CoinMKT is a US-based cryptocurrency exchange which caters for trading 9 popular cryptocurrencies, 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, 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.
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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.