6 Important Crypto Fees Explained & How They Affect You

<p>Cryptocurrency trading is not free. However, being aware of these fees will ensure that you do not lose more than you expect the next time you trade your cryptocurrency.</p> <p>If you own cryptocurrency, you've most likely used an exchange or something similar at least once or twice. Such platforms are extremely popular and useful, allowing people to perform actions such as buying, selling, and staking their money. However, most crypto platforms are not free to use, and there are a variety of fees you may encounter if you use one. So, what are the most common cryptocurrency fees that you might encounter?</p> <p>1. Designer Fees</p> <p>A maker-taker fee system is used by many large crypto platforms, particularly exchanges. Maker fees are a type of exchange fee that, as the name implies, are charged to platform creators. A maker typically places an order in an order book that will be filled by someone else later, rather than immediately. In a nutshell, they "create" the marketplace for other traders. As a result, makers are the best users an exchange can have because they provide liquidity to the platform.</p> <p>In this case, liquidity refers to the ability of a crypto coin to be converted into traditional currencies such as USD or GBP. It is the bread and butter of an exchange that allows them to make a profit. Maker fees are often lower than taker fees because crypto exchanges favour makers, though some exchanges keep both the same.</p> <p>Binance, Bittrex, and Coinbase Pro, for example, keep maker and taker fees equal, whereas other major exchanges like Bitfinex and Kraken charge a higher taker fee (though the difference isn't usually that significant).</p> <p>2. Taking Fees</p> <p>Takers, as opposed to makers, remove liquidity from an exchange platform (which the exchange does not want). A taker will take an order from an order book, consuming or removing the liquidity that was previously offered. When a user places an order, it is instantly matched by another order in the order book.</p> <p>As prev