#CryptoFees101

💸 #CryptoFees101: Understanding Blockchain & Exchange Fees

🔹 1. Network (Gas) Fees

• Definition: Fees paid to miners/validators to process and confirm transactions.

• Varies by Blockchain:

• Ethereum: Can be high, especially during network congestion.

• Bitcoin: Moderate, varies by block space demand.

• Solana, Polygon, Avalanche: Low fees, usually fractions of a cent.

⚠️ Fees spike during NFT drops or market volatility.

🔹 2. Exchange Fees

• Centralized Exchanges (CEX):

• Trading Fees: Charged per trade (e.g., Binance, Coinbase).

• Maker Fee: For placing limit orders.

• Taker Fee: For executing market orders (usually higher).

• Withdrawal Fees: Fixed or dynamic fee to move funds off the platform.

• Deposit Fees: Rare, but check for fiat deposits via card or bank.

• Decentralized Exchanges (DEX):

• Swap Fees: Usually 0.3% per trade (Uniswap, PancakeSwap).

• You also pay gas fees on top of this!

🔹 3. Bridging Fees

• When moving assets between blockchains (e.g., Ethereum → Arbitrum):

• You may pay gas on both chains.

• Some bridges also charge a service fee.

🔹 4. Wallet Fees

• Most wallets are free, but:

• Some charge a service fee for swaps inside the wallet app.

• Always compare with external DEXes for better rates.

🔹 5. Hidden Fees

• Slippage: Difference between expected and executed price (especially on low liquidity tokens).

• Spreads: Difference between buy/sell price — common on beginner-friendly apps like Coinbase.

• Token Approval Fees: First-time DEX interactions require a one-time gas fee to approve tokens.

⸻

💡 Tips to Reduce Crypto Fees

• Use Layer 2 networks (Arbitrum, Optimism, Base) instead of Ethereum mainnet.

• Batch your transactions when possible.

• Swap during off-peak hours to lower gas.

• Choose limit orders instead of market orders on CEXes.

• Track fees on tools like GasTracker or DEX aggregators.