Before diving into the business of Cryptocurrency exchange development, decide the type of trading platform that you wish to launch and, according to the availability of resources, develop the platform from scratch or acquire a reliable white label exchange solution.
A cryptocurrency trading software allows the different buyers and sellers to buy, sell, and exchange various digital assets with each other by performing transactions quickly. Most of the revenue is made by the exchange owner in the form of a trading fee.
There are different types of cryptocurrency exchanges, such as
User to admin exchange - It gives intermediaries the responsibility to execute the buy and sell orders. Admins monitor the functionality of the platform and control the user’s funds.
Decentralized exchange - No intermediary exists to facilitate the transactions between two parties. Hence, users can expect more security and reliability.
Hybrid exchange - It provides the perfect balance between both centralized and decentralized exchanges by prioritizing sufficient liquidity and top-notch security. It eliminates all their inherent disadvantages and ensures an effective trading platform.
Ads based exchange - Certain platforms like Localbitcoins and Remitano support the issue of advertisements to showcase the benefits provided to investors.
Whenever there is a conflict between development from scratch or procuring a white label solution, it is better to opt for the latter. Their modules are readily developed and tested and are available at an affordable cost.
Development from scratch requires a huge investment in resources and time and needs a large focus on technology implementation and brand deployment.
Other factors to consider during Cryptocurrency exchange development
Check for the time and budget constraints - The higher the time needed for completing the project, the greater the budget. Hence, take into account this factor while hiring your team for deployment.
Choice of technical features - Ensure availability of sufficient liquidity in your exchange by forming API’s with the leading exchanges in the market. Make sure that your platform works seamlessly across multiple devices and different operating systems. Offer an Initial Exchange Offering and Security Token exchange facility. Provide atomic swaps and preferred trading facilities to give more freedom to your participants. Amplify your trader’s earning potential by rendering a margin trading feature. Introduce a reward-oriented referral program for your trader for bringing traffic to your exchange. Establish a robust admin panel that acts as a central management console to monitor the status of your operations. Create a trading bot that provides automated settlement saving time and money. Render real-time analytics based on price changes and market movement to improve the decision making of your investors. Invest in top-notch security measures such as two-factor authentication, database encryption, jail login, and anti-DDoS protection.
User interface - It should be comfortable to handle and should value to the user. A simple registration procedure would serve as a good start. Glitch-free access to accounts, history of transactions, provision of infographics, and charts are some features to incorporate in a great user interface. While developers can focus on the core functions to implement in the system, a reliable external agency could concentrate on the UI design.
Trading engine - It plays a critical role in matching the different orders raised simultaneously. A detailed order book is necessary for investors to know their interests. It executes transactions quickly and helps in calculating the account balance of various investors.
Wallet - Ensure that your wallet supports the leading cryptocurrencies and fiat currencies and is multi-signature enabled. Apart from storing the coins of investors safely, it helps in the transfer of digital currencies. Have a mix of both hot and cold wallets for efficient fund management. Add authentication steps to verify each transaction.
Challenges to face during Cryptocurrency exchange development
Rise in competition - Cryptocurrencies have created a huge revolution as big businesses, small startups are interested in cultivating their growth. Since the barriers to entry are less because it is still a largely unregulated industry, competition is quite intense now.
Problems in scalability - Every new platform will have to equip itself to handle at least a million users accessing the platform from various locations simultaneously performing different functions. Lack of scalability leads to delays in fund transfer, slow processing of transactions, and frequent lags in the platform. Hence, a robust backend architecture needs to be established to manage the increasing load on the firm’s server.
Additional expenses would have to be incurred on setting up the server, the volume of the coin or token that the firm wants to integrate into their platform, and regular maintenance.
Ultimately, the cost of cryptocurrency exchange development will vary from one firm to the other depending on the customization of the features, complexity of the project, and the skills of the team members involved in the process.
Take into account all the above-mentioned factors mindfully before deciding to enter Cryptocurrency exchange development. Reach out to the well-versed developer team of Blockchain App Factory for getting result-oriented solutions at an affordable cost.
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