Bitcoin Exchange Backed by Pomp, Song and Woo Removes Trading Fees to Contend With Coinbase, Gemini

Upstart crypto exchange LVL wants to take on U.S. giants by removing trading fees. The move comes as bitcoin touches new all-time highs.

AccessTimeIconDec 1, 2020 at 12:01 a.m. UTC
Updated May 9, 2023 at 3:13 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Upstart crypto exchange LVL wants to take on U.S. giants Coinbase and Gemini by removing trading fees.

Announced today, LVL (pronounced “level,” as in playing field) is making its entire service free to use. LVL, which is backed by Morgan Creek Digital’s Anthony Pompliano and bitcoin advocates Jimmy Song and Willy Woo, previously had no trading fees but only for subscription users.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Why Core Scientific is Focused on 2028
    00:57
    Why Core Scientific is Focused on 2028
  • Bitcoin, Ether Rise Amid ETF Steam in Hong Kong; Solana's Latest Update
    02:14
    Bitcoin, Ether Rise Amid ETF Steam in Hong Kong; Solana's Latest Update
  • Bitcoin Whales Yet to Resume Accumulation: IntoTheBlock
    01:06
    Bitcoin Whales Yet to Resume Accumulation: IntoTheBlock
  • LVL is also partnering with Mastercard to release two debit cards in early 2021. A standard plastic debit card will be available to free-tier users for a $10 issuing fee, while a metal Mastercard is included with three months of LVL’s Premium service.

    The new features come as bitcoin is hitting all-time highs.

    “We’ve always been behind a subscription paywall but now we’re just making our entire service free to use,” said LVL CEO Chris Slaughter. “You can buy and sell bitcoin, you can use the plastic debit card. So now in North America, there’s a regulated exchange that’s 100% free to use.”

    LVL’s point is that large U.S. exchanges like Coinbase and Gemini with remarkably similar pricing schemes create a lack of competition. If it takes a scrappy minnow with just $2.5 million raised to date to disrupt the monopoly effects of these crypto exchanges, Slaughter said, then bring it on.

    “We are a super scrappy business contender by nature,” he said. “Like, we only have seven people but we have the first Mastercard approval in North America. We’re registered with FinCEN. And not only do we have bank accounts, they are full checking accounts.” (LVL also provides FDIC insurance on those accounts through banking platform Evolve, Slaughter said.)

    Revenue model

    The exchange makes its money, Slaughter explained, by charging $3 for withdrawals, which primarily covers network fees. (Coinbase charges a $1-$5 network fee.) The trading platform also charges $5 for same-day bank transfers and wires, which covers the exchange’s risk provisioning credit to users and generates some income for LVL, Slaughter said.  

    The premium service at $9 per month, which also includes live-chat facility with a banker, is the means by which LVL Autopilot brings liquidity to the platform. The system runs industry-standard market-making algorithms, providing liquidity to traders and generating passive income for the Autopilot user, says Slaughter.

    “Based on our current number of pro users, and the way we expect liquidity to grow following this announcement, we expect to pass Coinbase’s liquidity within the 2% band in January,” said Slaughter. 

    For now, LVL is available in 28 states and territories representing 60% of the U.S population, and is expected to service 94% of Americans by the end of 2021, Slaughter said.

    “William [Woo] and Jimmy [Song] were involved so freakishly early that they actually have founder shares,” said Slaughter. “Pomp got involved in the second half of last year and we have regular weekly meetings with him to talk about marketing.”

    Song said the aim is to even the playing field for users who are currently being scalped for fees.

    “Level is a revolutionary exchange that will change the game,” Song said via email. “Unlimited trading allows for really interesting innovations like an autopilot market-making which will give users a return on their Bitcoin.”

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.