What Is GDAX?

GDAX, or Global Digital Asset Exchange, was a cryptocurrency exchange created to offer advanced trading tools beyond those available on Coinbase’s simpler platform. It targeted professional traders and supported multiple cryptocurrencies and fiat currencies. The platform’s history, purpose, and later changes reflect its role in the evolving crypto market.

History and Evolution

GDAX launched in 2015 as part of Coinbase’s expansion to serve more experienced users. Initially called Coinbase Exchange, it was rebranded to GDAX to highlight its focus on professional crypto trading. It quickly became popular for trading Bitcoin, Ethereum, Litecoin, and later Bitcoin Cash.

Over time, GDAX grew to handle high trading volumes and introduced features like market orders and automatic trades tied to price limits. Security measures were strong, with most customer funds stored offline and insurance covering US dollar deposits.

Purpose and Key Features

GDAX aimed to separate casual users from active traders by providing a sophisticated platform. It supported multiple currency pairs, including crypto-to-crypto and crypto-to-fiat conversions (USD, EUR, GBP).

The platform used a maker-taker fee model, charging different fees for liquidity-adding and liquidity-taking trades. Users also benefited from free deposits and withdrawals, making it cost-effective for high-frequency trading.

GDAX offered tools like target price orders, letting traders automatically buy or sell when prices hit set points. This made the platform suitable for users needing precise market control.

Rebranding to Coinbase Pro

In 2018, GDAX was renamed Coinbase Pro to better align with Coinbase’s focus on serving individual active traders. Coinbase described this change not just as a new name but as a platform overhaul dedicated to professional trading needs.

The rebrand also introduced a consolidated portfolio view called “My Wallets” to help users manage orders and balances easily. By 2019, GDAX’s website redirected users to Coinbase Pro, which fully replaced the original platform.

Coinbase Pro retained GDAX’s features while incorporating improvements and expanding its services, including integration with new technologies like decentralised token relays.

Supported Cryptocurrencies and Trading Pairs

GDAX focused on providing access to a select group of major cryptocurrencies with strong market presence. The platform offered trading pairs mainly involving fiat currencies like USD, EUR, and GBP, alongside popular digital assets. This approach aimed to balance liquidity with the needs of professional and institutional traders.

Bitcoin, Ethereum, and Litecoin

Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) formed the core of GDAX’s cryptocurrency offerings. These assets were chosen for their wide adoption, market capitalisation, and trading volume. GDAX supported direct trading pairs between these cryptocurrencies and major fiat currencies.

The platform allowed users to trade BTC/USD, ETH/USD, LTC/USD, and their equivalents in EUR and GBP. This gave traders flexibility in managing exposure across different markets. The ability to switch quickly between these pairs supported a variety of trading strategies, including arbitrage and hedging.

Adding Bitcoin Cash and Other Assets

Besides the main three, GDAX expanded its offerings to include Bitcoin Cash (BCH) and USD Coin (USDC). BCH was added due to its relevance as a Bitcoin fork with a dedicated following. USDC served as a stablecoin, allowing traders to move funds between fiat and crypto with minimal volatility.

While GDAX did not support an extensive range of cryptocurrencies like some other exchanges, it did include assets like Ripple (XRP) and Tezos (XTZ) at various points. The platform focused on assets with sufficient demand and regulatory approval to ensure reliable trading conditions.

Asset Liquidity and Availability

As part of Coinbase, GDAX benefited from deep liquidity pools that helped reduce slippage on trades. High liquidity was especially important for handling large orders efficiently, attracting professional and institutional traders.

However, users in some countries faced restrictions on asset availability. For example, traders in Singapore, Canada, and Australia had access only to Ethereum and Litecoin among the main cryptos. This selective availability was due to regional regulations and compliance requirements.

GDAX primarily supported USD trading pairs but expanded to include EUR and GBP, increasing access for international users. The limited but carefully chosen assets helped maintain liquidity and market depth across all trading pairs.

Trading Tools and Order Types

GDAX offered a range of trading tools and order types designed to give traders precise control over their cryptocurrency trades. It supported various order types that help manage risk and timing for buying or selling digital assets. The platform also included an advanced interface with live market data and charting features to support technical analysis.

Market Orders

Market orders on GDAX allowed traders to buy or sell cryptocurrencies immediately at the best available current price. This type of order ensured fast execution but did not guarantee the price, as it depends on market liquidity at the moment.

They were useful for traders who prioritised speed over price, such as when entering or exiting positions quickly. Market orders are simple and direct, making them ideal for beginners or those looking for straightforward execution in fast-moving markets.

Although convenient, market orders could result in slippage if the market price changed rapidly during execution, especially on less liquid trading pairs.

Limit Orders

Limit orders enabled traders on GDAX to specify the exact price at which they wanted to buy or sell cryptocurrency. These orders only execute when the market reaches the specified price or better.

This ordering type gives traders control over entry and exit points, helping them to manage buying or selling at desired price levels. Limit orders can also reduce the risk of slippage compared to market orders.

Users could set buy limit orders below the current price and sell limit orders above it. Until the price matched or crossed the limit price, the order stayed open or “pending” in the order book.

Interface and Charting Tools

The trading interface on GDAX featured real-time order books, showing live buy and sell orders for various cryptocurrencies. This transparency helped traders understand market supply and demand at any moment.

Advanced charting tools were available for technical analysis, including candlestick charts, volume indicators, and price movements over time. These charts assisted traders in making informed decisions based on historical data and market trends.

The platform’s order form was designed to quickly place market, limit, or stop orders with clear input options for trading pairs and quantities. Overall, GDAX’s interface combined detailed data with ease of use, appealing to both novice and professional traders.

Security Features and User Protection

GDAX has built its reputation on strong security measures designed to protect user accounts and funds. Its layered approach uses both technology and regulatory safeguards to reduce risks. This helps users trade with confidence while minimising exposure to theft or hacks.

Two-Factor Authentication

GDAX requires users to enable two-factor authentication (2FA) for account access. This adds an extra step beyond just a password. Typically, it works through apps like Google Authenticator, which generate time-sensitive codes users must enter.

2FA protects accounts even if a password is compromised. It prevents unauthorised logins by requiring a physical or mobile device to confirm identity. GDAX supports fingerprint authentication on its mobile app as an additional security layer, enhancing account safety without sacrificing ease of use.

This security feature is critical in stopping hackers from accessing accounts and making unauthorised trades. It also helps maintain trust among both retail and institutional investors.

Cold Storage of Funds

Most user cryptocurrencies held on GDAX are kept in cold storage wallets. Cold storage means the funds are kept offline, away from internet access, which drastically lowers the risk of hacking or theft.

Only a small portion of funds are stored in hot wallets, reserved for active trading and withdrawals. Keeping over 90% of digital assets offline gives GDAX a strong defence against security breaches.

Cold storage wallets use advanced encryption and multiple layers of security, ensuring digital assets remain secure. These measures reflect industry best practices, similar to those used by the Coinbase wallet, which offers integrated storage and security features.

Regulatory Compliance

GDAX operates under strict regulatory oversight, which requires compliance with financial laws and standards. The platform is insured by entities like the FDIC, providing additional protection to fiat currencies deposited by users.

Regular security audits are conducted to ensure adherence to policies and detect vulnerabilities. Compliance also involves transparent reporting and safeguarding user data with advanced encryption during transmission and storage.

This regulatory adherence helps GDAX maintain legitimacy and build trust. Users benefit from a platform that meets government and industry rules, reducing risk and supporting long-term reliability.

GDAX Fees and Comparison with Competitors

GDAX offers a trading fee structure that favours active traders and market makers. Its fees are generally lower than many other popular cryptocurrency exchanges. When compared to Coinbase, Binance, and Kraken, GDAX stands out for its maker-taker fee model and competitive rates for higher volume traders.

Fee Structure and Maker-Taker Model

GDAX uses a maker-taker fee system where makers, who add liquidity by placing limit orders, pay lower or no fees. Takers, who place market orders and remove liquidity, pay higher fees.

• Maker fees can be as low as 0%, encouraging users to add liquidity.
• Taker fees start at 0.30% for lower volume traders.
• Fees decrease with higher trading volumes, dropping to 0.20% for trades over $10 million in 30 days and as low as 0.10% for trades exceeding $100 million.

Users can deposit and withdraw fiat funds without fees but must pay blockchain fees for crypto transactions. This model benefits traders who provide liquidity and those with large trade volumes.

Comparison with Coinbase, Binance, and Kraken

Coinbase, the parent company of GDAX (now Coinbase Pro), charges higher flat fees compared to GDAX’s tiered approach. Coinbase’s fees include a spread and can reach over 3% for debit/credit card deposits, while GDAX relies on lower, volume-based trading fees.

Binance generally offers some of the lowest fees in the industry, charging 0.10% for both makers and takers, with discounts available if users pay fees using Binance Coin (BNB).

Kraken has a similar maker-taker model to GDAX but charges between 0.16% and 0.26% for takers and 0% to 0.16% for makers. Kraken supports more coins but has a slightly more complex fee schedule.

GDAX’s fee structure suits experienced traders and those with large trade volumes. Its low fees make it attractive compared to Coinbase’s simplicity-based model and the broader offer from Binance and Kraken.