The Impact of Spread on Crypto Transactions | Carthago

A Necessary Pain or a Silent Thief?

Main Learning Points

• Spread is a non-explicit and variable fee charged by crypto exchanges for each transaction.
• Spread is based on the amount you are depositing or withdrawing from an exchange.
• Spread cannot be circumvented, as platforms use it to make money for development and support.

Introduction

Cryptocurrency transactions have been plagued by a number of associated fees that ultimately drives the cost of use up. Almost all cryptocurrencies charge transaction fees for any activity conducted on chain, and these can vary from low (a few pennies) to high (a couple hundred dollars). Ethereum is infamous for having high fees in the past, at some points reaching almost $200 to conduct a simple send of the currency. While these fees will always exist alongside cryptocurrencies, for those who are engaging for the first time may not be aware of another fee and that is spread.

Spread is a fee applied to the transaction of any cryptocurrency from an exchange marketplace. You can think of spread as its very name implies, an amount of something distributed over a given area. Statistically spread would be a distribution in which a fee is applied to an amount…