Cryptocurrency exchanges have been gaining huge traction among global investors in the recent past and are continuing to gain rapid momentum. Especially in the year 2019, the growth has been quite evident. The number of exchanges, their quality, variety, etc., have accomplished massive transformation over the years. This has paved the way for investors with groundbreaking business opportunities. Every day, there is a boost in the number of exchanges with newbies entering the market, launching their own exchanges with the advancement in features and functionalities.
If you are one of those aspiring entrepreneurs looking to launch your crypto exchange, the time is never better than now. But, with the evolving demand and popularity, it is essential to execute authentic development for your exchange to sustain in the long run and survive the existing competition. This blog will help you learn the essential elements to develop one. Let’s begin with a short glimpse of what crypto exchanges are.
Crypto exchanges – A quick peek!
Crypto exchanges are platforms that allow traders to exchange their cryptocurrencies for other cryptocurrencies, digital assets, or fiat money. Crypto exchanges are underpinned by blockchain technology, which is a form of a distributed ledger. The blockchain technology helps record, secure, and verify every transaction that happens on the exchange platform. Crypto exchanges are completely digital and come along with their own set of benefits.
Crypto exchanges can be classified into three types,
- Centralized exchanges
- Decentralized exchanges
- Hybrid exchanges
Here, we are going to discuss decentralized exchanges in detail, which is one of the most preferred exchanges among potential investors in the global market. What are decentralized exchanges? Let’s take a brief look.
What are Decentralized cryptocurrency exchanges?
A decentralized exchange, DEX is a crypto exchange platform that allows users to exchange directly peer-to-peer without involvement from any central authority. In this exchange, there is no third party holding the user funds. Instead, the users get full control of their funds and are responsible for every decision and action in the exchange.
In simple terms, in a decentralized exchange, the users can log in to the account and their crypto wallets efficiently. And to commence transactions, they send a buy/sell request to the exchange. The exchange then matches the order from a relevant request and executes the transactions automatically with the help of smart contracts. Decentralized exchanges have been in favor of the customers because of the several advantages involved with it. The advantages are listed below.
Key advantages of decentralized exchanges
- No involvement from third parties
Decentralized exchanges enable direct trades between customers, and hence there is no involvement from any third party.
- High-end security
As decentralized exchanges eliminate third party involvement, it is more secure compared to other exchanges and provides the users with risk-free business experience.
- Sole ownership
With decentralized exchanges, the user is entitled to every decision regarding the exchange, the transactions, fund management, etc.
- Blockchain Immutability
As mentioned earlier, decentralized exchanges are backed by blockchain technology that provides immutability, i.e., transactions once recorded cannot be altered/ erased. This ensures high-end safety and security for the users and their information.
These exchanges are controlled by the users themselves, and they are offered transparency to everything that’s happening on the platform, every transaction and every decision.
Decentralized exchanges are highly scalable when compared to other exchanges. And as they are entirely controlled by users, they can be efficiently customized according to their preferences.
These are the essential benefits of a decentralized exchange platform. To develop your own decentralized exchange platform that is simon-pure and profitable, here are the most crucial elements you need to know about!
The most salient components of a decentralized exchange platform
- Dominant trade matching engine
As decentralized exchanges are not controlled by any central authority, and transactions are automated, this is one of the most important attributes to be looked into. A powerful matching engine with high performance will match the right orders and ensure a smooth process. It should also consist of trading bots and order books.
- User-friendly interface
The exchange should be designed efficiently and in a user-friendly manner. Also, it should support both web and mobile applications to provide users with convenient trade experience.
- Admin backend panel
With the admin panel, the exchange owners should efficiently be able to manage their funds and make desired decisions regarding the exchange.
- Liquidity API integration
Liquidity plays a significant role when it comes to crypto exchanges. High-volume liquidity integration will enable users with instant, efficient buying/selling and makes the exchange more favorable for the investors.
- Enhanced security
The exchange should be integrated with multi-layered security protocols for a seamless experience, and the crypto wallet should be enabled with multi-factor authentication, email login, etc., for the utmost protection of the user’s interest.
These are the fundamental integrations that need to be given utmost attention while building the exchange.
We, at Blockchain App Factory, work with a team of developers who are pioneers in cryptocurrency and blockchain development services. Hence, we will offer 100% pre-tested, reliable white label solutions for your decentralized cryptocurrency exchange development. The white label solutions include qualified technical and security integrations, advanced blockchain technology, and features that will uplift your business among potential global customers over the existing competitors.
We customize your exchange according to your personal preferences at cost-effective prices. And also, our unmatched expertise will assure real quick services, and the exchange will be ready to hit the market in no time. To find out more, reach out to our team of experts!