The Ins and Outs of Transaction Fee Mining

Richard M Adrian by Richard M Adrian - 06:55 AM Sep 16, 2019

Debate has been surrounding the issuing of transaction fees and the crypto exchanges that support this mining model. Several times, the model has  been regarded suspicious. Nevertheless, the trend seems to be gaining traction and;  its important to understand the concept behind transaction fee mining.This post attempts to explain the concept of transaction fee mining, how various exchanges employ this mechanism and recent changes that a few exchanges are implementing. 

The Model is a Refund Model

Once a trader executes a trade on an exchange, they are usually charged a fee. To understand this fee, it is worth to understand the model that most of these crypto exchanges use. The charged fee form the basis of the profit that exchanges make. However, an exchange running the trans-fee mining model, it refunds to the users fees levied on their trends in the crypto exchanges token. 

During the first and second quarter of 2018, the digital asset market experienced a new development. Several exchanges were witnessing sudden surges in trading volumes. The sudden transformation in  trading volumes took place within a relatively short period; thereby creating an uptrend of these crypto exchanges  up the rankings of crypto asset data platforms. Related Exchanges that were  in these movements were Fcoin, CoinEX, CoinBene, BitForex and Coinsuper. 

Initial Market Reception of Transaction Fee Mining

Note that the sudden increase in trading volumes on the exchanges were a result of adopting  a new model. The transaction fee mining. Also referred to as trans-fee mining, the new model attracted massive criticism from all market spotlights. In fact, most crypto publications and several leaders associated the model as a Ponzi Scheme.However, the mode has marked the birth of exchange tokens and they are here to stay.

Binance was the first platform to implement its own native digital asset, Binance Coin (BNB). Following the coin’s massive success, several other exchanges have adopted the native token concept. Through only a fair amount of amendments, the concept gave birth to the transaction fee mining model. 


A firm which the crypto community credits with pioneering of trans-fee mining model is FCoin. A Chinese crypto exchange. FCoin hit headlines after it promised customers 100% of their transaction fees reimbursed in the form of a native F1 token. Both trans-fee mining and exchange tokens confer users with rights to accumulate their native token. 

However, customers have greater incentive to trade on platforms that support the model given that exchanges will reimburse users the fees they pay on their transactions. Usually, customers will frequent these platforms to accumulate their native assets and either immediately sell it, or store in anticipation of a future price increase.

About The Author
Richard M Adrian

Richard M AdrianBlockchain Analyst with a demonstrated history of working in the writing and editing industry. Skilled in WordPress, Editing, SEO Copywriting, Copy Editing, and Blog Marketing. When I am not writing, analyzing bulls/bears - I will be listening to music, reading a thrilling novella or hiking. Email me at - And we could talk about anything - business or dragons.


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