There's no "avg transaction fee". The transaction fee is derived from the deposit amount, and it's you who chooses the deposit amount (from ~$0.01 to $500) when creating a new rePOWCHA. The deposit amount isn't a fixed $5 that you see on the front page.

What you may be asking is, why is there any fee if there was no abuse. Maybe there shouldn't be. I'm open to removing it.

The practical cost right now is small, since the service just started 2 days ago and has few users. I don't know if the service will be sustainable at scale if there's no abuse. Maybe there will be enough abuse that the service will be sustainable from the 1% "abuse" fee. There would have to be some way for the service to pay for itself.

As a user, a bigger issue may be that the mere thought the user won't have 100% of their deposit refunded may deter them from using the service. I'm more inclined to remove the "no abuse" fee for this reason.

On the other hand, as a web app that integrates rePOWCHA and with a large userbase, the web app may want to monetize this user interaction.

So I don't know what will work best. There's probably a balance there.

Since the fee seemed rather expensive to you, what fee structure would you suggest for the "no abuse" case?

Thanks for detailed reply! I didn't mean to imply that "it's expensive to me" just wondering about the general economics of this exchange because crypto payments are notorious for awkward fee calculations.