How to Build Your Own Cryptocurrency Exchange Platform in 6 Steps

The rise of cryptocurrency, which is more than just digital money, has meant big things for online entrepreneurs. Even while several laypeople think it’s a bubble, the experts in the field often disagree, based on evidence of its growth over the years. For instance, a 35-member group reported by Forbes expects bitcoin to start the new year 2023 at about $76,000.

How to set up a crypto exchange platform may seem like a far-fetched idea at first, but it’s actually very simple and achievable for anyone in the tech industry. It takes 6 simple steps to create your own crypto exchange that is checked and worked for our clients already and, surely you will add some of your magic ingredients to make your business idea an outstanding cryptocurrency exchange platform.

Crypto Exchange Market Overview

The global crypto exchange market has been growing rapidly over the past few years due to the increasing demand for cryptocurrency and blockchain technology. The market is expected to reach $4.94 billion by 2030, which makes it one of the fastest-growing industries worldwide. Presently, there are over 500 crypto exchanges globally, with a combined daily trading volume that exceeds $100 billion.

Due to the high volatility and risk associated with cryptocurrency trading, traders are often hesitant to invest in the space. However, this trend is changing as more investors have begun to take an interest in how to make a cryptocurrency exchange. This has led to an increase in the number of cryptocurrency exchanges being launched every year and also an increase in their user base.

Crucial Stages to Create Your Own Crypto Exchange

Cryptocurrency exchange creation process is not easy. To make own cryptocurrency exchange, there are many crucial stages, and each stage itself can take a lot of time and effort to complete.

Idea

The first step if you plan to make a crypto exchange is to come up with an idea that will solve a problem in the market or industry. You can also use an existing idea and tweak it to meet your needs.

Budget Calculation

You need to calculate how much money will be needed for this project so that you can set aside enough funds for development and marketing costs, including consideration for exchange rates, especially in offshore development.

Legalities Question

You might not know this, but there are certain legal compliance requirements that apply when starting a new business, especially when you want to build an exchange for cryptocurrency. You need to make sure that all necessary licenses are obtained from relevant authorities before proceeding with development.

Assembling a Team

To save costs and go forward fast, especially for MVP development, you can divide tasks between your in-house team and the oustaffing developers. This kind of hybrid development team can be very cost-effective and helpful for your project, as we’ve repeatedly seen on our practice.

Technical Launch

This is concerned with the architecture of the product, which is all about the speed of work and its scalability capacity. The right tech stack is also an investment, and we it Procoders we point a lot of attention and add our expertise to the balance of security and scalability is very important once the product is launched, and costs and speed of development are crucial on the MVP stage when you need to be faster than your competitors to catch the investments.

The Main Types of Crypto Exchange Platforms

There are numerous crypto exchange platforms and each has its own distinct characteristics, especially when talking about DeFi application development. If we break down the kinds of crypto exchange platforms, we will get a clearer picture of what each presents in development, and how they can be used when you build cryptocurrency exchange website for your business.

Centralized exchanges (CEX)

Centralized exchanges (CEX) are those that require users to deposit their digital assets in order to trade them on an electronic platform. The operator provides the platform where users can buy, sell and store cryptocurrencies and operator also earns commissions on transactions.

Decentralized exchanges (DEX)

Decentralized exchanges (DEX) are a relatively new type of exchange that uses blockchain technology to facilitate the trading of cryptocurrency. They are decentralized because they do not require any third party to hold the cryptocurrency, and no one can take control of your funds. However, they are not connected to a single server or company. This is useful if you’re trying to ​​create a bitcoin exchange or for other popular cryptocurrencies, and if you want to learn more about how to make a decentralized exchange – we have an article on that topic.

Peer-To-Peer Exchanges (P2P)

Peer-To-Peer Exchanges (P2P) allow buyers and sellers to connect directly with one another through an online platform. The sellers set their own prices for products or services, and buyers pay sellers directly using their preferred payment method.

Hybrid crypto exchanges

Hybrid crypto exchanges combine aspects of both centralized and decentralized exchanges. These platforms often have a central authority that controls certain aspects of the exchange (such as security), but also gives users some degree of control over their assets when using the platform service.

Examples of Leaders in the Niche

The cryptocurrency exchange niche is rapidly growing amidst the cryptocurrency fever. To giver you a better understanding of how to start a crypto exchange, below we’ll dig into the leading examples of cryptocurrency exchanges in the market, what they do well and how they dominate.

Binance

In terms of daily trading volume, Binance is the largest crypto exchange in the world. It was founded by Changpeng Zhao in 2017 and now operates in several countries around the world although it faces regulatory challenges in the United States.

Bybit

Already, Bybit has about 6 million registered users. That may not be as many as the market leaders Binance and Coinbase. However, the company was only established in 2018, and by amassing such a number of users in only four years, it has had a solid statement that it is here to stay.

Coinbase

Coinbase is another American crypto exchange platform with about 100 million users, making it the largest crypto platform by the user base. The company was founded in 2012 and now records over $300 billion in trading volume every quarter.

FTX

FTX is the second largest crypto company by trading volume, recording up to $10 billion in trades daily. The Caribbean company has over a million active users and also operates FTX.US, a separate exchange for its users in the United States.

Kraken

Kraken is another popular crypto exchange with one of the largest trading volumes. It was valued at $10 billion this year. Its mobile app for international users was released in January 2021 and it has now been downloaded millions of times.

5 Benefits of Building a Cryptocurrency Exchange

Building a crypto exchange business is a great way to ensure you take full advantage of what the digital currency boom has to offer. By starting your own cryptocurrency trading platform, you’ll be able to influence the success that awaits your business for years.

High Demand

The demand for cryptocurrencies is increasing rapidly every day, and it shows no signs of slowing down anytime soon! People all over the world are investing their money into these digital assets because they believe that they have the potential to grow even further over time, which means that there will always be a lot of demand for cryptocurrencies as long as this trend continues.

Potential for High Profitability

Cryptocurrencies are traded 24 hours a day, 7 days a week, 365 days per year. With such high-volume trading activity, there’s plenty of opportunity for profits. As a result, these exchanges have been able to make huge profits from trading fees charged on every transaction performed by their users. The reason why they’re so profitable is that they act as intermediaries between buyers and sellers, charging fees on transactions that take place on their platform

Easy To Scale

If you’re looking for a cryptocurrency developer, the best thing about how to build a crypto exchange platform is that it is easy to scale it up as you go along. You can start small with just a few users and grow it into a large-scale business offering thousands of features and services to your customers. You can also add new features to your platform as your business scales up and expands into different niches like mining, ICOs, etc.

More Business Opportunities

As cryptocurrencies continue to gain popularity among investors, businesses will want to offer them as payment options for goods and services offered on their websites. Since most merchants do not accept payments in crypto assets directly, they must rely on third parties like exchanges to process these transactions on their behalf. This means that as more users begin using cryptocurrencies to purchase goods and services online, demand for your exchange platform will increase as well.

Higher Return on Investment

Cryptocurrency exchanges are in high demand, so there’s no shortage of customers for your business. This means that you can expect a higher return on investment and liquidity than with other types of businesses. There’s no doubt that this industry is growing exponentially and there will be plenty of room for growth in the future as well. If your platform becomes popular among users, then it will have high volume and demand which means more opportunities for profit-making.

Crypto Exchange Websites Features

When creating a cryptocurrency exchange, there are so many different features that need to be considered. And since this platform is going to be used on a daily basis by hundreds of thousands of users, it has to be as intuitive as possible and extremely easy to use.

10 Must-have Features

Authorization and Verification

To successfully develop a crypto exchange, this verification is required for the safety of users’ funds and information. One can easily verify their account using a phone number or email address.

Trading Engine system

Trading engine systems are used to manage orders on a website automatically. They help in tracking the prices of cryptocurrencies in real-time and process transactions accordingly by filling buy and sell orders according to market conditions

Crypto wallet for Deposit/Withdrawal

A crypto wallet allows users to send and receive cryptocurrencies from other wallets. The exchange should have its own wallet system so that users can access their funds from anywhere at any time.

Internal API

An internal API can be used to integrate with your database or other systems in order to automate processes or allow users to access information directly from a third-party platform.

Admin Panel

The admin panel allows employees to manage all aspects of your website’s content and functionality. They can set up new pages, change existing ones, add products, manage users, and so on. They can also use this panel to perform updates on the entire website.

Analytics dashboard

The analytics dashboard will help you monitor how well your website is doing. You can get statistics about the number of visitors that come to your site per day or week, as well as other information related to their behavior while they are on your site.

Notifications and Alerts

In the world of cryptocurrencies, it is essential to be updated on price movements and market trends. Every trader wants to be notified about the changes in price for each coin, so they can take advantage of the situation before others do.

Help and Support System

A good crypto exchange website will offer a wide range of support services including FAQs sections, video tutorials, live chat rooms, and other ways to contact customer service representatives if users have any questions or concerns about their account or orders placed on the platform.

Integration with bank cards

To start a bitcoin exchange site from scratch, some cryptocurrency exchanges allow users to deposit funds using bank cards, which makes it possible to buy coins instantly without waiting for confirmation from an external wallet provider like Coinbase or Bitstamp (which sometimes takes up to several days)

Transaction History

One of the most important things about a cryptocurrency trading website is its transaction history feature. This allows traders to see their past trades, as well as how much money they made or lost from them.

8 Advanced Features

NFT Integration

Non-fungible tokens (NFTs) are unique digital assets that cannot be duplicated or copied. By integrating NFTs into your website, you can provide users with a variety of options for interacting with their favorite blockchain games and projects without having to leave your platform!

Biometric data

Biometric data is unique to every person and can be compared with existing records. It allows you to verify whether the person who wants to log into your account actually owns it. Biometrics can be used for login verification, transaction authorization, and more.

Your own tradable token

Another advanced feature for crypto websites is the ability to create your own token with a unique name and description. You can also choose its type (ERC-20, ERC-721, or NFT) and set up its parameters such as maximum supply and price per unit.

AI system recommendations

An artificial intelligence system is able to analyze all data about cryptocurrencies, trades, prices, volumes, etc., which makes it possible to generate recommendations for investors based on their portfolio composition and risk profile (i.e., investment horizon).

Cold crypto-wallet integration

When you make your own cryptocurrency exchange fintech app, the integration of cold crypto wallets provides an extra layer of security for your users. This can be done by integrating the wallet with your website, or by allowing your users to import their private keys into their accounts directly.

Crypto staking functionality

This feature allows users who hold tokens on certain wallets or exchanges (such as Binance Wallet) to earn interest on their assets by participating in PoS mining pools or staking pools of various cryptocurrencies such as DASH, Ethereum Classic (ETC), NEO NEP5 (NEO), Tron TRX.

P2P Crypto trading

This is one of the most demanded features in the crypto sphere. It allows users to trade with other users directly without going through an intermediary, which means lower transaction costs and faster execution times.

Know Your Transaction (KYT)

KYT is an anti-money laundering framework that allows you to monitor suspicious transactions on your platform and prevent illegal activity from happening. This feature is very important for all financial platforms since it prevents scams, fraud, and other illegal activities from taking place on your website or app.

Tech Stack Needed for Crypto Exchange Development

Crypto exchanges are starting to pop up left and right, but not all of them are as secure as they should be. This is why it’s important to understand the tech stack needed in how to create a cryptocurrency exchange, even if you’re going for open-source development.

Frontend: jQuery, AngularJS, React, Bootstrap,

Backend: Python, Django, PHP, NodeJS,

Data Management: MongoDB, Redis, PostgreSQL,

Android mobile: Android SDK, Kotlin, RxJava, Android Studio, Ionic, Xamarin, Flutter
iOS mobile: Swift, XCode, iOS SDK, Core Data, Ionic, Xamarin, Flutter

Crypto Exchange Architecture

In how to create a crypto exchange platform, the layout of the architecture is not rocket science. Moving the bulk of the trading activity on behalf of the clients to exchanges is not a complicated task, it only requires a good team of engineers, which ProCoders can provide.

Trading Engine

The trading engine is one of the most important parts of any crypto exchange. It handles all operations related to matching buyers and sellers, managing orders, calculating prices and delivering results back to clients via API calls.

Frontend UI

This is the front-end part of the trading engine; it provides traders with a user interface that allows them to interact with the exchange. The UI should be easy to use, secure and fast enough to keep up with high volumes of trades without affecting performance.

Wallet

This is where all a user’s funds are stored securely so that they don’t get stolen or hacked by hackers or other malicious third parties trying to steal their money from them!

Authentication server

Authentication servers are used to verify user credentials and authorize users to access web applications. For example, an authentication server might verify if a user has a valid email address and password before letting them log into their account on the exchange.

APIs

APIs are typically used for communicating with other systems (e.g., wallets). They can also be used for integration with other systems such as KYC providers or other third-party services like news feeds or social networks

Admin Panel

The admin panel is used by administrators or developers to manage users, assets, and trading data. The admin panel is normally not accessible to end-users.

Challenges in Developing a Crypto Exchange (Based on Our Experience)

Today there is a great number of different crypto exchanges in the market. But the working path when you start an exchange for cryptocurrency is not easy, it’s a jungle with lots of risks and money-losing opportunities. Let’s talk about the particular problems that may be faced by the ventures which are willing to develop their crypto exchange at the moment.

Regulatory Compliance

The first challenge is regulatory compliance. There are many countries that have their own unique regulations on cryptocurrencies and ICOs. To be able to operate in these countries, you need to follow all of these rules and regulations as well as obtain licenses from them if necessary.

Security

Another challenge is security which is always an important aspect when dealing with financial transactions online or offline no matter how big or small the amount may be since you never know what could happen if you’re not careful enough about it. You must ensure that your exchange has strong security measures such as 2-factor authentication (2FA), encryption, cold storage, etc.

Technical challenges

A cryptocurrency exchange is a complex system that needs to support high-volume trading and provide a smooth user experience. This can be achieved by leveraging cloud technologies and modern software development practices such as microservices, containers, DevOps, and CI/CD. Ultimately, implementation requires a solid team of developers and engineers, which ProCoders can provide you.

How to Make a Crypto Exchange in 6 Steps

In this section, we will present the steps that would be taken in order to build a cryptocurrency exchange. We will not focus on the economic aspect of exchanges and rather address the technical details as well as application areas.

Discovery Phase and Market Research

The first step in the process is to conduct research on the market, competitors, and customer needs. This will help you understand your target audience and what they want from the crypto exchange. The best way to go about this is to partner with an outstaffing company such as ProCoders from scratch. ProCoders can help you begin market research for your product from the very beginning, before commencing execution. Having the same team for the discovery phase and the actual development ensures a more streamlined development process.

Budget Calculation

You need to calculate your budget for development. This includes costs to hire UX/UI developers, web developers, contractors, etc. It also includes the cost of buying web hosting space, setting up security software, and other resources needed to launch the exchange. You don’t want your project to run out of funds before it even starts! You should also explore budget-saving methods such as dividing the development stage for MVP and then add more features while increasing the market performance or using oustaffing as a cost effective method to organize development. More so, outstaffing companies are more reliable than hiring freelancers. This is where ProCoders comes in.

Designing Wireframes, Prototype, and MVP

The next step is to design wireframes, prototypes, and MVP (minimum viable product). This will help you understand what people want from your exchange and how they use it. Once you have the right design and functionality for your exchange, you can start working on the product.

Usability Testing

Usability testing is an important part of making an exchange because it allows you to see if your exchange is being used by customers in the way that you want it to be used. It also shows whether there are any issues with your exchange or not. This testing should be done as early as possible so that any design changes can be made before launching the final version of your product.

Product Development and Launch

Once all bugs have been fixed, it’s time to start developing your product! In most cases, this involves coding up your backend so that it’s ready when it comes time for launch. During this phase of development work, make sure that all features are tested thoroughly before going live with your exchange platform. You’ll need to build out all of the features required for exchange while also making sure they work well together and don’t cause any problems with each other or with other elements on the site such as security features or payment options.

Maintenance

Once the project has been launched, the product needs to be updated with upgrades and bug fixes from time to time, an important aspect of customer support. This is an area where freelancers might fail you, since they work according to contracts, which may have expired once the product is launched. However, with an outstaffing team from ProCoders, for example, you can have a dedicated team of engineers and developers maintaining your product for several months after launch.

Cost & Timeline

Many businesses are rushing to develop a cryptocurrency exchange when they see the opportunity open to them. However, few realize the magnitude and the cost of this undertaking.

How much does it cost to build a crypto exchange?

The cost to start a cryptocurrency exchange like Binance varies depending on the features of the platform, its size, and the type of business model that it follows. For example, if you are planning to build a centralized exchange with all the advanced features, it may cost you around $300,000-350,000. However, if you are looking for a low-cost solution then you can give preference to a decentralized exchange which will cost about $50,000 for development only.

How long does it take to build a crypto exchange platform?

It depends on the complexity of your project and what kind of features you want to implement in your exchange. If you want to create something like Binance or Bittrex, it will take at least 6 months (or even longer). For example, if you want to create an advanced platform with all the necessary tools for professional traders and investors, then it will take much more time than just creating an average cryptocurrency exchange website.

How to Start a Cryptocurrency Exchange With ProCoders

ProCoders specializes in outstaffing and delivering the best development talents for product owners, especially if you are looking for a cryptocurrency developer. By outsourcing the development, you can gain technical expertise from ProCoders. ProCoders does not only offer developers. Instead, we possess a pure solution for your business idea by providing you with exceptional talent from our wide talent pool.

Every developer in our talent pool is hand-picked and hand-matched to projects that fit their skills and experience. Our specialty is full life cycle outsourcing of custom software, so even if you are wondering how to build your own crypto trading bot – we know the answer. We are known for the rapid prototyping of MVPs (Minimum Viable Products), thanks to our high-quality pool of seasoned software engineers and designers. At ProCoders, we use offshore developers who meet the highest technical standards. Let us help you deliver quality software with an exceptionally short delivery time.

Conclusion

• The global crypto exchange market has been growing rapidly over the past few years due to the increasing demand for cryptocurrency and blockchain technology.
• Building a crypto exchange is a great way to ensure you take full advantage of what the digital currency boom has to offer.
• A cryptocurrency exchange is a complex system that needs to support high-volume trading and provide a smooth user experience. This can be achieved by leveraging cloud technologies and modern software development practices such as microservices, containers, DevOps, and CI/CD.
• Whether you believe in crypto or not enough, it’s really worth trying it. To make this attempt less cost, our clients choose the outstaffing development model or a hybrid one (in-house and outstaffing at the same time).
• At ProCoders, we use offshore developers who meet the highest technical standards. Let us help you deliver quality software with an exceptionally short delivery time.