At Coinmerce, we are dedicated to providing a transparent and equitable trading experience.
This document outlines how we calculate the prices you see when you trade cryptocurrencies on Coinmerce. Our goal is to offer pricing that is fair, transparent, and competitive, while effectively managing the costs and risks involved in providing our Exchange Services.
How do we determine our Pricing?
The price you're offered is calculated using a simple, two-step process. In the third step we add our Exchange Fee and provide you our Exchange Offer.
Step 1: Finding the Base Market Price (BMP)
First, we establish a Base Market Price (BMP), which is a non-executable estimate of a crypto asset's market value at any given moment. To determine this, we:
Gather data from Exchanges: We collect price data from leading international cryptocurrency trading platforms. This gives us a comprehensive view of the market.
Consider order book and trade data: We consider both the prices people are willing to buy and sell at and the prices of recent, actual trades. The actual traded price represents the value of a crypto-asset far better than order book quotes, which can be easily withdrawn.
Prioritize important information: We give more weight to information from exchanges with higher trading volume and from recent, larger trades to get the most accurate and up-to-date price data. We apply a logical weighting scheme to refine the aggregated data into a final figure.
Step 2: Risk Adjustment
To ensure fair and sustainable pricing, we derive and add a risk adjustment to the Base Market Price. To calculate this adjustment, we request real-time price quotes from multiple professional market participants, known as liquidity providers. We compare these quotes to the Base Market Price to determine the premium applied by each provider. We then use a sophisticated calculation method, called a Kalman filter, to smooth out any short-term market noise and arrive at a stable, reliable risk adjustment. The final, filtered premium is added to the Base Market Price to produce an objective, risk-adjusted price. This process ensures that the price we determine is representative of the specifics of your Order (such as the type and volume of your order) and market conditions.
Step 3: Exchange Offer and Fee
The final price, which we call the Exchange Offer, is presented to you with a validity window of two minutes. This Exchange Offer includes the price determined in Step 2 and the Exchange Fee, which is separately disclosed for full transparency. If you accept the Exchange Offer within the validity window, the Order is deemed final and executed at that locked-in rate.
Our Exchange Fee
We charge a transparent exchange fee of 0.25% for every trade. These fees help us cover the costs of providing a secure and reliable exchange service. We kindly refer to the Fee Schedule for comprehensive and up-to-date information on costs and fees.
Example:
You want to buy 1 ETH with your Euro Balance.How is the price constructed?
Step 1: We calculate a Base Market Price (BMP) of €2,000 per ETH
Step 2: We derive a market-representative risk adjustment of 0.12%,
and add this to the BMP. This adds €2.40 (€2,000 * 0.0012).
The risk-adjusted price is €2,002.40.
Step 3: We apply a transparent Exchange Fee of 0.25%.
This adds €5.01 (€2,002.40 * 0.0025).
The final Exchange Offer presented to you is €2,007.41 for 1 ETH. The offer will remain valid for two minutes.