Gate Exchange Faces Criticism for High Fees
The renowned digital exchange, Gate.io, is feeling the brunt of user outrage due to excessive fees on transactions involving BRC-20 tokens, particularly the "ordinals".
ORDI, being the first-ever BRC-20 token, originally acted as a meme to demonstrate the potential of this new digital asset standard. This inspired numerous startups to create tools for minting and storing these so-called "ordinals".
On May 8, Gate.io became the first trading platform to list five BRC-20 ecosystem tokens:
- ORDI
- VMPX
- MEME
- BANK
- PEPE.
This move solidified Gate.io's position as a leading exchange that listens to traders' demands and provides them access to the most trending tokens.
As BRC-20 tokens grew in popularity, Gate.io saw a significant surge in the number of deposits and withdrawal requests for these tokens. However, the platform announced that it would enable memecoin withdrawals only when it deems it safe for system stability.
On May 19, withdrawals were initiated, but rather than receiving praise, the exchange was met with hundreds of angry Twitter posts. Accusations of greed, fraud, and commission manipulation were levied against the exchange.
Initially, the fee was set at a staggering 65 ORDI tokens, approximately $800 per transaction. The community was so shocked that they inundated the exchange's official channels with outraged messages, some even containing threats directed at the platform's management. This prompted Gate.io to reduce the fee to 5.58 ORDI tokens, which still amounted to over $65. However, at the time of writing, Gate.io is not prepared to make further reductions.
The astronomical cost of withdrawing ORDI has posed a significant hurdle for traders looking to move their assets to external wallets or other exchanges. Furthermore, the falling price of the ORDI token exacerbated the problem, making withdrawal fees appear even more disproportionate. In many cases, transferring meme coins to personal wallets became pointless. Now, some platform users believe that if the price of ordinals falls further, it might be more economical to simply abandon their meme coins, as the cost of withdrawing them would approach their total value.
Gate.io's behavior has cast a shadow on its reputation as a reliable exchange, and has undermined its credibility within the crypto community. Traders expect exchanges to offer a fair and transparent fee structure that aligns with market standards. But in this case, they've been confronted with unethical practices and excessive speculation by the platform's founders.
The exchange's management will need to work diligently to rebuild user trust. Their perceived greed has resulted in substantial reputational damage and could impact the platform's future operations.
