Commission Completely Free... Desperate Survival Competition Among Virtual Asset Exchanges

Korbit and Bithumb Launch Fee-Free Event with 0.04~0.25% Fees
Prioritizing Market Share Growth Over Immediate Revenue and Profit
Market Leader Upbit Focuses on Improving User Interface (UI) and User Experience (UX)

Competition for survival among domestic virtual asset exchanges is intensifying. Some exchanges are even holding events offering completely free fees to increase their market share.

According to the virtual asset industry, Korea-based virtual asset exchange Korbit has been running a completely free fee event on all supported virtual assets since 9 a.m. on the 20th. Korbit will continue this free fee policy until further notice. Korbit’s free fee policy is the second of its kind among domestic exchanges. Earlier, from 6 p.m. on the 4th, Bithumb also implemented a complete fee waiver on all listed virtual assets. The fees, which ranged from 0.04% to 0.25%, were changed to 0%, and like Korbit, the free fee policy will continue until a separate announcement is made.

The free fee policies of Korbit and Bithumb are interpreted as attempts to shake up the entrenched market share of domestic exchanges amid a 'crypto winter' that has lasted longer than expected. Among domestic exchanges, Upbit holds over 90% market share, solidifying its dominance in this sector. In this situation, if Upbit’s market share remains stable, it could pose a serious threat to the survival of other exchanges. Therefore, these exchanges are sacrificing fee revenue, which accounts for an absolute portion of their sales, to increase their market share.

An industry insider explained, "It is clear that sales will decrease when free fee events are held, but it is equally clear that the situation is desperate. Even if the market recovers due to events like the Bitcoin halving in the first half of next year, it will be difficult to expect performance improvements once market share has already been lost."

In addition to free fee events, competition among exchanges is also fierce in terms of user convenience. Upbit is attracting users and strengthening competitiveness by enhancing services through improvements in user interface (UI) and user experience (UX). It has attempted improvements three times this year alone. Some evaluations suggest that the advantages of Upbit’s UI and UX have contributed to its market share increase. Bithumb is also continuously making efforts to enhance convenience, such as updating the usability of charts in its mobile application.

However, small and medium-sized exchanges find it difficult even to participate in market share competition. Exchanges operating won currency markets, such as Upbit, Bithumb, Coinone, Korbit, and Gopax, record a certain level of trading volume. According to data from the Financial Intelligence Unit (FIU) under the Financial Services Commission, the average daily trading volume of won currency market exchanges in the first half of this year was 2.9 trillion KRW. However, for coin market exchanges that trade only in virtual assets, it was only 1 billion KRW. Furthermore, among 21 coin market operators, 10 were found to have zero revenue from trading fees, and 18 operators were in a state of complete capital erosion.