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Yes, trades on Ethereum and Bitcoin can be expensive, but there are other chains with subsecond finality and fees in cents. On a TradFi brokerage it is not poss

by 1ark 5y ago

Yes, trades on Ethereum and Bitcoin can be expensive, but there are other chains with subsecond finality and fees in cents. On a TradFi brokerage it is not possible to take part of in their market making. As your collateral is used for investing and not liquidity in the market making. Free? I only know of Robinhood and that's only for US, and you get frontrun anyway. If you are interested in holding equities only for value appreciation then I can understand DeFi not sounding that interesting. But if you are into saving, lending, leverage or market making then it should at least tickle curiosity.

skybrian 5y ago
Charles Schwab started offering free trades two years ago and the other major brokerages matched it. Free trades are just expected now. (I don’t know about outside the US.) More: https://www.nerdwallet.com/best/investing/free-stock-trading https://www.nerdwallet.com/best/investing/free-stock-trading Also I recommend subscribing to Matt Levine’s email newsletter. He covers stuff like this and is also very funny.
PretzelPirate 5y ago
> but there are other chains with subsecond finality and fees in cents. We should be careful with these claims in this context. The layer 1s that have sub-second finality tend to be heavily centralized either relying on a very small pool of DPoS-backed and I slash able validators, or a completely centralized protocol component (relay) that is a trusted component of the system. They get low fees and speed by keeping central control, but unlike the large brokers we’d traditionally use. The difference is that they don’t protect their users or have any consumer protections while still having the same ability to censor you or extract value from you. Layer 2s can solve this, but they currently have training wheels on which give operators a high level of control (in some cases, they can freeze assets). Once training wheels are off, layer 2s will give us low fees and fast finality while users are still protected from having their assets frozen or stolen.
gruez 5y ago
How competitive are the fees/spreads on difi? On gemini, the maker/taker fees are 0.25%/0.35% respectively, and the spread is less than $5 (bid: 58486.47, ask: 58490.85). >Free? I only know of Robinhood and that's only for US, and you get frontrun anyway any sources for this? AFAIK they make money off the bid-ask spread, but you're guaranteed at least the NBBO.
- anonymoushn 5y ago
  Defi fees can be cheaper than the very worst cex fees such as the ones you quoted, but only if you are trading huge size or not trading on Ethereum mainnet. Trading on Ethereum mainnet means the fixed fee of $100+ will probably dominate the exchange fee. Robinhood Crypto does not guarantee you the NBBO because the NBBO doesn't exist.
  - gruez 5y ago
    >Robinhood Crypto does not guarantee you the NBBO because the NBBO doesn't exist. Yeah sorry, I was pattern matching on "robinhood frontrunning" and didn't take the fact we're talking about crypto trading into account. With that in mind, they're not front running you, they're just providing worse rates and making money off the spread. It's basically how the "no commission" currency exchange places you see at airports works. They sell EUR to you at 1.15 EUR/USD, but they buy EUR from you at 1.10 EUR/USD.
    - anonymoushn 5y ago
      I think it ends up being more complicated than that, because they don't operate their own clearing for crypto and they don't charge any fees, so some other party acts as a wholesaler, quotes huge spreads, and returns a lot of that money to RH as PFOF. But your post is directionally correct, and the differences are mostly marketing.
- yrral 5y ago
  Uniswap v3 recently added support for 1bps (0.01%) pools. You can see here [1] that the usdt/usdc 1bps pool is their 3rd most popular tool if you sort by 24hr volume. And their popular pools are generally 5 bps. Due to the nature of x*y=k pools, the spread would just be 2x the fee (but increases based on how much you transact vs how much liquidity there is). Or you can think of it as 0 spread with 1bps fees on both sides for the usdt/usdc pools. [1] https://info.uniswap.org/#/pools https://info.uniswap.org/#/pools

by 1ark 5y ago

skybrian 5y ago

Charles Schwab started offering free trades two years ago and the other major brokerages matched it. Free trades are just expected now. (I don’t know about outside the US.) More: https://www.nerdwallet.com/best/investing/free-stock-trading https://www.nerdwallet.com/best/investing/free-stock-trading Also I recommend subscribing to Matt Levine’s email newsletter. He covers stuff like this and is also very funny.

PretzelPirate 5y ago

> but there are other chains with subsecond finality and fees in cents. We should be careful with these claims in this context. The layer 1s that have sub-second finality tend to be heavily centralized either relying on a very small pool of DPoS-backed and I slash able validators, or a completely centralized protocol component (relay) that is a trusted component of the system. They get low fees and speed by keeping central control, but unlike the large brokers we’d traditionally use. The difference is that they don’t protect their users or have any consumer protections while still having the same ability to censor you or extract value from you. Layer 2s can solve this, but they currently have training wheels on which give operators a high level of control (in some cases, they can freeze assets). Once training wheels are off, layer 2s will give us low fees and fast finality while users are still protected from having their assets frozen or stolen.

gruez 5y ago

How competitive are the fees/spreads on difi? On gemini, the maker/taker fees are 0.25%/0.35% respectively, and the spread is less than $5 (bid: 58486.47, ask: 58490.85). >Free? I only know of Robinhood and that's only for US, and you get frontrun anyway any sources for this? AFAIK they make money off the bid-ask spread, but you're guaranteed at least the NBBO.

anonymoushn 5y ago
Defi fees can be cheaper than the very worst cex fees such as the ones you quoted, but only if you are trading huge size or not trading on Ethereum mainnet. Trading on Ethereum mainnet means the fixed fee of $100+ will probably dominate the exchange fee. Robinhood Crypto does not guarantee you the NBBO because the NBBO doesn't exist.
- gruez 5y ago
  >Robinhood Crypto does not guarantee you the NBBO because the NBBO doesn't exist. Yeah sorry, I was pattern matching on "robinhood frontrunning" and didn't take the fact we're talking about crypto trading into account. With that in mind, they're not front running you, they're just providing worse rates and making money off the spread. It's basically how the "no commission" currency exchange places you see at airports works. They sell EUR to you at 1.15 EUR/USD, but they buy EUR from you at 1.10 EUR/USD.
  - anonymoushn 5y ago
    I think it ends up being more complicated than that, because they don't operate their own clearing for crypto and they don't charge any fees, so some other party acts as a wholesaler, quotes huge spreads, and returns a lot of that money to RH as PFOF. But your post is directionally correct, and the differences are mostly marketing.
yrral 5y ago
Uniswap v3 recently added support for 1bps (0.01%) pools. You can see here [1] that the usdt/usdc 1bps pool is their 3rd most popular tool if you sort by 24hr volume. And their popular pools are generally 5 bps. Due to the nature of x*y=k pools, the spread would just be 2x the fee (but increases based on how much you transact vs how much liquidity there is). Or you can think of it as 0 spread with 1bps fees on both sides for the usdt/usdc pools. [1] https://info.uniswap.org/#/pools https://info.uniswap.org/#/pools