Crypto exchanges have become the mainstream business medium for entrepreneurs around the crypto space. If you are an aspiring entrepreneur in the cryptosphere looking to launch your own cryptocurrency exchange software, you must definitely be overwhelmed by the intensely competitive crypto exchange market scenario. Cryptocurrency exchanges are the primary reason for the constantly increasing crypto market value. Today, there are more than 500 exchanges operating in the market and the number keeps multiplying with each passing day. Every newcomer in the realm wants to launch a crypto exchange software because of the credibility and profitability it brings into the business.
To help you sustain and stand out from the crowd, here in this blog, we are going to discuss the most essential aspects of building a solid cryptocurrency exchange software for your business. Let’s dive in and find out.
Key steps involved with crypto exchange software development
- Legal framework and licensing
The first and foremost step is to determine the operational location of your exchange, and complying with the legal frameworks based on your location. The regulatory norms differ from one country to another. Therefore, it is important that you thoroughly analyze, choose your location, and make sure your exchange is legally compliant. You need to obtain proper licensing under the authority of your location before commencing your exchange. Also, you should also comply with necessary, location-based KYC/AML norms for enabling authenticated users and transactions for your exchange. With the constantly changing legal framework, the best option would be to opt for expert advice/ guidance on legal terms for your exchange.
- Determining Budget
Before getting started with your cryptocurrency exchange software development, you must know the factors that influence the cost of development such as technology, legal procedures, and registration, hosting, exchange marketing, etc. After clearly figuring out a structure of what you need, you should determine the budget accordingly. But what’s important here is to keep the future of your exchange also in mind while deciding your budget, as in if there are any technical issues occurring in the future, you must have the fund to immediately get it rectified. It is important that you have a sufficient operational budget until your exchange makes a considerable return on investment.
- Inducing Liquidity for the exchange
Liquidity is the central component of any cryptocurrency exchange. Liquidity is the factor that determines how quickly an asset can be exchanged or converted into cash when the market conditions are favorable. And an exchange with an order book that is full, and generates numerous trading activities automatically means the exchange comprises deep liquidity. Therefore, it is important that you boost liquidity for your exchange to attract investors. There are different ways to generate liquidity for your exchange such as,
- You can create artificial accounts within your exchange and stimulate trade activities between them which will increase your liquidity.
- You can connect your exchange with an external exchange with high volume liquidity.
- You can join a network of exchanges. The liquidity of the exchanges are tied together, which will automatically increase your volume.
- Partnering with a bank/payment processor
You need to carefully analyze and choose the right bank/payment processor for your exchange to help your users facilitate fiat currency transactions in a safe and smooth manner. The banks or payment processors might differ in terms of setting fee structures. Therefore, it is essential to choose the one that offers the most minimal transaction fees to generate more trades in your platform.
- Implementing top-of-the-line security
Even though cryptocurrency exchanges are widely popular, they have been prone to hack threats and fraudulent activities in the past, which is why some investors are still uncertain about setting foot in the business. Therefore, the security of your exchange platform should be your utmost priority. You must make sure to implement top-grade, multi-layer security protocols for the exchange to protect the interests of your users and the integrity of the exchange.
- Testing
Once you are done with your cryptocurrency exchange software development, it is time to execute rigorous testing. You must ensure your exchange is fully-tested, and any bug issues are identified and rectified before making your exchange live.
- Maintenance and legal team
It is important that even after your launch, you employ a dedicated team for handling the maintenance and legal compliance of your exchange. As mentioned earlier, the legal frameworks keep changing every now and then. What was legal a few years back, might not be legal at present, and vice-versa. Therefore, you should have a team who will constantly look out for changing legal requirements and market trends, to keep your exchange up-to-date, and running smoothly.
The above mentioned are all the most crucial steps that should be looked into while creating your cryptocurrency exchange software. But the process is not as simple as it sounds. It involves a lot of intricate factors, takes months, or even years to complete, and requires quality technical assistance to sustain and manage earning potential over the wide-spread competition. Therefore, instead of developing your exchange all the way from the ground up, the better alternative choice would be to hire a cryptocurrency exchange software development company.
Such companies will comprise a team of market experts, blockchain experts, experienced developers, programmers, strategists, and analysts, who will offer tailor-made cryptocurrency exchange development solutions that fit your individual needs. They will take care of everything from the development, design, marketing, and launch of your exchange, allowing you to focus on the sales, and customization part of the exchange in aspects like name, brand, logo, UX/UI, color themes etc. , and further enhancements required for your exchange. These ready-made solutions will help you with a quicker launch at a cost-effective price.
Crypto exchanges are already ruling the market, and with the on-going COVID-19 crisis, investors are rushing towards cryptocurrency exchanges like never before, and the scope, demand and profit chances have wide-opened for exchange owners. Therefore, carry out in-depth research, figure out the right company to execute your crypto exchange software development, and augment benefits and profits for your business.
