Fees play a crucial role in the incentive structure of both Bitcoin and JoinMarket. They form the basis for the economic incentives of both systems. In Bitcoin, you pay fees to a miner in order for your transaction to be included in a block. The higher the fee you are willing to pay, the higher the likelihood that your transaction will be included quickly.
In JoinMarket, you pay fees to market makers in order to use their liquidity to your advantage.
Consequently, when you are sending a collaborative transaction in Jam—or when you are using the scheduler to do multiple transactions—you have to pay fees to miners and makers. How high these fees are depends on market and mempool conditions.
Of course, you can offer liquidity yourself via the Earn functionality, allowing you to be on the receiving end when it comes to maker fees.
:octicons-arrow-right-24: Earn
When doing a collaborative transaction via the Send or Jam tabs, you are taking liquidity offers from others, effectively becoming a market taker.
How much you will pay in maker fees depends on the fee market of the current offers. You can get an overview of fees by inspecting the order book.
:octicons-arrow-right-24: FAQ: How high are the fees that I do have to pay?
:octicons-arrow-right-24: Orderbook
Just like all users of onchain bitcoin, you will have to pay transaction fees to miners.
Note that collaborative transactions are larger, in terms of bytes, than "regular" bitcoin transactions. Since the cost of an onchain transaction is determined by its size in bytes—not by value transferred—a collaborative transaction is more expensive than a simple spend.
:octicons-arrow-right-24: FAQ: How high are the fees that I do have to pay?
:octicons-arrow-right-24: Mempool
As mentioned above, you can use the Earn tab to earn maker fees yourself. Simply choose an offer type, select how many fees you would like to earn, and press "Start Earning!"
Make sure to check the orderbook to compare your offer with current market rates. If your offer isn't competetive, nobody will take you up on it and you will earn zero sats.
:octicons-arrow-right-24: FAQ: How much can I earn?
:octicons-arrow-right-24: Orderbook
The Market Makers put up their coins in a hot wallet to be offered for liquidity, which means they face the following inconveniences:
- they are exposed to the risk of getting their coins stolen
- they incur an opportunity cost because they could be using these bitcoins to do something else with them. This is further amplified if additional coins are locked in a Fidelity Bond
It only seems fair that they get paid for all those inconvenience. So how come the profits are minuscule?
With the market dynamics described above, even since the early days, its been observed that makers make very little profit from offering liquidity. This does not mean the market is "broken" it just reflects the reality of the situation. There is much more supply than demand for CoinJoins.
This whole thing is a market and it does what markets do well, price in all the relevant information/risks/costs.
Another fact to consider is that the Bitcoin network itself has a cost to use - Bitcoin transaction fees.
Even though most of the times fees seem to be very low, when constructing a CoinJoin the transaction gets big(each input/outputs adds extra data to the transaction). Because of this factor, CoinJoins will start up starting with a pretty big baseline fee which is taken by the miners, so not that much left for the makers.
We can summaries the trade-off between a maker and a taker like so:
- Makers: get kinda-free long term fairly good mixing
- Takers: non-free short term better mixing
As a taker, you get to pick the exact amounts you want to mix, and as such you will not be left with any Doxxic Change. Plus, you get to pick who you mix with, so you know the makers, not the other way around, giving a slight privacy advantage.
Worth clarifying that the quality of a CoinJoin is the same for a maker or take, the small advantages/disadvantages are peripheral and have to do with what happens after the CoinJoin.
All fees are denominated in sats. Use one of the tools below to convert them to fiat:
See also "a note on fees" from the JoinMarket documentation.