Revenue Models (for Crypto Trading Bots) Compared: Crowdfund, FOSS, Referral Fees, Subscription, Profit Share

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Introduction

During my ages-long hobby of creating bots to offer to the general public, I’ve ran into a question that most entrepreneurs will face at some point: What sort of revenue model will I employ? Let’s look at some common ones in my niche and compare.

Crowdfund

Probably my favorite on paper is crowdsourcing the money to run a bot. It has some distinct advantages: if you have more and more capital on one account, exchanges like Binance have less and less fees.

For a lot of my bots, the edge over the market comes from incremental increases in the amount of profit each trading cycle brings in — and, for instance, the market maker bot’s incomes are almost entirely dependent on the fee rebates (where applicable) and the % between bid and ask. Having even less fees when trading with this much vitality is important — and can create significant boosts to yield.

The detriments are, of course, that you then become an extra single point of failure and people don’t tend to trust their funds to these sorts of operations. ‘Do Your Own Research’ is in full swing in…