Cryptocurrency exchange Seed CX has cut its fees to gain market share as competition piles into the crypto trading space.
Margin compression across the industry is the result of the most popular exchange services become commoditized as crypto usage proliferates.
Fees for takers is down to five basis points from eight bps on the Seed Digital Commodities Market, while makers, who previously traded on the exchange for free, receive one bp rebate.
In an interview, Seed CX co-founder Edward Woodford told CoinDesk that the fee cuts came on the heels of a record $20 million daily trading volume recorded last week, beating out top players Bittrex and Gemini in the league table.
“The new fees will allow us to compete with the deals that the bigger exchanges are making with some of our biggest clients,” he said. “Fees are compressed over the past few months.”
Launched in January, Seed CX provides institutional investors with execution and settlement services. Beside the spot market, the company is also active in the crypto derivatives trading through subsidiaries.
Rather than a multi-tiered fee structure offered by several major exchanges, where traders get lower rate if their transactions reach a certain volume, Seed CX aims to give every participant the best rate possible, Woodford said.
Woodford also revealed that its platform will add several fiat-crypto pairs including euros and Japanese yen, on top of its existing currencies.
Fee compression is already at an advanced stage at Seed CX, while other crypto exchanges still have room to cut, David Martin, chief investment officer at asset manager Blockforce Capital, told CoinDesk.
“The fees are extremely competitive on the lower end,” he said. “I don’t see it getting much lower than what Seed CX is offering today.”
According to Martin, one of the best rates in the market is on Coinbase’s exchange: zero for makers that create liquidity and ten bps to those who take liquidity out of the…