Fees

Binance users support 0-fee trading despite CZ’s wash trading concerns

CZ is open to implementing the changes regardless of the challenges that a new system would bring, as he said, “Let’s see what the poll say. We listen to our users.”

Both traditional and crypto investors consider trading fees as one of the most significant liabilities when it comes to investing over exchanges. So no wonder when Changpeng “CZ” Zhao, the founder and CEO of Binance, asked investors about their interest in trading on the crypto exchange with no fees, the response was a resounding yes despite the inherent risks pointed out by the entrepreneur.

Binance stands as the biggest crypto exchange, outdoing its nearest competition FTX by 10x in terms of trading volume. CZ, known for implementing features based on community feedback, reached out over Twitter to gauge investor sentiment regarding the complete removal of trading fees.

While 0-fee trading may seem ideal for investors, CZ pointed out some of the issues it may sprout in the process — one of them being wash trading. Wash trading, wherein a user makes a series of buys and sells to manipulate market activity, can be used to go up the VIP tiers on Binance. 

Moreover, CZ stated that bringing 0-fee trading to the masses will require Binance to implement numerous safeguards, which include detection tools for identifying illegitimate trades. Each VIP tier is tied to certain trading benefits including lower trading fees. As a result, professional poker player Brian Rast asked, “So if there are no fees, why do you need VIP tiers?”

Over 30,600 investors voted on CZ’s poll at the time of writing — with around 65.5% inclined to trade with no fee whatsoever. CZ is open to implementing the changes regardless of the challenges that a new system would bring:

“Let’s see what the poll say. We listen to our users.”

Related: Binance gets VASP registration for its Spanish subsidiary from the Bank of Spain

Binance continues to spread its roots across the world as it steadily acquires registrations and operational licenses from regulators.

Maintaining its expansion streak, Binance’s Spanish subsidiary, Moon Tech Spain, got registered as a virtual asset service provider (VASP) by Spain’s central bank on Thursday. CZ attributed the development to Binance’s intent to protect users:

“Effective regulation is essential for the widespread adoption of cryptocurrencies. We have invested significantly in compliance and introduced AMLD 5 and 6 compliant tools and policies to ensure that our platform remains the safest and most trustworthy in the industry.”

Ethereum average gas fee falls down to $1.57, the lowest since 2020

For nearly two years, between Jan. 2021 and May 2022, the average gas fee required by the Ethereum network was roughly $40, with May 1, 2022 recording the highest average daily gas cost of $196.638.

The Ethereum ecosystem’s biggest roadblock to mainstream dominance is often attributed to the extremely high transaction fees — known as gas fees — it requires to complete a transaction. However, with Ethereum’s average gas fees coming down to 0.0015 Ether (ETH), the narrative is set to change. 

The average transaction fee on the Ethereum blockchain fell down to 0.0015 ETH or $1.57 — a number previously seen in December 2020. However, starting in January 2021, Ethereum’s gas fees surged, owing to the hype around nonfungible tokens (NFT), decentralized finance (DeFi) and a promising bull market.

Ethereum average transaction fee YTD. Source: BitInfoCharts

For nearly two years, between January 2021 and May 2022, the average gas fee required by the Ethereum network was roughly $40, with May 1, 2022 recording the highest gas cost of $196.638 — as evidenced by data from BitInfoCharts. 

Supporting this sudden drop in gas prices, Cointelegraph uncovered on Saturday that the daily NFTs sales have also dropped to one-year lows. The NFT ecosystem recorded its worst performance of the year in June as the total number of daily sales fell to roughly 19,000, with an estimated value of $13.8 million.

Number of daily NFT sales between June 2021 – June 2022. Source: NonFungible

In November 2021, back when numerous investors reported outrageous gas fees, Ethereum co-founder Vitalik Buterin published a decrease-cost-and-cap proposal to reduce unprecedented levels of strain on the network. Buterin had proposed a short-term solution to further cut rollup costs by introducing a call-data limit per block to lower ETH gas costs.

Related: Ethereum liquidity provider XCarnival negotiates return of 50% stolen ETH

Ethereum liquidity provider XCarnival recovered 1,467 ETH just a day after suffering an exploit that drained 3,087 ETH, worth roughly $3.8 million, from the protocol.

Blockchain investigator Peckshield explained the nature of the attack by stating:

“The hack is made possible by allowing a withdrawn pledged NFT to be still used as the collateral, which is then exploited by the hacker to drain assets from the pool.”