It's actually fairly simple: basically change the metric of a trade worth taking from "one with expected profit > 0" to "one with expected profit > expected fee

It's actually fairly simple: basically change the metric of a trade worth taking from "one with expected profit > 0" to "one with expected profit > expected fee". It does limit the number of potential profitable trades, and hence fees are sometimes used as a way for exchanges to reduce trading volume. Or to divert it; some Chinese (non-bitcoin) exchanges for instance charge greater fees for intraday trading, to discourage speculation.