I think we need to fix the fee structure for trading

[lil_jay890]

Then go trade on a centralized exchange... obviously I am not being clear.  decentralization has costs that are unavoidable for the benefit of 0 counterparty risk.  it is going to cost you money to have a witness process your transaction to put your order on the order books, not only when the trade is successfully filled.  The correct fee has yet to be determined but it will need to be above 0.

It is not your job to tell me where should I go. I go where I think I need to go. Don't be surprised why most people stay on centralized exchanges.

I don't care what you do.  And I can tell you whatever i want to tell you on this forum regardless if its my job or not.  Just trying to answer why there needs to be fee's.  Sorry it's not the answer you are looking for.

[yvv]

Then go trade on a centralized exchange... obviously I am not being clear.  decentralization has costs that are unavoidable for the benefit of 0 counterparty risk.  it is going to cost you money to have a witness process your transaction to put your order on the order books, not only when the trade is successfully filled.  The correct fee has yet to be determined but it will need to be above 0.

It is not your job to tell me where should I go. I go where I think I need to go. Don't be surprised why most people stay on centralized exchanges.

[yvv]

If you are placing and canceling thousands of orders with a bot and doing less than $55,000 of volume then chances are your bot is not effective and is spamming the network.

This is not spamming. This is a competition. With normal competition, there will be few winners who make profit, and thousands of losers who can not make a single trade for days. But you don't want to scare those ammature traders away with fees, because if you do, you'll suppress a competition and your service will go into crap. Loser's loss is a winner's profit. When winners can't make profit, they leave.

[lil_jay890]

It is not only the amount of fee which matters, what are you paying for matters too. It is ok if fancy restaurant charges more then fast food eatery, but I don't know anybody in good mind who would agree to pay anything just for sitting in a restaurant having no food. It is ok to pay $1 fee for a trade which brings you $5 profit, but paying for an offer which was not even filled is ridiculous. It is not physiological, this is common sense.

Paying for an order which is not filled is not ridiculous. Placing an order has costs associated with it and the cost is significant in every trading system. Some systems just have chosen to subsidize this cost by increasing other fees.

And while you don't necessarily profit from an order that isn't filled (you can, by the way, if you're using it as part of some trading methods), you certainly had the opportunity to profit from it.

Taking care of restroom in a fast food place has also associated costs with it, but if they will start charging fees for using their restroom, then good luck in attracting customers.

Most places make you buy something if you want to use their facilities.

In some shitty slums may be so, but in the world where I live they allow me to use their facilities with no conditions, because they know that if I like their place I will buy something from them and come back again. When I come to eatery, I want to pay for food. Washing hands, using toilet, sitting at the table has to be included into price of damn hamburger.  If they don't do this, I turn around and walk away. You have to decide what are you going to be: just another shitty exchange or high quality  service.

The reason why people get "0" fees for trades is because of centralization by your broker.  You actually are getting a raw deal since the broker will expand the spread to make money.  You are trading within their internal pool of funds and stocks... once you go out of their pool, there are costs associated with placing orders.  Because bitshares is decentralized and all transactions are irreversible, you must pay a fee for that work to be done.

There are costs associated with everything. So what? Your costs is not my problem. As you said, I must pay a fee for work to be done. The work is done when the trade is made. Before that, I don't owe you nothing.

Then go trade on a centralized exchange... obviously I am not being clear.  decentralization has costs that are unavoidable for the benefit of 0 counterparty risk.  it is going to cost you money to have a witness process your transaction to put your order on the order books, not only when the trade is successfully filled.  The correct fee has yet to be determined but it will need to be above 0.

[yvv]

It is not only the amount of fee which matters, what are you paying for matters too. It is ok if fancy restaurant charges more then fast food eatery, but I don't know anybody in good mind who would agree to pay anything just for sitting in a restaurant having no food. It is ok to pay $1 fee for a trade which brings you $5 profit, but paying for an offer which was not even filled is ridiculous. It is not physiological, this is common sense.

Paying for an order which is not filled is not ridiculous. Placing an order has costs associated with it and the cost is significant in every trading system. Some systems just have chosen to subsidize this cost by increasing other fees.

And while you don't necessarily profit from an order that isn't filled (you can, by the way, if you're using it as part of some trading methods), you certainly had the opportunity to profit from it.

Taking care of restroom in a fast food place has also associated costs with it, but if they will start charging fees for using their restroom, then good luck in attracting customers.

Most places make you buy something if you want to use their facilities.

In some shitty slums may be so, but in the world where I live they allow me to use their facilities with no conditions, because they know that if I like their place I will buy something from them and come back again. When I come to eatery, I want to pay for food. Washing hands, using toilet, sitting at the table has to be included into price of damn hamburger.  If they don't do this, I turn around and walk away. You have to decide what are you going to be: just another shitty exchange or high quality  service.

The reason why people get "0" fees for trades is because of centralization by your broker.  You actually are getting a raw deal since the broker will expand the spread to make money.  You are trading within their internal pool of funds and stocks... once you go out of their pool, there are costs associated with placing orders.  Because bitshares is decentralized and all transactions are irreversible, you must pay a fee for that work to be done.

There are costs associated with everything. So what? Your costs is not my problem. As you said, I must pay a fee for work to be done. The work is done when the trade is made. Before that, I don't owe you nothing.

[lil_jay890]

It is not only the amount of fee which matters, what are you paying for matters too. It is ok if fancy restaurant charges more then fast food eatery, but I don't know anybody in good mind who would agree to pay anything just for sitting in a restaurant having no food. It is ok to pay $1 fee for a trade which brings you $5 profit, but paying for an offer which was not even filled is ridiculous. It is not physiological, this is common sense.

Paying for an order which is not filled is not ridiculous. Placing an order has costs associated with it and the cost is significant in every trading system. Some systems just have chosen to subsidize this cost by increasing other fees.

And while you don't necessarily profit from an order that isn't filled (you can, by the way, if you're using it as part of some trading methods), you certainly had the opportunity to profit from it.

Taking care of restroom in a fast food place has also associated costs with it, but if they will start charging fees for using their restroom, then good luck in attracting customers.

Most places make you buy something if you want to use their facilities.

In some shitty slums may be so, but in the world where I live they allow me to use their facilities with no conditions, because they know that if I like their place I will buy something from them and come back again. When I come to eatery, I want to pay for food. Washing hands, using toilet, sitting at the table has to be included into price of damn hamburger.  If they don't do this, I turn around and walk away. You have to decide what are you going to be: just another shitty exchange or high quality  service.

The reason why people get "0" fees for trades is because of centralization by your broker.  You actually are getting a raw deal since the broker will expand the spread to make money.  You are trading within their internal pool of funds and stocks... once you go out of their pool, there are costs associated with placing orders.  Because bitshares is decentralized and all transactions are irreversible, you must pay a fee for that work to be done.

[yvv]

It is not only the amount of fee which matters, what are you paying for matters too. It is ok if fancy restaurant charges more then fast food eatery, but I don't know anybody in good mind who would agree to pay anything just for sitting in a restaurant having no food. It is ok to pay $1 fee for a trade which brings you $5 profit, but paying for an offer which was not even filled is ridiculous. It is not physiological, this is common sense.

Paying for an order which is not filled is not ridiculous. Placing an order has costs associated with it and the cost is significant in every trading system. Some systems just have chosen to subsidize this cost by increasing other fees.

And while you don't necessarily profit from an order that isn't filled (you can, by the way, if you're using it as part of some trading methods), you certainly had the opportunity to profit from it.

Taking care of restroom in a fast food place has also associated costs with it, but if they will start charging fees for using their restroom, then good luck in attracting customers.

Most places make you buy something if you want to use their facilities.

In some shitty slums may be so, but in the world where I live they allow me to use their facilities with no conditions, because they know that if I like their place I will buy something from them and come back again. When I come to eatery, I want to pay for food. Washing hands, using toilet, sitting at the table has to be included into price of damn hamburger.  If they don't do this, I turn around and walk away. You have to decide what are you going to be: just another shitty exchange or high quality  service.

[tbone]

People are discussing this polo and I agree with the traders (who by the way, are one of our main target markets):

* The fee to place a trade needs to be extremely low.  Just enough to prevent spam.
* The fee to cancel an order should be 0.
* The fee upon the EXECUTION of an order should be "high" (aka, current levels).

I agree with Ander's premise that the cost for placing a trade should be low, the cost to cancel should be zero, and the cost of successful trade execution should be high.  bytemaster's proposal is intended to accomplish these goals while providing incentive to NOT leave orders open on the dex.  I think it's an elegant solution, although I'm not sure there's much of a problem with people keeping unnecessary orders open because when your order is open it ties up your funds.  So that already provides far more incentive to close any orders that don't need to be open. 

With that in mind, I think it would be much easier for people to understand the fee structure if we simply charged a spam fee to place an order, then either zero to cancel OR a full fee upon successful trade execution ($.05, $.125, or $.25 - after cash back - depending on membership level). 

By the way, it should be clear to everyone that one of the things bytemaster built into his proposed solution is an order placement fee that varies depending on membership level.  So in his example, the cost to place an order (that later gets cancelled) is $.002 for lifetime members, $.0755 for annual members, and $.201 for basic members.  Personally, I think the order placement fee in this scheme is WAY too high for basic and annual members.  Ander's idea was to avoid spam (not to profit massively from orders that end up getting cancelled) and I agree with him 100%.  So I think everyone should get charged the same order placement fee.  Perhaps UNLESS people with lower membership levels pose more of a spam risk.  In which case I would support a sliding scale, but a much more gradual one.  Perhaps $.002, $.004, and $.005.  Remember, most people are not spamming, and I think charging them much more than spam deterrent fees just to place an order would be very counterproductive.

@Ander: you're the OP on this thread and it seems there is a lot of support for your original premise.  What do you think about this?

[lil_jay890]

It is not only the amount of fee which matters, what are you paying for matters too. It is ok if fancy restaurant charges more then fast food eatery, but I don't know anybody in good mind who would agree to pay anything just for sitting in a restaurant having no food. It is ok to pay $1 fee for a trade which brings you $5 profit, but paying for an offer which was not even filled is ridiculous. It is not physiological, this is common sense.

Paying for an order which is not filled is not ridiculous. Placing an order has costs associated with it and the cost is significant in every trading system. Some systems just have chosen to subsidize this cost by increasing other fees.

And while you don't necessarily profit from an order that isn't filled (you can, by the way, if you're using it as part of some trading methods), you certainly had the opportunity to profit from it.

Taking care of restroom in a fast food place has also associated costs with it, but if they will start charging fees for using their restroom, then good luck in attracting customers.

Most places make you buy something if you want to use their facilities.

[lil_jay890]

It is not only the amount of fee which matters, what are you paying for matters too. It is ok if fancy restaurant charges more then fast food eatery, but I don't know anybody in good mind who would agree to pay anything just for sitting in a restaurant having no food. It is ok to pay $1 fee for a trade which brings you $5 profit, but paying for an offer which was not even filled is ridiculous. It is not physiological, this is common sense.

Trading and sitting in a restaurant are not equatable.  When an order is placed, work has to be done to make sure that order is facilitated under the desired conditions.  This work isn't done for free unless when the order is triggered you make a substantial amount in trading fees.  Think of the order placing fee as a cover charge when going to a night club.

 Before long there will be fees charged by stock exchanges to combat high frequency trading as well.

[BunkerChainLabs-DataSecurityNode]

I am concerned with the lack of real data surrounding this.

That said, I am going to contribute to the madness.

The proposal set forth as it is seems reasonable.

[DestBest]

https://github.com/cryptonomex/graphene/issues/393

Quote from BM on GitHub:

Market participants expect placing / moving orders to be cheap and filling orders to be expensive.

To prevent spam, all transactions require some kind of fee.
Placing orders consumes memory and cannot be trivially cheap so needs a high fee.
Canceling orders frees memory and has historically been free.

We can make placing orders free, filling orders (relatively) expensive, and canceling orders cheap with the following change.

User pays $0.25 to place an order
User pays $0.001 to cancel an order, and gets a refund of $0.25 * NETWORK_FEE_PERCENT
If the order fills then there is no refund of the $0.25
Under this plan the cost to place / update an order is $0.001 while the cost of having an order filled is $0.25.

The only remaining issue with the above is that part of the original fee ($0.20) goes to the referrer who may have withdrawn their cashback. To keep things simple, the only fee that gets refunded is the network fee.

If the user is a lifetime member then it looks like this:

User pays $0.25 to place an order and receives $0.20 cash back
User pays $0.001 to cancel an order, and gets a refund of $0.05 and $0.0008 cash back. (total cost $0.0002)
If the order is actually filled the user paid $0.05
If the user is an annual subscriber then it looks like this:

User pays $0.25 to place an order and receives $0.125 cash back
User pays $0.001 to cancel an order and receives $0.0005 cash back and a refund of $0.05 (total cost $0.0755)
If the order is actually filled the user paid $0.125
If the user is a basic member then it looks like this:

User pays $0.25 to place an order
User pays $0.001 to cancel an order and gets $0.05 back (total cost $0.20)
If the order is actually filled the user pays $0.25
The break even point for deciding whether to upgrade to a lifetime member is if the user would end up canceling 500 orders. If they end up canceling 10000 orders because they are a market maker then the average cost would be ($100 + 50000*.0002)/50000 => 0.0022 and the total spent would have been $110 dollars.

As long as the average order size is greater than $25 dollars, the market fees on the filled orders will be less than other exchanges that charge (0.2%) of volume. Anyone who does $55,000 of volume will pay over $110 in fees on centralized exchanges. If you are placing and canceling thousands of orders with a bot and doing less than $55,000 of volume then chances are your bot is not effective and is spamming the network.

[xiahui135]

I support Ander's idea.

[bytemaster]

https://github.com/cryptonomex/graphene/issues/393

[liondani]

or maybe there can be a "market maker" membership for high trade

 

PS Maybe monthly "market maker"  membership's ....