The Math Behind Popular Maker/Taker Fee Schedules
coinbase pro kraken pro trading and binance binance.US fee schedules comparison

The Math Behind Popular Maker/Taker Fee Schedules

By trevorbalthrop | Trevor Balthrop | 14 Jul 2020


*This article is intended only for those located in the United States*


Among some of the most popular Exchanges in the Crypto world, who is the best?

 

The answer depends largely on you or the person who is going to be trading!

 

In that case then, how does each Exchange compare?

 

Let's admit, the math can be frustrating & reading Fee Schedules can be pretty confusing for some.

 

This comparison guide will help break down these frustrations for you.

 

That way you can make the most informed decision possible when choosing which Exchange is right for you!

 

Maybe you haven't picked an exchange yet?

 

Maybe you already picked and are not sure whether or not to switch?

 

This will break down the fees in order to save time, energy, and the fabulous moolah.

 

(Each comparison will contain a referral link in case you want to get started and earn a reward for making a new account)

Coinbase Pro

$10 Referral Bonus for Coinbase - https://www.coinbase.com/join/balthr_y 

trevor balthrop coinbase pro make taker fee schedule

(source: https://help.coinbase.com/en/pro/trading-and-funding/trading-rules-and-fees/fees)

Coinbase Pro actually has some decently low fees considering it is also insured and offers great rewards programs.

As you can see, there are a total of 11 different tiers, and the more money you have to trade with the lower these fees become.

Naturally, everyone starts out in the first tier <$10k which means less than $10,000 USD has been traded within the past 30 days.

The tier you are assigned is based on your past 30 days of trading activity adding up the total amount you have invested for both buys and sells.

This is important to remember if you plan on actively trading!

With a well thought out plan, you can actually advance to a better tier with a relatively low amount of money.

Meaning if you don't have $10k to drop into trading you may still be able to reach the $10k - $50k tier.

For example, if you have only had $1000 to trade within 30 days, you would only need to buy and sell that $1000 ten times.

Pricing tiers are based on the accumulated amount of trades that have successfully gone through back and forth.

Coinbase Pro will even show you this amount in your Orders dashboard so you won't even need to keep track of it.

This is great, however, you still need to be mindful of the Maker Taker fees that apply when making those trades.

Otherwise, you might make it to another tier with your $1000 bucks and find that you actually lost money in fees along the way.

Always make sales that break even!

Both buying and selling will implement a Maker or a Taker fee.

What's nice with Coinbase is it clearly tells you how much in fees you are going to pay before putting in an order.

Let's say for example you just signed up, you deposited $1000, and you are ready to buy some Bitcoin when it reaches $9000.

When placing your order it will deduct a Maker/Taker fee of 0.50% because you are still in the first pricing tier.

If the order goes through, the fee will be deducted from the $1000 that you used to make the sale.

So for $1000 it would deduct 0.50% from that $1000 which would be a fee of $5 USD. 

Technically speaking, that means you were only able to purchase $995 dollars worth of Bitcoin at $9000.

The same would also apply no matter what the price of Bitcoin is at either!

So if instead Bitcoin was worth $7000 or $12000 USD and you bought $1000 worth of BTC while in the first pricing tier.

A $5 fee would be deducted from the $1000 that you spent because of the 0.50% fee applied to your funds.

Then of course, if you make it to the next tier of $10k - $50k during a 30-day cycle.

Your fee would lower to 0.35% making your fee only $3.50 if using $1000 to make a purchase of Bitcoin.

While it does seem hefty at first and more than competitors, it is very doable to reach higher tiers!

Reaching higher tiers will minimize your fees and in return reward you with better gains. 

 

trevor balthrop coinbase pro deposit withdrawal fees

(source: https://help.coinbase.com/en/pro/trading-and-funding/trading-rules-and-fees/fees)

The table that we see here is from Coinbase Pro and it goes over Deposit and Withdrawal fees.

This is especially important to note because Coinbase Pro offers free deposits and withdrawals!

Avoid doing a wire transfer is possible because as you can see here it would cost a whopping $10 to deposit and another $25 to withdraw.

this only includes Coinbase's fees and some banks will charge you a fee of their own to Wire which really eats up any progress made. 

Avoid fees or at least minimize fees at all costs if you can! 

Every little bit adds up 😎

 

Kraken Pro

Kraken Referral Bonus - Coming Soon!

kraken pro trading maker taker fees

(source: https://www.kraken.com/features/fee-schedule)

Kraken Pro offers some pretty competitive prices when compared to Coinbase Pro when you compare.

Kraken is highly trusted and safe just like Coinbase and also offers a 30-day trading cycle based on Volume traded.

The User Interface is a little bit harder on the eyes which might deter new users to go to a different exchange.

One thing that makes so many users happy with Kraken is the fact that their Fee Schedule here is significantly lower!

When starting out, traders are subject to a Maker fee of 0.16% or a Taker fee of 0.26%.

The only difficulty here is that it could be tough to understand if a Maker or a Taker fee applies.

Another difficulty to notice here is that it takes a larger amount of trading volume to accumulate in order to advance to a higher pricing tier.

There are only 9 tiers on Kraken Pro as opposed to 11 tiers on Coinbase Pro.

Using the same example as before, let's say you have $1000 in Kraken and go to execute your first trade.

You are in the first tier of $0 - $50k and would like to use your money to buy Bitcoin when it drops to $9000

This is where it gets tricky!

Depending on the type of order you place it will charge either a Maker fee or the Taker fee.

A Taker fee will be applied if you do a Market order, a Stop Loss order, or Take Profit order.

A Maker fee will be applied if you do what is called a Limit order

More on that can be found here - (source: https://support.kraken.com/hc/en-us/articles/360000526126-What-are-Maker-and-Taker-fees-)

So if you place an order of $1000 with a Taker fee applied, Kraken will deduct 0.26% from your $1000 in funds.

  • 0.26% of $1000 = $2.60 fee or $997.40

If you place an order of $1000 with a Maker fee applied, Kraken will deduct 0.16% from your $1000 in funds.

  • 0.16% of $1000 = $1.60 fee or $998.40

Again the price of Bitcoin or price of any other cryptocurrency would not change how much fees are deducted.

It only applies to the money that you are supplying so be sure to keep track of this so that you can ensure you break even.

 

kraken pro us deposit fees

(source: https://support.kraken.com/hc/en-us/articles/360000381846-Fiat-currency-deposit-options-fees-minimums-and-processing-times-)

kraken pro withdrawal fee

(source: https://support.kraken.com/hc/en-us/articles/360000423043-Fiat-currency-withdrawal-options-fees-minimums-and-processing-times-)

Deposits and Withdrawals on Kraken seem to be a little more tedious and not as straight forward.

It also looks like the fees at Kraken for simply funding your account tend to cost a little bit more than Coinbase.

One thing to notice here though is that the amount of time you have to wait to use your funds is slightly faster than other places.

The verification process is needed in order to fund your account which seems to take longer and get rejected more than some exchanges.

While that can be frustrating it is also great to know that they don't rush KYC and take AML very seriously to avoid bad actors on their platform.

If the fees you see here are concerning, your instincts about them are right!

Sure you may be able to get a free Deposit but when it comes to Withdrawing back into your bank account. 

There doesn't appear to be any sort of free option to do so which is a big disappointment especially if you forget that Kraken does this.

It can really put a damper on an exciting moment withdrawing winnings back to your regular bank account. 

Overall, Kraken is a great exchange, and even though some of the fees can be rather disappointing.

It is still possible to avoid many of them or think of clever ways to work around them. 

 

Binance.us

Binance.us Referral Bonus - https://www.binance.us/?ref=35049952 

binance.us fee schedule maker taker fees BNB

(source: https://www.binance.us/en/fee/schedule )

Saving the best for last we have Binance's US version that has been out for quite some time now.

Binance is by far the most worldly famous, most trusted, and longest-running exchange out there.

Since it is one of the biggest players out there in the Cryptocurrency Exchange world, they have implemented some great features to their platform.

One of those great features includes how they set up their Fee Schedules!

At first, it could potentially seem difficult to follow or understand but it is easily the best when it comes to minimizing fees.

If it seems scary at first that is totally understandable.

After all, once you get more familiar with another exchange, traders can always change to Binance later once they get the hang of everything.

Binance.us offers 11 different pricing tiers that they rank from VIP 0 through VIP 10.

The tier you start off with is VIP 0 and very similar to Kraken's starting tier of $0 - $50k USD.

As you can see from their table, it is only 0.10% for both the Maker and Taker Fee.

This is much lower than both Coinbase and Kraken!

A quick example from before, take $1000 and buy Bitcoin when it drops to $9000.

No matter what kind of order you place, you will be charged a Maker or Taker fee of 0.10% out of your $1000 in funds.

  • 0.10 % of $1000 is only $1.00 USD or $999 dollars

That means you were able to purchase $999 USD worth of Bitcoin at the price you ended up choosing.

But wait.... it gets better!

In the table above you probably noticed that it says BNB Balance.

Binance offers its own cryptocurrency called BNB or Binance Coins!

They have cleverly figured out a way to offer better lower trading fees for those that purchase Binance Coins.

Meaning if you hold a certain amount of BNB and make your normal trades.

The fees held against you will able to your BNB Balance rather than your 30-Cycle of USD volume.

This is especially helpful too because it allows you to change pricing tiers simply by holding a certain balance rather than your personal trading volume.

It is a lot more difficult to hold a consistent trading volume over 30 days than it is to simply maintain a balance.

It pretty much gives users the opportunity to choose what VIP pricing tier they want for trading.

What is the catch here then?

Well, the important thing to realize here is that BNB fluctuates in price and is worth a certain amount.

What that means for you is that to hold BNB you must buy it first and you must buy it at its current price.

As of right now 3:30pm GMT it is $18.0445 USD which means you would need about $18 USD to hold 1 BNB in your account.

Then after you hold this amount in your account, any trades that you make going forward will start to deduct from your BNB holdings.

This could surprise some who are not paying attention to their balance and execute a ton of trades eventually dropping a VIP Tier by mistake simply because they were not paying attention to their Binance Coin BNB Balance.

Still, confused?

Here is an example!

Let's say you already bought 50 BNB and have $1000 USD to start trading.

Because you are holding 50 BNB this automatically places you in VIP 1 rather than VIP 0.

When you go to buy Bitcoin with your $1000 USD your order goes through successfully.

The VIP 1 Maker/Taker Fee for BNB will go through instead of the VIP 0 or VIP 1 USD Maker/Taker Fee.

You will receive the full amount of $1000 in Bitcoin and instead 0.0675% will be deducted from the 1 BNB that you are holding.

  • 0.0675% minus 50 BNB equals 0.000675 or 49.99925 BNB

After your trade, you no longer have a balance of 50 BNB and now only have a balance of 49.99925 Binance Coin.

Now that you have dropped below the requirement for VIP 1 you are now under 50 BNB and placed back into VIP 0.

Once you are back above 50 BNB you will be in VIP 1 again.

And just for our curious minds to see as a comparison, if we use this same example and want to find out how much USD we lost in fees.

All we would have to do is take the value of 1 BNB which was $18.0445 from earlier and convert it.

  • Fee deducted was 0.000675 BNB which is equal to about $0.18 USD ($18.04 minus $17.86 or 1 BNB minus 0.99)

So rather than paying a $1.00 fee for the normal 30-cycle Fee Schedule you only paid $0.18 cents and purchased the exact amount of Bitcoin you wanted. 

Compared to other exchanges, this is seriously a huge difference maker!

Sure you may have to maintain a balance but guess what?

You can trade BNB/USD pairs and accumulate Binance Coins too.

Which means you can stock up on and buy Binance coins when BNB dips giving you more trading power.

 

binance.us deposit ACH fees trust trevor balthrop

(source: from inside Binance.us account)

In this screenshot, I have whited out my account number from the Deposit From: section for privacy reasons.

This is a screenshot of an ACH transfer from a linked bank account and as you can see here.

There are no fees!

Like Coinbase it takes 10 days after your deposit in order to Withdraw it but at least it allows you to use it right away. 

 

binance.us debit fee withdrawal purchase fees trevorbalthrop

(source: from inside Binance.us account)

In this screenshot, I whited out my Debit Card information for privacy reasons too but I wanted to show the difference.

Binance.US doesn't charge a fee here it seems however, the intermediary Binance goes through does.

The fee varies depending on how much you are depositing and here you see I am only buying $100 from a Debit Card. 

That $3.40 is not worth it in my opinion but if you have no other option it's not terrible either. 

Also, note the fact that if you purchase with a Debit Card it only takes 3 days for it to clear before you can withdraw it.

Definitely keep in mind though that this is also not ideal if you are looking to withdraw soon and don't have ACH yet. 

You CANNOT withdraw USD or crypto back to your Debit Card and Binance will only accept ACH or Wire withdrawals.

Also keep in mind that if you use a Credit Card instead, it will either be blocked by your bank, or your bank will charge you a Cash Advance Fee of some kind. 

That's also why I think this method should be avoided if possible!

 

binance.us wire transfer fees apply trevorbalthrop

(source: from inside Binance.us account)

If you do choose to withdraw through a Wire transfer the option is there.

It is a lengthy process for your bank and it will also incur the standard Wire fees that apply during that time.

Wire fees are typically anywhere from $10 to $25 depending on your location, your bank, and current banking regulations.

This means those fees are subject to change when you least expect it and could be jacked higher than $25 at any time!

Yuck...

 

trevor balthrop binance.us withdrawal fee

(source: from inside Binance.us account)

Lastly, we have Withdraws that go directly back through your linked bank account via ACH. 

Just like Coinbase, there are no fees for doing this which makes it the best option for minimizing disappointing fees. 

Depending on your bank and the time of the week it could take up to 10 business days.

While it is possible it could still take up to 10 business days, I typically see deposits within 24 - 72 hours if I don't include weekends or holidays.

 

Conclusion:

All three of these exchanges are trustworthy, popular, widely used, safe, and offer great features!

Although Binance is truly the best considering how generous they are with fees.

Both Kraken Pro and Coinbase Pro are great exchanges as well that offer enough volatility to make good trades. 

Definitely give all 3 a try to see which one suits you best!

It's possible you might even use 2 of them as you learn the network and make withdrawals and deposits as time goes on.

All 3 places offer Staking options for coins too which make them all big-time winners no matter who you choose. 

This should offer everyone reliable incite into picking a new exchange during your adventures into investing!

Thank you so much for taking the time to read, be safe, be skeptical, and good luck out there!


trevorbalthrop
trevorbalthrop

Official Website: https://www.trevorbalthrop.com | Bitcoin ₿ | Blockchain | Author on Urban Dictionary | CEO of www.DrinkingGames.beer | First teenager hired to work for Google back in 2011 |


Trevor Balthrop
Trevor Balthrop

All about Bitcoin, the future of Blockchain, understanding Market Connections, and general Call Outs. Enjoy the hodl life!

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