Will they pay more fee though?
They just move numbers on their inner books. And when you withdraw, they either charge you the fee or they won't change it because they were already charging you 10 times the "normal" fee as a flat fee.
Discussion
Nope my exchange doesn't charge a fee to withdraw. Just a fat spread to buy and sell
That does not sound like a sustainable business model from that exchange point of view. How can they afford it? Where is the trick?
If 10 users all buy $2000 in Bitcoin, they earn $200 fees in spread.
Now when we withdraw they pay a $100 fee.
Still $100 gross profit, down from previous $199
They still group withdrawals into big ass transactions with multiple outputs, so even like that, it won't hurt them as much. With the model you describe they'll feel it more than other exchanges, for sure, but the spread of a single big buy probably pays many times the fee.
