Cobinhood – The Zero-Fee Trading Approach
Cobinhood is the world’s first zero-fee cryptocurrency exchange. Due to other exchanges competing for the lowest fees in the industry, Cobinhood has undercut them all by going straight to zero! As a result, they hope to attract traders to their platform and steal market share from fee-based exchanges. This Cobinhood review will explore the zero-fee trading approach.
Does it live up to the hype? And, can it provide a top-notch customer experience in the crowded cryptocurrency exchange market? Let’s find out:
Cobinhood Key Information
|Site Type||Cryptocurrency Exchange|
|Available Cryptocurrencies||Bitcoin, Ethereum, Bitcoin Cash, Neo, OmiseGo and more. 60+Coins available.|
How It Works
During our Cobinhood review, we set up an account and went through the usual security measures and confirmations. It was a pretty simple process.
We also noticed when logging into the system from a new device that Cobinhood will require email authentication from this device. This is a nifty little security feature they’ve implemented which we’d like to see practiced more in exchanges.
The flyout dashboard is conveniently stored out of the way but can quickly be accessed from the top right of your screen. From here, you can access important features like your Account, Funds, and the Help Center.
The Funds section will allow you to deposit funds required for making your first trade. But please make sure you deposit the correct cryptocurrency to the corresponding address as depositing a different crypto than the one clicked can result in the loss of your funds!
Cobinhood only accepts cryptocurrency deposits at this time but has plans to include fiat (US Dollar, Euro, etc) deposits at some point in the future.
Finally, the Accounts section in the dashboard is where you’ll update your security settings like creating a 4-digit pin and setting-up 2-factor authentication. These additional precautions are highly recommended no matter the amount of money you trade.
You can place your trades through the exchange platform which is the first screen to show up on login. This is fairly straightforward but may be intimidating to beginner investors.
Also, you can submit simple market and limit orders directly from the order form as highlighted below. If you understand advanced trading options like stop-limits you can set this here too.
The standard charts have no tools attached but you can change this by selecting TradingView in the top right section of the charting window. A number of useful tools will appear including most that a more experienced trader would want like Fibonacci lines, trend lines, and patterns.
Make sure you understand market and limit orders, candlestick charting, and the order book if you want to get the most out of your trading. We have a useful guide to charting in TradingView if want to improve your charting.
During our Cobinhood review, we also gave their mobile app a test run. They provide apps for both the iOS and Android platforms. This is a great bonus for the trader on-the-go. We recommend you familiarize yourself with the web platform first before jumping into the mobile one.
There are zero fees when placing orders on the actual exchange. This means zero on both the buy and sell side of any trade. But keep in mind that this does not apply to deposits and withdrawals. You still need to pay the standard fees to blockchain miners who validate transactions as you normally would.
As a result, deposit fees depend entirely on which cryptocurrency you are sending and what that crypto’s blockchain charges are. Here is an example on the Ethereum blockchain. You can find a detailed description of the Cobinhood withdraw fees on their website.
In our Cobinhood review, we noticed they added a nice touch similar to what Binance have done with their native token. You can use your existing Cobinhood (COB) tokens to pay for withdrawal fees.
Cobinhood gives you a 50% discount when withdrawing. This means that Cobinhood will pay half the miner fee for all withdrawals as long as you have COB in your account to pay with.
Cobinhood provides trading in over 60 different cryptocurrencies with new ones added on a regular basis. As expected they support the widely accepted cryptos like Bitcoin, Litecoin, Ethereum and Bitcoin Cash.
They also list a number of smaller coins which are not found on other exchanges. This comes with the risk of lower liquidity, however (more difficult to find a buyer or seller compared to mainstream coins like Bitcoin). Keep this in mind when trading, you don’t want to be stuck with a coin you cannot easily sell if you need to at short notice.
Your daily transfer limits depend on your account verification.
Level 1 verification allows you to withdraw up to 3 BTC every day. Level 2 allows up to a whopping 100 BTC per day. Finally, a VIP level is available for what we can only assume to be for crypto whales (Traders/investors with a very large amount of crypto). There is no limit on all levels for deposits.
Level 1 requires no documents while level 2 will require ID and phone verification.
Finally, if you are a US citizen you will be required to confirm your relevant tax information to Cobinhood in line with FATCA, the Foreign Account Tax Compliance Act.
It is difficult to estimate community trust in Cobinhood at this early stage of the project. During our Cobinhood review, we picked up some issues on various Reddit posts and the community appears to be divided on some issues.
Seems like they are quite active on a number of communication channels which is a positive sign. As a result, it would probably be in their best interest to dedicate more resources to respond to user concerns.
Cobinhood security appears quite solid and the platform uses all of the standard safety procedures (SSL, multi-sig, 2FA). According to their official medium press release they detail their offline storage process is as follows:
“In order to access the offline wallet, 5 out of the 8 HSMs have to be confirmed. That way, if just 1 or 2 HSMs are compromised, your wallet remains secure. HSMs are also geo-distributed across different countries, further maximizing security.”
It’s important to note that Cobinhood (like most exchanges out there) is currently centralized. Centralized exchanges are more prone to hacking and fraud compared to decentralized ones. As a result, they have announced plans for a decentralized exchange which should be beneficial for traders in the long run.
Cobinhood’s official press release claims a 24/7 customer service and inquiry response within a day. Their website provides a contact form and telegram channel if you need to get in touch. We weren’t able to find any real community issues with their customer support.
The website also includes a well-organized FAQ section with a large set of questions and helpful answers.
Conclusion: Cobinhood Review
In this Cobinhood review, we’ve seen how easy it is to get started on the platform. But the question on many users lips right now is, how does Cobinhood make money with zero-fee trading? Well, through the following channels:
- A high-frequency trading server subscription service
- The Cobinhood Prime subscription service
- A margin trading loan option
- The Cobinhood ICO underwriting service
This appears to be a fairly high-risk business model which depends on Cobinhood attracting a large number of traders. If they can do this and iron out some kinks in the system this could prove to be a top choice for traders in the future.
In conclusion, if zero-fees and high-frequency trading are your top priorities then this is the platform for you.
- Beginner Friendliness
- Customer Support
- Community Sentiment
- Payment Methods
- Available Cryptocurrencies