Author Topic: I think we need to fix the fee structure for trading  (Read 8732 times)

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Offline dannotestein

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Even for a regular user (non-lifetime member), we're talking about 3-6 cents USD per order. Any trader who makes trading decisions based on this cost will not bring significant business to the blockchain. They are just playing around.
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Offline clayop

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Lets assume you are a trader on BitShares and plan on updating your order often, so become a lifetime member.  The cost to place an order is 2 BTS or $0.01.

20k BTS for lifetime member is also a cost. Why don't we think about a normal user who is not a lifetime member?

I have paid more than $100 in fees to BitStamp and am a "normal" user.  Paying a lifetime membership fee makes sense and is still cheaper than paying regular exchange fees.   If I were an active trader on BitStamp my regular fees would be an order of magnitude higher than a lifetime member.   So I think it is safe to assume that anyone who will trade so much that the fees matter it is worth it to become lifetime members.  Everyone else it is still cheaper at the full rate.

It is all psychological.

Probably 95% of users don't pay $100 a month for trading fee. They only pay 0.1~0.2% of their order when it filled.

We have a high level of capacity (100 TPW atm). We don't have to be parsimonious. Why don't we sell our network resources at a lower price (with lower trading fees)? IMHO, trading fee at the initial stage of ecosystem expansion, in which attracting new users is the most priority, should be as low as to prevent spammy transactions. In BTS 1.0 with 0.1 fee, there were no spamming attacks. So I would suggest 2.5 BTS trading fee for non-lifetime members (and 0.5 for lifetime members as like a default setting of BTS 1.0).
« Last Edit: October 23, 2015, 12:04:03 am by clayop »
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Offline bytemaster

Lets assume you are a trader on BitShares and plan on updating your order often, so become a lifetime member.  The cost to place an order is 2 BTS or $0.01.

20k BTS for lifetime member is also a cost. Why don't we think about a normal user who is not a lifetime member?

I have paid more than $100 in fees to BitStamp and am a "normal" user.  Paying a lifetime membership fee makes sense and is still cheaper than paying regular exchange fees.   If I were an active trader on BitStamp my regular fees would be an order of magnitude higher than a lifetime member.   So I think it is safe to assume that anyone who will trade so much that the fees matter it is worth it to become lifetime members.  Everyone else it is still cheaper at the full rate.

It is all psychological.   
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Offline yvv

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People are fine with withdrawal fee because they get refunded if withdrawal is canceled or failed. If people are charged for trade which did not happen, they get unhappy for sure.


Offline Method-X

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The cost to opening an order is MEMORY allocation that stays around until the order is canceled (if ever). 
A "one time promotional" could allow an attacker to force full nodes to have GB of memory allocated for ever for almost no cost.

Ah, so it's an attack vector...

By the way, the reason traders don't like being charged for unfilled orders is psychological/behavioral. Most people are not as rational as you and will perceive unfilled order fees as being "high" and think nothing of it when charged 1.5% to withdraw coins from an exchange. Also, they're used to doing it a certain way already. Going against the grain is never good for adoption.
« Last Edit: October 22, 2015, 09:21:09 pm by Method-X »

Offline monsterer

The cost to opening an order is MEMORY allocation that stays around until the order is canceled (if ever). 
A "one time promotional" could allow an attacker to force full nodes to have GB of memory allocated for ever for almost no cost.

Storing all open orders in memory seems a bit mad, forgive me. How is this going to scale when you have thousands of DEX markets?

Filled orders should pay a percentage trade fee, IMO because traders are used to that already.... set cancels and moves to spam minimum fee.
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Offline clayop

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Lets assume you are a trader on BitShares and plan on updating your order often, so become a lifetime member.  The cost to place an order is 2 BTS or $0.01.

20k BTS for lifetime member is also a cost. Why don't we think about a normal user who is not a lifetime member?
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Offline luckybit

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I kind of agree ... we first need to incentivize people to use the dex .. once we have some traction we can increase the fees ..
how about a public offer for 3 months of almost zero fees in the dex!! just enough to prevent spamming?

Suppose Bitshares has another year like 2014 where it loses traction, has no marketing, and has decreasing fees in a desperate attempt to try to attract users? How will that downward spiral look?

I say Bitshares should take profit as it comes from wherever it can. Fees are the first place it can get a profit and until you find a replacement the fees should stay the same. If you find a replacement source to fuel Bitshares then you can talk about lowering the fees but lowering profit is not an option.

The referral program is perhaps the only way Bitshares will gain traction and if you defund that you are defending the entire marketing campaign and perhaps any possibility of userbase growth among high net worth individuals.
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Offline bytemaster

The cost to opening an order is MEMORY allocation that stays around until the order is canceled (if ever). 
A "one time promotional" could allow an attacker to force full nodes to have GB of memory allocated for ever for almost no cost.

I did the math in the past, but I will do it again now.

I recently sold  $1300 worth of Bitcoin on BitStamp and they charged me over $3 for this.

Lets assume you are a trader on BitShares and plan on updating your order often, so become a lifetime member.  The cost to place an order is 2 BTS or $0.01.
You would have to update your order 300 times before the costs approach that of BitStamp. 
This is enough to update your order 10 times per day for an entire month.

For normal users the DEX is MUCH cheaper because they are adjusting their orders MANUALLY.  The value of the user's time to MANUALLY update orders is far greater than the $0.01 fee. 

Lets get some real numbers from real traders:

1. What is your volume (how much do you currently pay in fees)
2. How often do you update your orders (how much would you pay on the DEX)

I think for almost everyone except very high frequency traders the DEX is cheaper. 
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Offline yvv

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Long time ripple user here who is really excited by bitshares project. Some advise: you may want to consider to look at ripple fee model. The have very tiny transaction fee which is paid whenever any type of transaction is submitted. The purpose of this fee is anti-spam. Besides that, they have a transfer fee which is set by asset issuer and is paid whenever the asset changes hands to reward the issuer.  Something like this could be adapted for bitshares ecosystem.

Offline clayop

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Totally agree.  High fees for filled orders, but low fees for opening orders.

Add: If this is not possible in the short-term, why don't we keep all trading fee low and then start to make a change? (like xeroc's suggestion)
« Last Edit: October 22, 2015, 08:07:54 pm by clayop »
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Offline topcandle

Agreed. This is reasonable.  Although placing a order will have to be more temporary which is refundable upon canceling.
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Offline xeroc

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I kind of agree ... we first need to incentivize people to use the dex .. once we have some traction we can increase the fees ..
how about a public offer for 3 months of almost zero fees in the dex!! just enough to prevent spamming?

Offline Ander

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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).


Traders want to be able to place an order but be able to move it later, and not lose to a fee.  At polo or other sites I can place and remove an order for no fee at all.  Our fee for this should be just enough to prevent spam, like 1 BTS or even .1 BTS. 


When an order executes, the fee should be extracted then.  (If it executes in pieces, its important that it is only paid one time in total).


This is what we need to get traders on board.  We need the fee to mostly be paid at execution, not when placing or moving an order!  Traders dont want to risk paying a fee for an order that doesnt happen.


Please consider this.  I think we should do the following:
* Modify the fees as described above.
* Post something explaining the change and telling traders "we listened to your feedback and are changing things to meet your needs".



Note that I am not advocating low fees, I am simply advocating not charging people for non-executed/cancelled orders, any more than necessary to prevent spam. 
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