http://jaberwalk.victoryc.hop.clickbank.net/
Crypto exchanges can earn revenue through various means, including lending to margin traders, liquidation fees, and on/off ramping charges. However, the core revenue generator remains taking a fee on transactions.
There are multiple types of transactions and, therefore, many types of transaction fees. When comparing different transaction fees on the Bitcoin (
$74,653.00 ) and Ethereum (
$2,281.60 ) chains, the data suggested exchanges prefer to use the former to transfer value internally.
Transaction fees
On-chain data provided by Glassnode and analyzed by CryptoSlate showed an erratic history for fees earned by exchanges on Bitcoin ( $74,653.00 ) transactions.
The chart below features a considerable spike in fees towards the end of 2017, as BTC hit its $20,000 previous cycle peak.
The 2021 bull market saw another fee spike in April 2021, albeit significantly less than the 2017 bull, as BTC approached $65,000.
Strangely, the most recent bull market top, of $69,000 in Nov. 2021, was not accompanied by another fee spike, suggesting comparatively less exchange activity versus April 2021.
Since April 2021, fees through Bitcoin ( $74,653.00 ) transactions have sunk significantly and remain truncated.
Source: Glassnode.com
Bitcoin ( $74,653.00 ) : Exchange Fee Dominance
The Exchange Fee Dominance metric is defined as the percentage of total transaction fees paid in relation to on-chain exchange activity. This is further split into the type of transaction that earned the fee as follows:
Deposits: Transactions that include an exchange address as the receiver of funds.Withdrawals: Transactions that include an exchange address as the sender of funds.In-House: Transactions that include addresses of a single exchange as both the sender and receiver of funds.Inter-Exchange: Transactions that include addresses of (distinct) exchanges as both the sender and receiver of funds.
The chart below shows Bitcoin ( $74,653.00 ) transaction fees made up 36% of all exchange revenue sources related to BTC. This is further split:
Deposits – 21%Withdrawals – 4%In-House – 10%Inter-Exchange – 1%
Over the past five years, the categories of Deposits and In-House have grown exponentially.
Source: Glassnode.com
Ethereum ( $2,281.60 ) : Exchange Fee Dominance
Analysis of Ethereum ( $2,281.60 ) ’s Exchange Fee Dominance paints a very different picture. Currently, Ethereum ( $2,281.60 ) transaction fees account for 5% of exchange revenue sources related to ETH.
Withdrawals make up the most significant category of transaction fee type, which has been the case since July 2017.
The relative lack of In-House fees compared to Bitcoin ( $74,653.00 ) suggests exchanges prefer not to use ETH when transferring funds between internal wallets.
Source: Glassnode.com
Read Our Latest Market Report
Get an Edge on the Crypto Market 👇
Become a member of CryptoSlate Edge and access our exclusive Discord community, more exclusive content and analysis.
On-chain analysis
Price snapshots
More context
Join now for $19/month Explore all benefits
Source
