Digital-asset exchanges are emerging as one of the biggest winners of the cryptocurrency boom. According to Bloomberg news “The top ten are generating as much as 3 million in fees a day or heading more than 1 billion per year, according to estimates compiled by Bloomberg using trading volume reported on data tracker CoinMarketCap.com
Trading fees are of course an important source of income for cryptocurrency exchanges, but they also have other ways to make money, including:
Not all exchanges demand listing fees for every project, but the practice has become very widespread. Listing fees range from $50,000 to $1 million.
Fees on Withdrawals and Deposits
After a token is listed on major cryptocurrency exchanges, its value often increases, so projects such as ICOs, who hold large amounts of their own tokens, are willing to pay large amounts. Many exchanges deduct some amount of assets as fees when you withdraw them from their exchange. The rate varies according to different exchanges. And some of them also charge you when you deposit your money.
Dark Pool Trading
Dark pool trading is simply trading where no one can see the quantity and the price of assets being purchased. Big VCs and institutional investors use dark pools to purchase or sell a large number of assets so that the market will not get affected and they will get their assets at a reasonable price.
Exchanges can charge substantial fees on these trades as the investors are getting a large number of coins without driving the price of the asset up.
Airdrops and Other Promotional Activities
Exchanges charge different companies to support their airdrops and other promotional activities. In this way, a user can directly take part in the airdrop of a coin by registering themselves on the exchange.
With the evolving landscape surrounding crypto trading volumes and revenues, decentralization and regulatory changes in the horizon we can expect to see the model evolve and change. The combination of innovative user acquisition strategies and overall increases in the number of listed cryptos will likely help many of the top exchanges remain competitive and profitable.