Are DEx fees worth it?

#1

This question pops up every now and then and while each person has a different perception of “good value for money”, earlier topics already highlight use cases that “ought to make sense for everybody”.

But if someone hopes to use the DEx for “token scalping”, that clearly can’t be done and maybe it will never be economical (and rightly so, because there’s no reason world’s day-trading transaction logs need to be stored on the bitcoin blockchain).

Still, if we wanted to examine the claim that bitcoin miner fees are too pricey, how would we check?

Counterparty stores all orders - valid and invalid - in its database. Specifically, orders table is the place.

How many orders were placed on the DEx in 2016?

Like I said above, orders includes things like invalid orders, but from the blockchain perspective they’re in there. Among valid orders, some were canceled and some expired unmatched and so on and so forth.

But I don’t need to spend much time on the details - I want the big picture so here goes:

  • 144 blocks per day, 365 days in a year which is approximately 52,000 blocks
  • Current block height around 450,000, so let’s select all orders from block_index 400,000 up

Results:

  • 57,000 orders
  • 1038529614 sats in fees

Summary:

  • We had over 1,000 orders per week
  • 10 BTC in fees was spent on miner fees
  • The average cost of order (in miner fees) was close to 0.00018, showing that most people used to default (high) Counterparty fee of 0.0002 BTC. )Remember that the both sides pay and there’s no “refund”.for cancellations or unmatched orders).
  • Around 26,000 orders were filled (close to 50% which doesn’t seem too bad)
  • Growth of orders has slowed down somewhere around block index 430,000 (probably correlated with the raising value of BTC)
  • A scatter plot of fees provided shows that fees paid went up in the second half of 2016 (after block 430,000), which may be related to v9.55 which was supposed to bring lower fees
  • Several generous traders (or maybe a very very generous trader) paid fees of over 0.01 BTC

Above graphs and conclusions derived from querying the DB may contain errors.

#2

The centralized exchanges have a secret fee that’s being raised from time to time. When they get hacked, or they pretend to get hacked, you lose all your funds.