CoinMKT Adopts Market Maker-Taker Commission Structure

CoinMKT is a US-based cryptocurrency exchange which caters for trading 9 popular Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, including Bitcoin (BTC), Litecoin (LTC), even Megacoin (MEC) and Worldcoin (WDC).

The exchange features USD deposits, demo account trading, a decentralized wallet and cold storage procedures.

To help stimulate Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, they have recently announced the adoption of a market maker-taker commission structure.

Market makers, who add liquidity to the market by submitting orders that are not immediately executable and therefore remain open for market consideration, are rewarded with a rebate worth 0.25% of the transaction amount.

Conversely, market-takers submitting orders that are immediately executable are levied a fee worth 0.75% of the trade.

It follows that CoinMKT keeps the difference of 0.5% as commission for the trade, as they have stated in their announcement.

It appears that this model is applied even in the event where one of the parties posts a genuine limit order, which does supply liquidity, only to later adjust it to become executable due to market considerations. In such a scenario, there is an additional incentive to be the one not to cave in, as there's a tangential benefit to forcing traders to think twice before placing an order. The potential drawback though is for the exchange itself: it may experience fewer executions and associated revenue typically driven by more impulsive trades. For a growing exchange, however, it may rather build up its reputation on high liquidity and low spreads and only later cash in on more trades.

The commission structure announcement is similar to that coming from BTC China 2 weeks ago, whereby market takers are charged 0.3% of the transaction amount and makers are awarded a small rebate.

The structure resembles that of ECNs in equity trading but differs in that the ECNs don't usually provide a reward for adding liquidity.