Fee calculation is pretty straightforward, some intermediaries may take an exchange fee which can be varied slightly. However, the network fee is a bit hard to calculate since there are many variables to determine it. Still, it can be roughly measured. Let’s see how these fees work in detail.

Exchange fee

The exchange fee is collected from traders by intermediaries in the crypto world such as “Centralized exchange”, “Decentralized exchange”, or even “DEX aggregator”. To be precise, cryptocurrency exchanges provide their services to traders in exchange for a small fee collected from every transaction made. Most fees are collected at the rate of 0% - 1.5% per transaction. The rate is usually varied depending on whether you are a buyer or a seller.

Network fee

Because cryptocurrency is operating on blockchain technology, a small fee is collected as compensation for the resources used to validate any transactions or actions on a blockchain. This is also known as the “gas fee”. The price of the gas is highly volatile and dependent on “block time” and “transaction throughput”. Simply put, lower block time and higher transaction throughput result in a cheaper gas fee. There are also some options when it comes to crypto with the lowest gas fee, for example, BSC costs around 1US$ per trade while some others, like Bitgert, have recently announced zero gas fee on their project.

Do all crypto exchanges charge fees?

There are definitely some exchanges that are commission-free, for instant, BlockFi and Uphold. However. Please take into consideration the credential and services provided by these exchanges since it sometimes pays off to pay a little bit more and get better rate for your trades. Also, some exchanges might charge traders a deposit fee and withdrawal fee which are additional costs that have to be mindful of. To get the best out of this, traders might have to do a crypto fee comparison table of their own.

Which crypto exchange has the lowest withdrawal fees?

Most exchanges charge withdrawal fees differently based on the tokens. Traders might have to do a little research before moving their assets into non-custodial crypto wallets (DeFi crypto wallet) or withdrawing tokens into traditional fiat money to their bank accounts. Some tokens might cost zero withdrawal fee while some others might cost a few US$ to do so.

In some cases, converting the token into others that cost less or non-withdrawal fee before withdrawing can save you the cost. But you do need to compare the rate before such an attempt that it’s truly beneficial to you.

How do you avoid paying large crypto fees?

The first thing you can do to minimize fees is to do your own research. Since there is no crypto fees calculator available, scanning through the policies of those exchanges and understanding them thoroughly will grant you an insight of what is the best place to trade your particular tokens since the rates are varied all over.

Then, upon acquiring the aforementioned knowledge, choose the platform that charges the lowest crypto transaction fees or compensates the fees back into other types of benefits to users. This gives you the edge over trading if it’s done right.

To give you a big tip, Arken Finance is a trading platform on a Defi space that allows you to trade with a 0.1% exchange fee. Compared to other platforms, this is considered very cheap. Additionally, it has Stop-Limit order which grants users the ability to specifically buy or sell their tokens at the targeted price. For this feature, Arken generously exempts gas fees and takes only a maximum of 0.25% as an exchange fee. The base fee for using the Stop-Limit feature is variable, based on the day of the week and the time of the day, with weekends and specific off-peak hours. This is due to the gas fee of the network for operations. Normally, Arken collects a fee that covers the gas fee and reserves a small amount contingent upon some fluctuations.