Why are the contract transaction fees in the cryptocurrency space so high? And how can one save money?

There are many exchanges in the cryptocurrency space, but the calculation method for transaction fees is the same; there is a universal formula:

The formula for calculating fees: Fee = Position Value × Fee Rate

This leads to understanding why fees are high and how to save money:

1. Position Value

The position value far exceeds the principal, which means high leverage is used. For example, if you only have 100 USDT and open 100x leverage. After a complete trade, the fee expenditure ranges from 4 USDT to 10 USDT. A fee of 4% to 10% of the principal, who wouldn’t find that expensive?

2. Limit Order vs Market Order Fee Rate

Those who pay attention will notice that the fee I calculated in the first point is 4 USDT to 10 USDT, which is because I calculated based on the ordinary user limit order fee rate of 0.02% and the market order fee rate of 0.15%. It is clear that the fee expenditure for limit orders is much lower than that for market orders.

So the second point is to use limit orders more in trading.

The remaining ways to save money depend on the policies of the exchange, but all exchanges have a common mechanism.

3. Exchange Rebate Mechanism (which is both a way to save money and earn extra)

Rebates are an encouragement mechanism for new users by the platform, providing a certain percentage of fee refunds for users who place trades.

The rebate percentages vary across different exchanges; smaller exchanges tend to use high rebates to attract users. However, sometimes choosing an exchange cannot be based solely on fees and rebates; it must also consider factors such as fee rates and platform depth. Because sometimes the losses from fees can be much lower compared to other trading losses, it’s normal to face a total loss after a single wave.

How can one obtain rebates?

Users can enjoy rebates by filling in an invitation code when registering their account. It can be operated by users who want to do it, without delaying usage.

Note: Different invitation codes have different rebate percentages, methods, and times, so please choose carefully. #手续费返佣