Phemex Review: A Fast-Growing and Disruptive Cryptocurrency Exchange

The cryptocurrency exchange market is growing rapidly and we're seeing a steady influx of new competitors into the scene. One of the newest contenders is the Singapore-based Phemex, a fast-growing exchange that offers both spot markets and cryptocurrency-based derivatives.

Founded in November 2019 in Singapore by veteran Morgan Stanley executives, Phemex has quickly become the fastest growing exchange in 2020. Let’s take a look at the features that make the exchange so successful.

Basic information about the Phemex exchange:

Launched: 2019
Headquarters: Singapore
CEO: Jack Tao
Type: Centralized cryptocurrency exchange (spot and derivatives)

Phemex offers all the features one would expect from a modern cryptocurrency exchange platform. The exchange's contracts support up to 100x leverage, opening up a wide variety of trading strategies. The exchange also offers simulated trading through its "testnet" version, making it a suitable option for beginners and advanced trading alike. Phemex even provides some additional incentives, as users can earn $72 in bonuses by completing various tasks.

Before we take a closer look at all of the features offered by Phemex, let's quickly go through some of the exchange's main pros and cons.

Phemex features review

Now, let's check out the Phemex exchange in a little more detail. In the following sections, we'll be discussing the exchange's supported cryptocurrencies, leveraged perpetual contracts, fees, premium memberships, and other key features.

Premium memberships

Phemex offers three membership tiers. The basic tier is free and gives users access to the perpetual contract markets. New users can receive a 30-day premium trial membership from their friends. Alternatively, users can receive a premium trial by inviting a friend and making trades on perpetual contracts. The premium trial offers access to the spot markets with zero trading fees.

The full premium membership additionally unlocks conditional trading, as well as faster and unlimited withdrawals. Premium membership packages are priced at $9.99 for 30 days, $19.99 for 90 days, or $69.99 for 365 days.

Listed cryptocurrencies

Phemex currently offers spot markets for 4 different cryptocurrencies, while traders can trade 6 different crypto assets through the exchange's derivatives products. This selection is rather small compared to some of the exchange's competitors. Binance Futures and OKEx, for example, both offer a bigger variety of cryptocurrencies for trading.

However, a great feature of Phemex is that the exchange supports withdrawals and deposits in 7 different crypto assets. In this regard, Phemex gives users a lot more options that the average cryptocurrency derivatives platform. Here's the coins you can deposit to and withdraw from Phemex:

• Bitcoin
• Tether USD
• Ethereum
• XRP
• Chainlink
• Tezos
• Litecoin

Leveraged perpetual contracts
Phemex offers perpetual contracts for BTC/USD, ETH/USD, XRP/USD, LINK/USD, XTZ/USD, LTC/USD, and GOLD/USD. Traders can go both long and short on all of these assets and freely choose their leverage in a range between 1x and 100x, depending on the coin. The fee rate for takers is 0.075%, which is in line with industry standards.

Phemex subsidizes market makers with a negative maker fee of -0.025%. This has allowed the young exchange to quickly gain liquidity and traction, giving traders an incentive to add liquidity to the order book, instead of taking out liquidity.

CoinMarketCap, for example, lists Phemex as the sixth largest derivatives exchange for Bitcoin, measured by daily trading volume. On top of that, Phemex is one of only three crypto exchanges that list perpetual contracts for Chainlink (LINK) and Tezos (XTZ).

Zero-fee spot trading

Instead of charging trading fees for their spot markets, Phemex offers membership tiers that allow their premium members to trade without any fees. This makes Phemex especially interesting for high-volume traders.

One downside with Phemex is that the spot markets are not accessible for non-premium users. However, assuming a trading fee of 0.1% otherwise, the annual premium membership is a cheaper option for a trading volume of more $70.000. A single transaction of more than $10.000 can be processed cheaper with a monthly premium membership, or a trial membership.

Currently, Phemex supports four spot makets (BTC/USDT, ETH/USDT, XRP/USDT, and LINK/USDT), although the exchange says that more coins will be listed in the future. While spot trades do not incur any trading fees when using the website or the mobile app, automated traders accessing the exchange through APIs pay a fee of 0.1%.

This is a necessary feature that both allows users to set up automated trading bots, but at the same time limits their usefulness for nefarious purposes such as wash trading.

Other perks

For new users, Phemex offers a welcome bonus of up to $72 on an initial deposit of 0.2 BTC or $1500. Additionally, there is a referral program, which can reward regular users with free premium membership for referring other users. Influencers can also profit from the Phemex All-Star Program, which nets them a commission of 50% from all recruited members and an additional 10% from all recruited All-Stars.

On top of that, Phemex hosts plans to host competitions, which can grant their users an opportunity to make some money on the side. An instance of this is the recently announced Phemex Video Contest, which has a maximum of $10.000 or 1 BTC up for grabs.

The Phemex mobile app

Phemex has created mobile applications for both the iOS and Android mobile operating systems. The application gives users access to most of the functionality of the Phemex exchange even when they're on the go. While we suspect most traders will want to use a derivatives trading platform like Phemex on their desktops, having a mobile version available certainly doesn't hurt.

Is Phemex a safe exchange to use?

The experience of the exchange's leadership shows itself in the security concept for Phemex. Besides protecting their records with double-entry bookkeeping, all funds on the exchange are stored in multisignature cold wallets and only leave cold storage for the purpose of fund withdrawals.

The downside of this is that withdrawals, at least for non-premium users, are only processed in bulk three times a day, which means that a user who wishes to withdraw may have to wait up to 8 hours for her request to be processed. What may sound like a negative point also has its benefits, however. though. For example, the system gives Phemex time to review all withdrawals and stop them if they find that a user’s account has been tampered with.

Their trading software is neatly seperated into different zones for the various trading purposes. These zones are hosted on the AWS Clound and are separated from each other using firewalls, as a mitigating factor against security breaches.

Phemex has chosen C++ for their software development due to the predictable nature of this programming language. They promise 24/7 trading with high performance and transaction throughput, an uptime of 99.99% and seamless system maintenance and software updates.

Phemex review verdict

Phemex is one of the youngest cryptocurrency exchanges on the market, but it’s definitely worth checking out. With only half a year in operation, it already has an impressive track record for growth as the sixth ranking derivatives exchange for BTC/USD trading volume.

In particular, the exchange deserves consideration from high volume traders. With an annual membership at just below $70, the omission of trading fees for the spot markets can quickly pay itself off. Also, derivatives traders may find a valuable alternative to established exchanges, especially if they want to trade perpetual contracts for Chainlink, Tezos, or Gold.

Phemex was developed and is operated by experienced Morgan Stanley executives who have clearly proven the value of their work in their development of a high-capacity crypto exchange with an excellent security concept.

At the moment, the trading opportunities are still a bit limited to seven perpetual contracts and four spot markets, but as more markets get added, there could very well be a bright future ahead for the Phemex exchange.