Coinbase Cuts Down Fees on Stablecoin Pairs as their Market Grows 10x in 6 Months

Coinbase’s own stablecoin USDC is the fastest growing one that captures 21.4% of the stablecoin market share. According to the Uniswap creator, “Hyper-efficient stablecoin trading on Uniswap v3” has resulted in Coinbase Pro reducing fees.

San Francisco-based cryptocurrency exchange Coinbase has announced updated pricing for its stablecoin pairs.

The update is for nine “Sable Pairs,” viz. DAI-USDC, DAI-USD, USDC-EUR, USDC-GBP, USDT-EUR, USDT-GBP, USDT-USDC, USDT-USD, and WBTC-BTC, which are subject to change.

The change in fees on Coinbase Pro — there is now no maker fees (0 bps) while the taker fee is 0.01% (1 bps), is for all volume tiers. Also, it is effective from June 1st.

In its official announcement, the exchange noted that stablecoins play an important part in the crypto ecosystem by allowing users to benefit from multiple funding options and instant settlement.

“The Stable Pair market has grown 10x in trading volume over the last 6 months. Leveraging our fiat rails and our USDC issuer status, we feel confident that introducing Stable Pairs to the market will be an attractive offering to our global user base,” it said.

Coinbase also has its own stablecoin USDC, developed by the Centre Consortium, a collaboration between Coinbase and Circle. Circle, which is co-founded by Jeremy Allaire, is the issuer of USDC and has recently hinted that it will IPO soon with a new listing for hire.

USDC is the fastest-growing stablecoin in the crypto sector, with a market cap of nearly $3 billion. It currently captures 21.4% of the stablecoin market share, up from 6.6% a year back.

Increasing Competition

The biggest exchange in the US is known for its very high fees compared to other exchanges. In its filing with the SEC for its direct listing, Coinbase had reported a huge portion of its revenue coming from transaction fees earned from volume-based trades on the platform.

For the year ended December 31, 2020, trading revenue represented over 96% of the company's net revenue at $1.1 billion, and retail is the one contributing the majority of it.

Interestingly, the biggest DEX Uniswap earned more than $7 billion in fees on Black Wednesday and is currently generating over $3 million in fees per day, as per CryptoFees.

“Hyper-efficient stablecoin trading on Uniswap v3 has already resulted in Coinbase Pro reducing maker fees by 100% and taker fees by 98% for stablecoin pairs,” commented Uniswap creator Hayden Adams.

Over the weekend, Adams also noted how DEX volume has become dominant on ETH/ERC20 pairs. For instance, Coinbase has $59 million volume for the USDC/ETH pair compared to Uniswap’s $784 million V2 and V3 volumes combined.

Back in August last year, Uniswap surpassed Coinbase Pro’s volume for the first time. In the past 24-hours, compared to Coinbase Exchange’s just over $4 billion volume, Uniswap, V2+V3, did almost $1.5 billion.

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