After starting their journey in 2011, Kraken exchange has become one of the most popular and widely used Bitcoin exchanges in the network.
The San Francisco-based company is a favourite amongst the professional traders due to its innovative features, fast execution, high security, and exceptional support. It maintains an exclusive partnership and full regulatory compliance with vast number of traders around the globe, as well as the Tokyo government, and BaFin-regulated Fidor Bank.
The company is the most prominent Bitcoin exchange dealing in euro, while also working with a few other currencies like the US dollar, the Yen and the Canadian dollar. Kraken is constantly being praised as the top Bitcoin exchange by third party news media and was the first Bitcoin exchange to be enlisted by Bloomberg terminals.
Earlier today, the company posted a new blog announcing their decision to reduce all market fees. Kraken will integrate a new ‘maker-taker model’, which aims to reduce the platform’s trading fees.
According to the post, this ‘maker-taker model’ feature will ensure a reduced fee for the market-makers who offer liquidity to the market-takers. This decision comes as a result of high public demand, Kraken said, explaining that its customers have been asking for a lower fee system. This ‘maker-taker model’ will give the clients a simpler and reduced fee structure.
How does it work?
The maker fee is applicable to situations where the trader provides liquidity to the order book by ordering a buying limit below the market price or a selling limit above market price. The fee will only be paid to the maker (maker fee) when such orders are taken by new incoming orders.
Accordingly, the taker fee is applicable to situations where the trader confiscates liquidity from the book by ordering a market/buying limit that is carried straightaway out in response to a previously placed limit order on the book.
As described above, any upfront orders will trigger either market or limit orders and the maker or taker will be the triggered market or to limit order.
Benefits of the ‘maker-taker model’
Traders who provide liquidity in the order book will benefit from this new system, while traders who remove liquidity from the order book will also benefit from this reduced fee system when compared to the usual fee system. Even though takers pay only 0.10% more than makers, the ‘maker-taker model’ will offset this through deeper liquidity and tighter spreads.
In terms of Bitcoin-fiat currency trades, the maker fee goes as low as 0% and up to 0.16%, depending upon the traded amount. The taker fee goes as low as 0.10% and up to 0.26%, depending upon the amount that is being traded. But you can find out more about the new fee structure here.
With this new maker-taker model, trades within the cryptocurrency system will also have a new structure due to the overall reduced fees. However, the ‘maker-taker model’ is not integrated in terms of dark pool fees, even though that has also been changed. The reason for this is that the ‘maker-taker model’ is only beneficial when you can view the order book.
Kraken’s new fee structure will be activated in a couple of weeks, from 1st August.