BitShares Forum
Main => General Discussion => Topic started by: Akado on February 24, 2016, 08:13:20 pm
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http://www.coindesk.com/gemini-exchange-new-trading-fees/
Winklevoss writes:
"We have decided to adjust our existing flat fee schedule to a real-time, dynamic maker-taker fee schedule."
Adopting the maker-taker fee system is aimed to encourage 'makers', who add liquidity to the exchange, which offers a BTC/USD market aimed at institutional investors.
Cameron Winklevoss explained that because liquidity-making orders do not fill immediately and they bear more market risk, the company "believes in offering greater incentives to makers".
To kick off the promotion, the new schedule will be available to all Gemini users for 30 days, during which traders will receive a 0.15% rebate on all liquidity-making trades and be charged 0.15% on all liquidity-taking trades.
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A lot of BTC exchanges offer maker/taker, so despite criticisms it is probably reasonably effective.
NBT appears to achieve its liquidity partly by offering a daily maker subsidy of 0.24% https://nubits.com/current-liquidity-pools
However they still have centralized exchange fees to overcome.
While the DEX could offer a daily maker subsidy of 0.24% & hopefully be able to achieve similar results. (Minimum $80k daily liquidity for $200) but with the added benefit of low/no trading fees which is even better & perhaps why NSR are funding development of their own exchange as well :)
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Please keep in mind that centralized exchange can do front running easily. So it doesn't change much if adopt maker/taker strategy.
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Please keep in mind that centralized exchange can do front running easily. So it doesn't change much if adopt maker/taker strategy.
My point was, since exchanges implement this, it might be a proven model right? Otherwise they wouldn't do it. They do because it works. And that matters to us because that is something we've been discussing lately
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Please keep in mind that centralized exchange can do front running easily. So it doesn't change much if adopt maker/taker strategy.
My point was, since exchanges implement this, it might be a proven model right? Otherwise they wouldn't do it. They do because it works. And that matters to us because that is something we've been discussing lately
Yes, maker/taker model works. It's also easy to understand and easy to implement. But you're also limited in terms of how much incentive you can offer MMs since you can't reward them more than the taker is paying. And you don't want to raise fees on the taker just to increase the maker reward, because then you disincentivize takers. So for it to work, you have to set reasonable taker fees and realize you can't reward makers any more than that without subsidized rewards such as in the Nasdaq scheme.
There's definitely a place for both. For example, subsidizing rewards on BitAssets will require funding via a worker proposal. We may not want to fund such rewards for ALL BitAssets, perhaps only one or a small handful at a time (at least initially). But of course we may still want to offer incentives via maker/taker. Same with UIAs. An issuer may want to run maker/taker on one market, but subsidized rewards on another. We should have both options in our arsenal. We would need to understand the development costs of each before making an intelligent decision about which to do first, or whether to do them both (or neither, for that matter).
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Please keep in mind that centralized exchange can do front running easily. So it doesn't change much if adopt maker/taker strategy.
My point was, since exchanges implement this, it might be a proven model right? Otherwise they wouldn't do it. They do because it works. And that matters to us because that is something we've been discussing lately
Yes... it makes sense to utilize models that work. Why reinvent the wheel?
Where is the 'just do it!!! +5% +5% +5%' guy when you need him?! :)
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Please keep in mind that centralized exchange can do front running easily. So it doesn't change much if adopt maker/taker strategy.
My point was, since exchanges implement this, it might be a proven model right? Otherwise they wouldn't do it. They do because it works. And that matters to us because that is something we've been discussing lately
Your point is no problem.
My point is how exchanges make profits when they adopt maker/taker mechanism which looks like a zero fee schema. Users will think it's a free offer, but actually it's not. Cost for users gets hidden, revenue of exchanges become publicly non-transparent.
How a DEX do that without losing money?
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Please keep in mind that centralized exchange can do front running easily. So it doesn't change much if adopt maker/taker strategy.
My point was, since exchanges implement this, it might be a proven model right? Otherwise they wouldn't do it. They do because it works. And that matters to us because that is something we've been discussing lately
Your point is no problem.
My point is how exchanges make profits when they adopt maker/taker mechanism which looks like a zero fee schema. Users will think it's a free offer, but actually it's not. Cost for users gets hidden, revenue of exchanges become publicly non-transparent.
How a DEX do that without losing money?
Unlike a regular exchange that only generates revenue from trading fees, BTS is unique in that you need to purchase shares of the company (BTS) to participate in the DEX. So while we're in the DEX growth phase, you can actually charge no fees and still see BTS value increase through new BTS demand. In fact while it's hard to quantify how much that new BTS demand is worth, you can in theory charge negative fees (Subsidize liquidity) but still see BTS value increase through new BTS demand which is how the DEX would be able to possibly offer something like this without losing overall.
There is of course also longer term value in attracting new customers and bootstrapping Smartcoins as well though I tend to be more reserved in spending BTS on purely that outcome for multiple reasons.