Phemex Review: The first Zero-Fee Cryptocurrency Exchange for Spot Trading
Founded in November of 2019, the Singapore-based Phemex is one of the fastest-growing cryptocurrency exchanges in the space. Recently, they have been gaining a lot of attention from the community due to their back to back new listings of TRON, ONT, and ADA.
Built by ex-Morgan Stanley executives, Phemex offers an innovative zero-fee spot trading model. It also provides perpetual contracts that include assets such as Bitcoin, Ethereum, Chainlink, and even Gold.
Phemex’s Zero-Fee Model
Traditional crypto exchange models all have a fee problem. Buying and selling crypto through these exchanges require you to pay a transaction fee every single time. These fees tend to add up and can leave a noticeable hole in your pocket.
Phemex empowers its premium members to conduct spot trading through its zero-fee trading model.
- Traders need only to pay a monthly premium that can be as low as $6.99/month to avoid trading fees entirely. This also includes a 30-day free trial period wherein the traders can experiment and see how the system works.
- Web and App traders will benefit from Zero-Fee Spot Trading.
- For API trading, premium users will only pay 0.1% taker and maker fees.
- Premium memberships can be purchased with USD, BTC, and other popular coins.
- 30-day membership is available for $9.99, 90-day for $19.99, and 365-day for $69.99.
Phemex Contract Trading
Besides its zero-fee model, Phemex is also well-known for its crypto derivatives or contract trading offerings like Bitcoin Perpetual Futures. In trading, a derivative is a financial instrument whose value is derived from the value of one or more underlying products. These products can be commodities, precious metals, currencies, bonds, stocks, stock indices, etc. For Bitcoin Perpetual Futures, the core underlying asset is Bitcoin itself.
- Phemex offers Bitcoin and USD settled perpetual contracts of BTC, ETH, XRP, LINK, XTZ, LTC, and GOLD with up to 100X leverage.
- Phemex only collects the standard maker and taker fees of -0.025% and 0.075% respectively. The negative maker fee or rebate is an incentive for traders to add liquidity to the exchange.
- To tether the price of their contracts to their underlying assets, Phemex employs a funding fee mechanism. This is a payment that happens between traders every 8 hours and is not collected by the exchange. Whether the funding rate is positive or negative will determine who pays who. For example, if the funding rate is positive, long position holders will pay shorts.
Supported Countries and Cryptocurrencies
- For spot trading, Phemex offers Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), ChainLink (LINK), Cardano (ADA), Ontology (ONT), and Tron (TRX) pairs with Tether (USDT).
- For contracts, Phemex offers Bitcoin, Ethereum, Ripple, ChainLink, Tezos (XTZ), Litecoin (LTC), and Gold pairs with USD.
To see the list of support countries, check out their website.
Phemex takes the following security measures and precautions:
- It processes withdrawals three times a day, or hourly for premium members. Every withdrawal made is scrutinized by both the operators and founders.
- The team has a lot of experience in sophisticated Wall Street risk control. They leverage this to detect and act-on any malicious actions before-the-fact.
- All the assets remain stored in cold wallets.
- The exchange conducts all withdrawal operations offline.
Other Interesting Features
- The exchange offers new users a welcome bonus of up to $80 for completing certain tasks.
- Crypto-influencers can join their Phemex All-Star Program and earn 50% commissions from all their recruited users and an extra 10% from all recruited All-Stars.
- Phemex often holds several competitions that give their users an opportunity to win attractive prizes. An example of this is the Phemex Video Context, which had around $10,000 or 1 BTC worth of rewards up for grabs.
- Another great event is their current 1 year anniversary giveaway with total prizes worth up to $50,000.
- Phemex also offers an easy-to-use mobile app which can be downloaded for both iOS and Android. Users have the option to access their account through the app and trade on-the-go if needed.
Phemex vs. BitMEX vs. Bitfinex
According to Phemex, its two biggest competitors are – BitMEX and Bitfinex. The following are some of the more significant points of differences between the three exchanges:
- For contract trading, Phemex and BitMEX have the same maker and taker fees, while Bitfinex is a lot more expensive (0.02% maker and 0.075% taker).
- Phemex is the first in the industry to employ a membership model that offers users zero-fee spot trading.
- Phemex and Bitfinex both have a native mobile app. BitMEX doesn’t.
- Phemex offers settlement in both BTC and USD. BitMEX only offers BTC, while Bitfinex does it in USDT.
- BitMEX only supports Bitcoin deposits. Phemex supports multiple crypto deposits. Bitfinex supports deposits in Cryptos and fiat.
Phemex Pros and Cons
- The team has considerable experience in the financial sector. The founding members are ex-Morgan Stanley Executives. The CEO, Jack Tao, has over 11 years of experience working as a VP at Morgan Stanley. During this time, he developed comprehensive equity trading algorithms in the US.
- The zero-free trading model will have an industry-wide impact.
- You don’t need to go through complicated KYC procedures for making withdrawals.
- Has high-quality security measures in place
- The list of supported coins is lower than some alternatives.
- It’s a relatively new exchange, so it does not yet have the marketplace recognition as some of its peers.
Phemex has the potential to become one of the most popular cryptocurrency and derivatives platforms in the world. Their CEO Jack Tao aptly summarizes Phemex’s unique offering of technological innovation and security as follows:
“We are the first exchange to truly bring Wall Street level sophistication to the worldwide crypto derivatives markets. Our matching engine, trading engine, and risk engine were six months in the making, putting the platform technically on par with Nasdaq.”
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