In the ongoing week of Best Exchange in #steemcryptochallenge I have already introduced you to ChangeNOW & Localcryptos. Today I will give a comparative analysis of different popular exchanges with better liquidity where STEEM is listed.
This publication will also be a guide to the Newcomers to assess their cost-benefit-analysis in choosing an exchange to trade their STEEM.
Basically for any general user to choose an exchange, the basic things they look at are liquidity, easy sign-up/registration, KYC/No KYC, crypto withdrawal fees, security, etc.
I have consolidated the list of major exchanges with good trading volume/liquidity/confidence scores and gauged them against the aforesaid parameters for general traders to choose a suitable exchange.
The security grade A, B are considered strong, C & D are considered above-average security score. You can perform the security test at Observatory by Mozilla-- https://observatory.mozilla.org/. The various scores that are indicated in the above table are in line with the latest scan of the various exchange sites at Observatory at Mozilla.
The Market Maker and Market Taker fees are taken at the very basic level which does not include any VIP or Tiers that is offered by various exchanges.
Let's check how cost-effective the exchange fees and crypto withdrawal fees are. I have taken BTC as the general base currency against STEEM although some of the exchanges offer multiple pairs.
Except for HitBTC, all the exchanges offer flat trading fees, which means the Market Maker and Market Taker fees are equal. So I have taken trading fees as the average between Maker & Taker fees for this analysis.
Further, the BTC withdrawal fee is no more considered as costly particularly when we compare it with other base currency like ETH and USDT. With the recent surge in gas prices, ETH withdrawal has also gone costly, so as the ERC-20 USDT, that is why I have compared the various exchanges on the basis of BTC withdrawal fees in this analysis. If BTC is not available in a particular exchange against STEEM as an exchange pair, then the equivalent BTC value of that base currency is considered in this analysis.
In terms of trading fees, it's the Binance that stands out. The trading fee in the case of Binance is flat 0.1%, which is the lowest in the industry.
Please note that all these exchanges are centralized exchanges, therefore it is imperative to consider the crypto withdrawal fees to calculate the net effective exchange fees incurred.
In terms of BTC withdrawal fees, it is Binance again that stands out; only 0.0004 BTC (~$4.52 at the current rate of BTC), which is relatively low.
Neeraj Kumar trades 100 USD worth STEEM for BTC, he also withdraws it to his decentralized wallet. Which of the above exchanges will be a cost-effective exchange for Neeraj Kumar? Make a comparative analysis.
In Gate.io & Bithumb, Neeraj Kumar has to go for a 2-fold exchange to realize BTC as the pairing in Gate.io is STEEM/USDT and in Bithumb it is STEEM/KRW. So the trading fees will also be incurred twice.
So Neeraj Kumar gets maximum net exchange value in Binance(95.349 USD worth BTC) for his exchange of 100 USD worth STEEM for BTC.
Randula trades 1000 USD worth STEEM for BTC, she also withdraws BTC to her decentralized wallet, which of the above exchanges will be a cost-effective exchange for Randula? Make a comparative analysis.
In Gate.io & Bithumb, Randula has to go for a 2-fold exchange to realize BTC as the pairing in Gate.io is STEEM/USDT and in Bithumb it is STEEM/KRW. So the trading fees will also be incurred twice.
So Randula gets maximum net exchange value in Binance(994.449 USD worth BTC) for her exchange of 1000 USD worth STEEM for BTC.
Variation of net exchange value with trade size
Let's make a comparison of the net exchange fees(including BTC withdrawal fees) of the two cases that we discussed.
The net effective exchange fee is just 0.555% in Binance for a 1000 USD worth trade of STEEM/BTC.
As the trade size gets bigger the net exchange fees(including crypto withdrawal) also get lower. That is evident from this comparison between 100 USD worth STEEM/BTC trade and 1000 USD worth STEEM/BTC trade.
This comparison of exchanges is aimed at giving first-hand information to the Newcomers joining Steemit to chose a suitable cost-effective exchange.
For those who go for micro trading(10 to 25 USD worth crypto), it will not be ideal to withdraw any of the base currency(BTC, ETH, USDT) as the withdrawal fees will be taxing on the net exchange value. So they should go for a 2-fold exchange to trade with another pair to get a coin with low withdrawal fees, for example, TRX, BNB, etc.
In this analysis, it is evident that Binance is arguably the best cost-effective exchange out of the many exchange facilities that are available, to trade STEEM/BTC pair.