Orders, Trades, and Fees: The Inner Mechanics of a Crypto Exchange

Trading may seem complex, but its principles are clear to anyone willing to dig in a bit. Each trade is an exchange between two parties who want to buy or sell an asset at their price. The exchange aggregates these orders and ensures fast, accurate, and secure execution.

At first glance, trading on a crypto exchange looks like a simple swap, but a complex system runs under the hood. It manages orders, monitors liquidity, and calculates fees so that every operation is processed correctly.

This article covers in detail:

• how a crypto exchange works and what happens at the moment of a trade,
• what influences the price of a cryptocurrency and why it may differ across platforms,
• what a spread is and what affects order execution speed,
• how fees are calculated and what methods help reduce them,
• which mistakes beginners make most often and how to avoid them.

This material is the second part of the “Trading Step by Step” series. If you are just starting to learn the basics of crypto trading, begin with the first article — “What is trading and how does it work.”

A crypto exchange is a venue where buyers and sellers meet to exchange digital assets. Its main task is to aggregate participants’ orders and ensure the secure execution of every trade.

There are two main types of crypto exchanges.

• Centralized platforms, or CEX, are operated by a company that controls the trading process and is responsible for safeguarding users’ funds. Examples include Binance, OKX, and Bybit.
• Decentralized platforms, or DEX, operate differently. Here all operations occur directly between users, and trade execution is handled by smart contracts.

To start trading on a crypto exchange, it’s enough to register an account or connect a crypto wallet. After that, the exchange acts as an intermediary that settles transactions and displays the user’s balance.

The key condition for the stable operation of any platform is liquidity, meaning the volume of assets available for exchange. The higher the exchange’s liquidity, the faster orders are executed and the smaller the price swings. When trading volume is low, even a single large trade can noticeably move the price. That’s why reliable exchanges maintain high liquidity and work with market makers, who help keep the market in balance.

A cryptocurrency’s price is formed by the interaction of supply and demand. When interest in an asset grows, the price rises. When traders sell a coin en masse, the price falls.

For clarity, all active orders are shown in the order book. It displays current bid and ask prices as well as total volume. The difference between the best bid and the best ask forms the spread.

Trading uses three main order types:

• limit order — an instruction to buy or sell at a fixed price;
• market order — immediate execution at the current market price;
• stop order — a tool to limit losses or lock in profits.

Different exchanges may show slightly different prices for the same asset due to trading volume and the number of participants. For example, TRX may cost $0.311 on Binance and $0.313 on KuCoin. These discrepancies are smoothed by arbitrageurs who align prices.

The deeper a crypto exchange’s order book, the smaller the spread and the greater the stability. With low liquidity, slippage occurs when the actual execution price differs from the expected one.

Trading on a crypto exchange consists of sequential stages.

1. The trader creates a buy or sell order for a cryptocurrency.
2. The system analyzes the order book and looks for a matching order.
3. When the conditions match, the trade is executed.
4. The exchange charges a fee.
5. Assets are credited to the user’s balance.

A limit order may wait minutes or hours until the market reaches the desired level. A market order is executed instantly, but the price may be slightly above or below the expected one.

Each completed operation is recorded in trade history and affects the market’s overall dynamics. The charts a trader sees are formed from these data.

On major exchanges, millions of trades are processed automatically. This keeps the market active, and the price always reflects the current balance of buyers’ and sellers’ interests.

To keep the market resilient and ensure trades go through without delays, participants play different roles.

• A maker creates a new order and adds it to the book. Makers provide liquidity, expand available quotes, and help maintain a stable price. The more makers there are, the deeper the market and the lower the risk of sharp price jumps.
• A taker executes an existing order, removing liquidity. Takers finalize trades, so they are responsible for the actual price movement. Taker activity increases trading speed and makes the market more dynamic.

The difference between them is reflected in fees. Makers pay less because they create volume, while takers pay a bit more since they use resting orders. On most exchanges, the maker fee is about 0.08%, and the taker fee is around 0.1%.

When there are enough makers, trades execute quickly and the price remains predictable. If liquidity is insufficient, trading slows, slippage increases, and volatility intensifies.

Order execution depends not only on order type but also on market conditions.

Main factors:

• liquidity level and the number of active orders;
• trading volume of the specific pair;
• trade size, since large orders can move the price;
• market maker and arbitrage activity;
• network technical parameters and block confirmation speed.

On the TRON network, a block is produced every 3 seconds, so USDT TRC-20 trades settle almost instantly. Fast execution is especially important for scalpers and intraday traders who operate on short timeframes. For long-term strategies, price accuracy and fee levels are decisive.

Fees are part of the costs to account for in every operation. Centralized exchanges charge trading fees that depend on participant role. Makers pay less, takers a bit more. On average, a crypto exchange fee ranges from 0.05% to 0.1% of the trade amount.

In addition to the trading fee, there is a network withdrawal fee. Its size is set by the exchange. It’s also worth mentioning deposit fees. Usually exchanges don’t charge for deposits. However, when funding an exchange account from a non-custodial wallet (for example, Trust Wallet), you must pay the blockchain’s internal fee.

On TRON, these costs are tied to consuming Energy and Bandwidth resources. When resources run out, the system automatically burns TRX. To avoid this, traders rent energy via Tron Pool Energy. This service cuts costs by up to 65% and removes the need to keep a TRX reserve on balance.

A trade’s total cost consists of the trading fee, network costs, and possible slippage. Knowing these parameters helps calculate profit and plan a strategy

Decentralized exchanges use a different model than centralized platforms. They don’t have a traditional order book of bids and asks. Liquidity on such platforms is provided by pools to which users supply token pairs, for example TRX and USDT. These liquidity pools enable instant swaps without intermediaries.

Price is formed by an AMM (Automated Market Maker) formula. The token balance in a pool changes constantly, and the system recalculates the rate after each trade. When there is plenty of liquidity in the pool, swaps occur at a stable price and slippage remains minimal. If the pool’s funds shrink, fluctuations become more pronounced and the rate can change faster.

When a user swaps USDT for any coins via a DEX, they send a transaction to a smart contract. The system analyzes the asset ratio, calculates the current rate, and completes the swap within seconds. Which token the fee is paid in and how much it is depends on the chosen blockchain.

The main advantage of DEX is full independence. Funds remain under the wallet owner’s control, and no third party can restrict access. However, decentralization adds responsibility. The user is responsible for security, address verification, and paying gas; otherwise, the transaction may fail.

A crypto exchange is a mechanism that connects buyers’ and sellers’ interests and forms a fair price for assets. Each trade follows a specific sequence in which orders, liquidity levels, and fee sizes play key roles.

Understanding how price is formed and how orders are executed helps a trader control costs and reduce risks. Step by step, crypto trading becomes clear once you know how the system works from the inside.

The next article in the series will cover trade types and the basics of risk management, detailing trading strategies and capital protection methods.
Also read:
What is trading and how does it work — the first part of the series.
Next material: Types of trading and the basics of risk management.

This material is for informational purposes and is not financial advice.