IV. High Transaction Fees

High transaction fees are a significant issue on many trading platforms, both for traditional financial assets and cryptocurrencies. For example, Interactive Brokers, one of the largest electronic trading platforms, charges up to $0.005 per share or 1% of trade value for its Pro platform, with a minimum of $0.35 per order.

While DEXs have lower trading fees (0.04% to 0.3%) compared to centralized exchanges, slippage often makes total costs higher. For example, slippage averages 22 bps on the USDC-ETH pool and 140 bps on the PEPE-ETH pool.

Trading meme coins like PEPE increases the risk of slippage by 80% compared to mature assets. Slippage is worsened by factors like low liquidity, high volatility, and large trade sizes on DEXs.

The chart below shows that Bitcoin transaction fees typically spike during price increases, indicating network congestion. Significant fee spikes occurred in 2014, 2017, and 2021 when Bitcoin's price surged.