Home Finance Creating the Crypto Exchange Platform: Step-by-Step Guide

Creating the Crypto Exchange Platform: Step-by-Step Guide

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How to Create Your Own Crypto Exchange

The cryptocurrency continues to conquer the global market. The recent IPO of Coinbase has once again proved the value of developing reliable digital currency platforms. Moreover, crypto is gradually being recognized as legal tender around the world.

However, Coinbase is just one of the dozens of other platforms that allow you to buy and sell Bitcoin or other cryptocurrencies.

At the same time, it’s not that hard to create a crypto exchange because it has some benefits. 

Core Advantages of Launching a Cryptocurrency Exchange

But before we describe the process of creating a cryptocurrency exchange, it’s worth learning about the benefits of owning such a platform.  

Profitability 

A successful crypto exchange always makes a profit, regardless of its level. The primary source of income is trading commissions. It’s the percentage of the deal amount between the buyer and the seller that the exchange charges.

If you decide to start a cryptocurrency exchange, you need to сhoose the amount of commission. Quite often, the threshold for the transaction amount is used, at which the commission is reduced. For example, the regular fee is 3%, and for a deal of $1000 or more, it reduces to 2%. 

Access to the Blockchain

The development of blockchain technology is gaining momentum, and millions of people worldwide use it. When you create your own crypto exchange, you get access to the latest updates in Blockchain technology. That’s why your clients can be assured that their transactions are fully secured. 

The Way to Success

A cryptocurrency exchange is a full-fledged online business. Therefore, after launching the platform, you need to take your best shot in developing your own business.

It is complicated to operate such a business as it’s tied with significant risks. However, for this, you will be rewarded with satisfied customers and trouble-free operation. As it is said, what goes around comes around.

Technical Side of Launching a Crypto Exchange

We learned the nuts and bolts of launching cryptocurrency exchange software. But now, let’s discuss how to do it. 

Building the Cryptocurrency Exchange Platform

The creation of a cryptocurrency exchange is divided into several stages. Let’s dive deeper into each of them. 

Development

Developing a blockchain-based cryptocurrency exchange solution is a very difficult task. Therefore, it is extremely important to resolve the issue of initial development.

If you’re sure about your technical and programming experience, you can start to develop the exchange in-house. Further, you need to assemble a team of experienced engineers and developers who have previously worked with blockchain solutions or created FinTech apps that accept cryptocurrency payments.

If you don’t have enough experience in these fields, it’s better to look at White Label solutions. Some companies offer software that can be purchased and customized to fill your demands. With that, you can make it easy and quick to create cryptocurrency exchange and benefit from it.

If you have technical experience but don’t want to spend a lot of time launching an exchange from scratch, look for open source solutions. You can find ready-made crypto solutions created by other developers on GitHub. But if you decide to take that path, check the code for fraudulent functions. 

Trade Engine

Just as a car needs an engine, a cryptocurrency exchange needs a trading module. Here, users will buy or sell cryptocurrency, check the order book and trade balance, and trade crypto assets.

Since the trading module is the most critical part of the White Label crypto exchange, make its development a top priority for your team. 

User Interface

It’s a place where your customers interact with the cryptocurrency exchange directly. That’s why it needs to be user-friendly, intuitive and seamless. 

First and foremost, make sure you have a beautiful design that will attract your users. Next, you should check that creating an account is straightforward. In addition, the website should have individual modules with price charts, wallet balances, and opportunities for deposit and trading. 

Maintenance 

It’s another essential aspect when it comes to creation of the cryptocurrency exchange. The platform needs to operate smoothly. The best way to ensure the system’s sustainability for the long term is to develop the API. It’s a simple way to attract new developers to optimize your cryptocurrency exchange software.

In addition, you need to add the feature for reporting bugs and features that are working incorrectly. 

Main Features of the Crypto Exchange

When creating a crypto exchange, it is essential to add features that attract potential traders and investors.

Wallets

Digital assets will be stored here until the trader sells, withdraws or exchanges them for another asset. When building a top-notch platform, make sure to offer hot and cold wallet support.

Hot wallets are called online storage of cryptocurrencies (as on exchanges). Cold wallets are separate devices (unique hardware wallets or USB drives). A high level of security defines the latter since they don’t have a permanent connection to the Internet. 

Transaction Speed

Customers expect transactions to proceed quickly. Еhere is an average of 7 Bitcoin transactions per second. The final speed depends on the speed at which the miners process the operations. And you must do your best to ensure that transactions are processed as quickly as possible.

The clue is your reputation depends on this. If you fill orders quickly, your customers will be happy with the service. But if there are constant problems with this, traders will look for another exchange.

Operating a Cryptocurrency Exchange

After developing and launching the White Label crypto exchange software, you need to follow some rules to keep it working smoothly.

Security

Users need to be sure that their credentials are well protected. Therefore, it’s better to pass the KYC (Know Your Customer) procedure, ensuring safe transactions.

Also, the presence of Two-factor Authentication, verification, and strong passwords has a beneficial effect on the exchange’s security.

Regulation

Cryptocurrency regulation is still different around the world. Somewhere the crypto was recognized as legal tender, and somewhere operations with digital assets were banned. If you want to accumulate a loyal target audience, you’ll need the help of lawyers.

Before entering the global market, make sure to comply with the laws of each country in which your users live.

Banking and Liquidity

We should also cover the issue of building relationships with payment systems. When looking for a financial partner for a future white label cryptocurrency exchange, look for banks and countries with loyal crypto policies. For example, there are countries of Northern Europe and the United States.

It is also vital to maintain liquidity, which directly affects the reputation of your cryptocurrency exchange platform. You can stimulate trading naturally by buying or selling various digital assets. However, if you want to scale your business, check out reliable liquidity providers.

Customer Service  

The final stage on the road to success is prompt customer support. Managers must be experts in cryptocurrencies and trading, as well as react quickly to customer requests.

Your business is directly related to your customers. And if you can meet their demands, they will continue to use your exchange and recommend it to others. 

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