How Can I Exchange Crypto At Low Fees?
If you’re looking for a platform to buy and sell cryptocurrency, this article is for you. We will tell you what types of exchanges there are, what fees they charge, and how to understand if a fee is high or low. We will list a few trusted services, so after reading this article, you will be all set to make your choice and start trading cryptocurrency right away.
Why is it hard to choose a crypto trading platform?
If you are new to crypto, you may feel lost in the abundance of services and platforms that the crypto industry has to offer. Most of them say the same thing: they are the fastest, the cheapest, and the most secure. How can we know this is true, though? Getting to real facts requires doing research.
Another important thing is that it’s not only about fees: a platform with the lowest commissions is not necessarily the best one. Is it a trusted platform or does it look a bit sketchy? Is it secure enough, or has been involved in some type of controversy? What KYC requirements does it have?
All these aspects are worth taking into account — however, read this guide first before diving deeper: we will recommend to you the trusted platforms that have earned the trust of the crypto community.
Now, let’s see what types of exchanges there are and what fees they charge.
What types of exchanges are there?
Centralized exchanges
In centralized exchanges (CEXes), you create an account, deposit some crypto from various blockchains and swap the coins instantly (executing a trade order takes less than a second) at low fees.
Sounds pretty cool, right? Yes, but usability in crypto always comes at the cost of security: if you store crypto on a centralized exchange, you don’t really own your crypto — you have no access to private keys. The trade goes off-chain (the transactions are not recorded on the blockchain): that’s why it’s so fast, but if an exchange is hacked or goes down, you may lose your funds. With decentralized exchanges and non-custodial exchange services, this is simply impossible.
Decentralized exchanges
When you use a decentralized exchange (DEX), you trade right from your wallet, and all transactions are written in the blockchain. This makes them more expensive and lengthy; however, you still truly own your crypto at any given moment, which is why millions of users prefer DEXEs.
There is one major drawback in DEXes: an exchange of this type is based on one blockchain, so you can’t make cross-chain trades here (say, swapping ETH to BTC will be impossible). This is not a problem, for, say, DeFi users, but we will skip DEXes in this article due to this disadvantage.
Non-custodial exchange services
Now, there are also non-custodial exchange services. They are as secure as DEXes as the trade goes right from a user’s wallet and there are no accounts; they are as usable as CEXes because they allow for trading assets from different blockchains. Here’s how they work: you deposit some crypto coins from your wallet and the service sends you the swapped amount back in a few minutes while you remain anonymous.
What fees do exchanges charge?
When you pay with a credit card, the store charges a little fee for using a bank card. It works in the same manner with cryptocurrency: any exchange service has a robust infrastructure that is hard to develop and maintain, and this is why trading fees are charged by all types of platforms for any transaction. These fees are usually fixed.
In the case of decentralized exchanges and non-custodial exchange services, there is also a network fee that you pay for depositing your coin on the platform. This fee is charged by the blockchain and is used to reward its developers and miners, so you pay it not to the exchange, but separately as an extra sum from your wallet.
In some cases, non-custodial services ask for liquidity at large CEXes that they partner with, so another trading fee may be charged. Finally, the last network fee is paid to the service so that it can send you the swapped crypto back.
Top centralized exchanges with low fees
Now, we will mention two renowned centralized exchanges with reasonable trading fees and robust security levels. You can start using them right now if cheap and fast trade for you is more important than the risk of losing access to your funds and the need to register and disclose your identity.
Binance
Binance is one of the largest crypto exchanges, its total volume reaching $2 trillion in 2020. Fees at Binance start at 0.1% and go lower if you have a significant trading volume. If you pay trading fees with Binance Coin (BNB), you will get a 25% discount.
Kraken
Kraken is also one of the most sought-after crypto centralized exchanges. Its fees go up to 0.26% and depend on the trading pair and your trading volume. If you buy or sell at the market price, you are charged as a “taker.” Say, if you buy 1 BTC at $40,000, you will be charged 0.22% ($88).
How to trade crypto at low fees with a non-custodial service?
Lightning-fast order execution and low fees may be your top priority, and in this case, centralized exchanges work well. But remember about the security issues: not only a CEX can be hacked or go down, but it can, say, start maintenance at an unexpected time and limit withdrawals when you need them so much. This is something that is impossible with non-custodial exchange services.
ChangeNOW is a non-custodial exchange service that never stores your funds, can’t freeze them, or limit your access to them. We don’t ask you for registration and KYC, so you can preserve your anonymity and save huge amounts of time (a KYC check at Binance may take you several weeks, and until it’s over, your possibilities will be very limited!).
Yes, with a non-custodial service, you have to pay network fees on top of the trading ones. This can be annoying, but if you catch a moment when the network fees set by blockchains are not as high (or simply send many currencies with extremely low network fees), you will pay mere cents.
ChangeNOW partners with numerous liquidity providers, which allows us to choose the best rate between them all and offer it to you at the moment of the swap. And we charge no hidden fees: they are all already included in the estimated rate that you see in the calculator.
What exchange service to choose?
Now, you know what exchanges there are and what fees they charge. If you are planning to do tons of daily trading, centralized exchanges are probably the best solution for you in terms of fees. But if you want to stay anonymous and be always sure your crypto is with you, use non-custodial exchange services.
Real test experience will help you decide. Go to ChangeNOW and make a small crypto swap — you will see how simple and fast it is. See what rates we offer and compare them with what Binance or Kraken have.
Good luck with choosing your best trading platform!
