Luno, a global digital currency company (previously known as BitX before changing names last month) has today introduced a volume-based fee reduction for traders using the Luno Exchange, which 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.
Luno stated they want to encourage market making, since a liquid exchange is very important in ensuring a fair exchange rate for all customers. The company does this by not charging market makers a transaction fee when their limit orders get closed.
Historically, Luno charged its 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 fees below:
- 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
- Users will always see the fee estimate before you place an order on the exchange