The newly launched report from CryptoElate states that investors are unaware of the fees they will be charged when exchanging cryptocurrencies, including Bitcoin. It found that the systems being used lack transparency, so competition must increase for transparency to increase.
More information is available at https://cryptoelate.com
CryptoElate states in its new report that each crypto exchange is different, which makes them hard to compare. In addition, each blockchain uses a unique process to calculate transaction fees, which adds to the complexity. A fee may also be incurred when the coin passes through different systems, such as off exchange or on-chain.
The newly launched report aims to help investors better understand why it is so challenging to establish the crypto and blockchain exchange fees they will incur per transaction. For instance, investors may not be aware that centralized exchanges (CEX) use different structures compared to decentralized exchanges (DEX).
Those that operate through DEX have unrealized potential for investors. For instance, 1Inch, a Decentralized Finance (DeFi) or DEX aggregator, has announced its API will integrate with the Ethereum wallet Dharma. This will reduce the amount investors pay in fees.
These issues are not limited to one exchange. CryptoElate states it is an industry-wise issue affecting Gemini, Coinbase, Kraken, and more. Another element featured in the report is the fact blockchain fees have increased due to demand. Some exchanges operate on a basis whereby those paying the highest fee have their order processed first. While this is beneficial for retail investors, it may push out individual investors.
While challenging now, CryptoElate states transparency around crypto exchange fees will improve. The crypto market is still in its infancy in relative terms. Although it uses advanced technology and processes, overtime, they will improve to increase the speed of exchanges and reduce the costs.
A company spokesperson said: “Crypto exchanges have an edge over traditional trading and financial platforms because they use crypto wallets, while traditional platforms use banks to back the money.”
“The cryptocurrency exchange industry will probably centralize around selected exchanges and wallet providers. This should reduce different fee systems,” they added.
To find out more about the rise in cryptocurrency exchange fees, interested parties are encouraged to visit this link to read the article in full: https://cryptoelate.com/cryptocurrency-exchange-fees-are-a-mess-when-will-they-ever-improve-forbes
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