Cryptocurrencies have been the talk of the town ever since their advent, and in the recent past, they have been disrupting every major industry and the fiat monetary transaction system. Experts from the crypto space have predicted that cryptocurrencies have all the potential to gain the upper hand over financial services and banking institutions in the next few years, and cryptocurrency exchanges will capture a major share of the growth.
Cryptocurrency exchanges are the key access point that connects users to a wide range of cryptocurrencies. It provides the opportunity for users to exchange their cryptos in the swiftest, secure, and seamless manner, and boost their profit revenues. This is why, more and more traders are approaching cryptocurrency exchanges each day. And there is no better way to make use of this favourable situation, and amplify profits than getting started with your own cryptocurrency exchange development.
In this highly competitive environment, it is important for you to get to know the essentials for your exchange development, to ensure a solid foundation for your business. So, let’s dive in and find out what they are.
Key steps to ensure a successful cryptocurrency exchange development
- Choosing the right type of exchange
Cryptocurrency exchanges are classified into different types, each with its own characteristics. It is important you choose the right one that fits your goals. The type of exchanges are as follows,
- Centralized exchanges– Centralized exchanges work similar to a traditional stock exchange, where the exchange depends on a central authority or a third party to control the user funds and transactions that happen on the exchange. They are currently the most commonly used exchanges among investors.
- Decentralized exchanges- Decentralized exchanges work contrary to a centralized exchange. There is no central authority or any intermediary involved to facilitate transactions in the exchange, and the user gets entire control over their funds.
- Hybrid exchanges– Hybrid exchanges are a combination of both centralized and decentralized exchanges. Simply an enhanced version eliminating the disadvantages in both.
- Extensive Market Research
It is mandatory that you go through an in depth market research before commencing the development of your crypto exchange platform on aspects such as the important elements to be integrated in your exchange, necessary technical and security features, suitable locations and legalization, the prices of various cryptocurrencies, their demand, and market conditions to implement the right ones to your exchange, analyzing the competitors and what they offer to further improve your exchange to get ahead of them etc. It is a wise choice to get advice from market experts on legal and financial aspects of your exchange development.
- Determining the operational location and obtaining license
You have to carefully analyze and choose the right location that allows operation and easier access for launching and running cryptocurrency exchanges. Once you choose the operational exchange, you need to obtain a proper legal license to commence your business and enable smooth functioning.
- Complying with regulatory and KYC norms
Once you have decided your location, you must thoroughly check for the regulatory complaints based on your location, as regulations differ from country to country. You have to comply with all the regulatory frameworks, and also follow the KYC( Know Your Customer) and AML( Anti-Money Laundering) to ensure authenticated users and transactions for your exchange.
- Ensuring boosted liquidity for the exchange
Liquidity is the most essential factor for any exchange as it decides the efficiency of an asset being transferred and to convert it into fiat money. Therefore you need to make sure your exchange offers enhanced liquidity to attract users. There are different ways to boost liquidity for your exchange such as,
- Create artificial accounts within your exchange, and initiate trading activities from the account which will fill up the order book, thereby increasing liquidity.
- You can connect your exchange API with an external exchange that has high volume liquidity to improve yours.
- You can join a network of exchanges where the liquidity of all the exchanges are tied together andwill automatically boost your exchange liquidity.
- Implementing the right features
You need to implement top quality technical and security features into your exchange to enable high performance, and capture investors’ eye to gain credibility over your competitors. Here is the list of mandatory, and the top trending features of 2020 for your exchange.
- Major crypto and fiat currencies support
- Multi-Lingual support
- Automated KYC/AML verification
- Powerful trade matching engine
- High TPS( Transactions Per Second)
- Multi-currency wallet with multi-signatures
- Liquidity API integration
- Advanced, Intuitive user interface
- Robust Admin and user dashboard
- Advanced Blockchain technology and smart contracts integration
- Payments gateways integration
- Trading BOTS
- Automic Swap option
- Integrated Referral program
- Mobile Application support
- HTTPS Authentication
- Jail Login
- Data Encryption
- Multi Factor Authentication
- DoS( Anti-Denial of Service) protection
- DDoS( Anti-Distributed Denial of Service) protection
- CSRF( Cross-Site Request Forgery) protection
- SSRF( Server-Side Request Forgery) protection
- HTTP parameter pollution protection
- Escrow System
These are all the mandatory steps to follow while creating a cryptocurrency exchange for your business, and there are many more to this. But, here is a last but not the least step, that will in fact, comprise all these above steps together which is,
Hiring a cryptocurrency exchange development company
If you are looking to skip the long and tedious development process and to launch your exchange within a short turnaround time to get ahead of your competitors, the best option is to hire a cryptocurrency exchange development company. By doing so, the entire cryptocurrency exchange platform development process will be taken care of by the company, allowing you to concentrate on strategies to further improve your business and customize it according to your personal preferences. Some companies cover every step for you from legalization, development, marketing, and deployment making it easier for you to get down to business.
Choosing the right company will save you ample amount of time, and money, and to get ahead of the existing competitors in the market. As we discussed earlier, cryptocurrency exchanges are rapidly growing in volume with each day, and experts predict a solid future ahead. So, carry out massive research, choose the best and the most experienced company, and earn million-dollar profits for your business.