Guide towards sustainable Crypto exchange platform development
The usage of cryptocurrencies has exceeded expectations. Small startups to big financial institutions are interested in adapting their operations to include cryptocurrency. While enterprises are looking to earn a handsome revenue by investing in Crypto exchange platform development, users are looking to rake in their popularity by making profits through trading.
An ideal platform that suits a firm’s operations is needed for the smooth buying and selling of digital assets. Since the features would vary from one exchange to another and users will have different levels of knowledge about cryptocurrencies, let us look at some factors to consider when deciding to involve in Crypto exchange platform development.
- Method of purchase – Some cryptocurrency exchanges accept deposits from users through various methods like bank transfer, Paypal, debit cards, and credit cards. For those users who do not possess any cryptocurrency before joining a platform, they must utilize fiat currency to enter the market. Take note of the time involved to complete a transaction. While some platforms do it within a few minutes, others take a few days or weeks.
- Support for tokens – Most of the exchanges are compatible with the leading cryptocurrencies like Bitcoin and Ethereum. While other platforms support a long list of altcoins, some exchanges are keeping up with the trend by offering stable coins to hedge against the volatility that is common in the cryptocurrency market.
- Fees charged – The revenue model of a crypto exchange platform is determined by the kinds of fees it charges. They make money by levying transaction fees, withdrawal charges, and fees for executing orders. The total fees charged can judge a user’s decision to opt for a platform. Some platforms offer discounts if their own token is used to complete transactions. Sometimes, charges are levied only on sales leaving purchases to be made free of cost.
- Centralized, Decentralized, or Peer to Peer – Choose either a centralized, decentralized, or a peer to peer platform, which are the major types currently in operation. Centralized exchanges operate like an organized marketplace for buying and selling cryptocurrencies. Fees are charged for every transaction. Though they offer enhanced liquidity, security is still a major concern. Decentralized exchanges offer more freedom to traders and eliminate control by an authority. Funds are not stored on the server. Though liquidity is less, they have robust security mechanisms in place. P2P exchanges permit direct interaction between buyers and sellers without the interference of intermediaries. It gives a secure and trustful environment for exchanging cryptocurrencies and avoids network congestion that is common in centralized exchanges. They strike the right balance between liquidity and security.
- User interface – User interface refers to the ease at which traders can handle the basic operations. It should be suitable for both amateurs as well as professionals. It is subjective and varies from one user to another. Only those crypto exchange platforms which possess an excellent user interface will witness huge growth in their transaction volume. It will also help in boosting the market value of the exchange.
- Security aspects – While earning high returns is important, the safety of cryptocurrency is essential. Hence, the crypto exchange platform should implement top-notch security measures, such as two-factor authentication, encrypted database, and password-protected user access. A certain portion of funds must be kept in cold storage.
- Presence of adequate liquidity – It refers to the ability to easily convert an asset without influencing the prevailing market price. The availability of sufficient liquidity helps in handling the huge trading volume and managing the various risks involved. An increase in the number of new buyers and sellers will boost liquidity. Tying up with other leading exchanges in the market will uplift liquidity.
The points to take into account while starting a Crypto exchange platform
- Analyze the market conditions – Study how the industry is functioning currently. Look at the price range of various cryptocurrencies, interference of regulatory bodies, the trending features before entering the market. Make sure you answer all your doubts before launching your crypto exchange platform.
- Fix the location – Ensure that you set up your operations in an ideal location, where friendly cryptocurrency regulations are in place. It should depend on your business potential and requirements. Very few countries have deemed cryptocurrencies as illegal. Some nations like the USA, UK, Switzerland, Singapore, Malta, and Japan welcome the existence of crypto exchange platforms.
- Complying with the regulations – For ensuring smooth operations, ensure that you follow the regulations laid down by authorities with due diligence. Non-compliance to existing guidelines is dangerous as it can lead to cancellation of license and increase the overhead costs.
- Hire a competent legal team – To guide your crypto exchange platform development process in the right direction, hire a well-versed legal team. They will help you to conduct the KYC (Know Your Customer) verification process smoothly. Their assistance would also be required to comply with the AML (Anti Money Laundering) guidelines. Users would be asked to show their respective identity proof.
Must-have Features in a Crypto exchange platform
- A dedicated dashboard to monitor daily operations and trade movements.
- Support for the leading crypto and fiat currencies.
- Technical support provided round-the-clock in multiple languages.
- Numerous payment methods for quick settlement of transactions.
- An accurate matching engine for robust order management.
- Value-adding options like atomic swaps, preferred trading, and trading bots.
- Compatibility with multiple devices and operating systems.
- Integration with different types of wallets.
Hence, keep a note of all the above guidelines before indulging in crypto exchange platform development. Team up with a reliable and experienced company that understands your business requirements and delivers customized solutions. Due to the advancement in the cryptocurrency industry, the time is ripe for crypto enthusiasts and investors to reap rich benefits.