Coinbase-backed crypto derivatives exchange cancels trading fees to compete with BitMEX

Quick Take

  • BLADE, a San Francisco-based cryptocurrency derivatives exchange, announced today that it will roll out zero-fee trading by the end of February 2020
  • The firm recently raised a $4.3 million seed round from SV Angel, A.Capital, Coinbase, Slow Ventures, and others
  • BLADE is counting on its zero-fee trading feature to give it an edge in the crowded derivatives market

BLADE, a Coinbase-backed crypto derivatives exchange, has axed its trading fees in a bid to wrest some market share from perpetual swap giant BitMEX. 

The San Francisco-based firm recently raised a $4.3 million seed round from SV Angel, A.Capital, Coinbase, Slow Ventures, and others, making it one of the few crypto derivatives exchanges that are backed by Silicon Valley venture capitalists, according to Blade co-founder and CEO Jeffrey Byun. 

Instead of charging commission fees, BLADE asks for a flat $10 monthly fee that allows users to place trades. By comparison, BitMEX and Deribit charge a 7.5bps taker fee per trade for BTC perpetual contracts. 

Source: BLADE

Currently, the market is dominated by bitcoin derivatives juggernaut BitMEX, the pioneer of bitcoin perpetual swaps. And as it stands, other exchanges, such as Deribit, have not been able to snag any meaningful market-share from BitMEX, even in spite of past issues with its platform and the associated complaints from users. 

BLADE, which launched its perpetual swap contracts two months ago, is counting on the zero trading fee feature to give it an edge in the already crowded crypto derivatives market. 

"We don’t have BitMEX’s liquidity yet because they have been around for years and have the most volume, but if we offer competitive liquidity and substantially lower fees, I believe we’ll attract meaningful market share,” said Byun.

BLADE currently supports seven trading pairs, covering BTC, ETH, XRP, USDT, XMR, ZEC, DOGE, USD, and South Korean won. Compared to BitMEX's 100x leverage, the smaller exchange offers up to 150x and does not perform KYC checks. As such, it does not serve U.S. users. 

Recently, a range of brokers in both the crypto and traditional finance markets have rolled out zero-fee trading, including cryptocurrency agency broker Tagomi, legacy brokerage firms Charles Schwab, TD Ameritrade, and E-Trade Financial.

On the other hand, trading fees on cryptocurrency spot exchanges are on the rise. Coinbase and Bitstamp increased their maker fees for retail clients between Q1 to Q3.

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