An article in yesterday’s Fortune magazine alerted me to what may be an emerging trend. I’m talking about ‘no fee ‘ exchanges. The latest one to arrive on the scene is Voyager and it’s bringing the competition to RobinHood, which is the best-known exchange to day that doesn’t charge commission fees.
It is Uber-funded
Voyager has some big names behind it that are bound to give it plenty of publicity and create trust as well, unless you really dislike Uber, for example, because Oscar Salazar, the co-founder of Uber, and Philip Eytan, one of Uber’s biggest investors are Voyager’s founders. And you see what they did — they called it ‘Voyager’, this connecting the exchange with transport. The CEO is Stephen Ehrlich who came from his position as CEO and founder at Lightspeed Financial, a retail brokerage.
Will Voyager have the same power as Uber?
So, the focus is on no fee trading, and it’s interesting that Voyager has opted to join RobinHood in this niche market sector that aims to reduce the cost of trading cryptocurrencies. However, given the business background of Voyager’s investors it makes perfect sense. Uber disrupted the global taxi market (well, almost globally) and once it opened that market up there has been no going back. ‘Uber’ is so popular, it is probably a verb by now, as in “Are you Ubering tonight?” — just like “Google it!”
What is Voyager offering?
Initially, Voyager will list 15 cryptocurrencies, drawn from the list of the 25 best-performing networks, including bitcoin, ethereum and bitcoin cash, among others. The new CEO also told Fortune that it is considering listing tokens like XRP and Stellar’s lumens, because those aren’t listed on any major U.S. exchange. He also said, “If you see it being traded today by some of the most prominent players, we will definitely have those plus some.”
How will it make money if there are no fees? Ehrlich explained, “In lieu of trading fees, Voyager will make up the difference in revenue by beating the average price of the coins at the point in time we execute the trade.” Basically, Voyager believes it can consistently execute buy and sell orders at better prices than customers would often get by just visiting one exchange, such as Coinbase or Binance.
The platform goes into beta testing this week and an app should be available by late October and it also intends to add crypto news and analysis to help its customers make buy/sell decisions, as well as additional tools for the institutional investor segment to its platform.
Currently the team is hard at work securing licenses in a number of U.S. states including California, Massachusetts, Missouri, New Hampshire and Montana. Its goal is to operate in at least 40 U.S. states. Could this be the start of a ‘no fee’ exchange trend, or will Voyager simply make the space its own — just like Uber?