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Introducing Volume-Based Exchange Fees

Werner van Rooyen
2 minute read

We have introduced a volume-based fee reduction for traders using the Luno Exchange.

The new fee structure gives discounted trading rates to those who trade larger amounts of Bitcoin.

volume-based fees image

On makers and takers

The Luno Exchange uses the popular maker-taker fee model.

Market makers are traders who place some of their local currency on the Luno Exchange, which will be used to buy Bitcoin at some time in the future. They place a buy limit order at a price that they are willing to pay for the Bitcoin: a price lower than what current sellers are willing to accept at that time. Alternatively, makers can place Bitcoin on the Luno Exchange to place a sell limit order at a price, higher than what other buyers will currently accept.

They are known as market makers, because they add liquidity to the exchange. When another trader comes along and closes the order --by buying or selling Bitcoin at the market maker's price-- they remove liquidity and are known as market takers.

We want to encourage market making, since a liquid exchange is very important in ensuring a fair exchange rate for all customers. We do this by not charging market makers a transaction fee when their limit orders get closed.

Historically we charged our market takers a flat fee, but this is now changing over to a volume-based fee, where it gets cheaper to execute market taker transactions, depending on how much you trade.

Volume-based trading fee

If you have traded more than 10 BTC in the past 30 days --excluding the current day-- you will be eligible for discounted trading fees. Another discount applies the day after you’ve traded 100 BTC in a 30 day period.

You can see the Luno Exchange trading fees here. 

Example

Sarah decides to start trading Bitcoin on the Luno Bitcoin Exchange.

She buys 5 BTC in a taker order on January 1 and sells 5 BTC again on January 12, again as a taker order. She now has traded a total of 10 BTC in under 30 days (buying and selling both contribute to volume) and the normal taker fee was applied to both these transactions.

On midnight (GMT), January 12, the fee reduction will automatically be applied on Sarah’s account.

She buys another 1 BTC (again as a market taker) on Jan 13 and this time the reduced market taker fee was charged on the transaction.

As long as she keeps a trading history total of 10 BTC for the past 30 days, she will keep enjoying lower trading rates.

Few important notes:

  • Trading volume is the sum of all executed trades (maker or taker) in the past 30 days
  • Volumes are calculated until midnight of the previous day (UTC)
  • Fees are calculated when an order is placed
  • Launch date of volume-based fees is February 1, 2017
  • Launch volume based fees in ZA, NG
  • You will always see your fee estimate before you place an order on the exchange

Confused?

If you have any questions about trading on the Luno Exchange, please see our Help Centre.

If you don’t buy or sell more than 10 Bitcoin each month --or if you find market making, taking or limit orders confusing-- we suggest using the simple Instant Buy and Sell feature in your Luno account.

Avatar Werner van Rooyen
Author

Werner van Rooyen

Werner heads up Business Development and Marketing at Luno. His passions include payments, e-commerce, technology, marketing and design: something that he has been fortunate enough to do on three different continents. Werner has lived and worked in South Africa, the United States, Indonesia, Taiwan and China.

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