How To Create a Crypto Exchange to Launch Your ​​Startup

Did you know a 35-member group reported by Forbes expects Bitcoin to start 2023 at about $76,000?

It’s not a bubble. We clearly see that cryptocurrency is here to stay.

How to create a crypto exchange platform may seem like a far-fetched idea at first. But in our experience, it’s actually simple and achievable.

It takes 6 simple steps to create your own crypto exchange.

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.

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) require users to deposit their assets to trade on their platform. There’s an operator that provides the space for trading, allowing to:

• buy

• sell

• store crypto

The operator’s goal? They earn commissions on these transactions.

Decentralized exchanges (DEX)

Decentralized exchanges (DEX) are a newer type of exchange. They use blockchain for trading.

Unlike centralized exchanges, DEXs don’t rely on a third party to hold users’ funds. This provides full control over your assets.

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.

Buyers find different sellers and choose the most appealing prices and payment methods.

Hybrid crypto exchanges

Hybrid exchanges are combinations of centralized and decentralized platforms.

How? There is a central authority, but it only controls certain aspects of the exchange (such as security). Users have control over their assets.

Examples of Leaders in the Niche

5 Benefits of Building a Cryptocurrency Exchange

High Demand

The demand for cryptocurrencies is increasing.

People all over the world are investing into the industry, believing in growth in the future. This means that there will always be demand for this market.

It’s volatile but also potentially profitable. And here’s why.

Potential for High Profitability

Cryptocurrencies are traded 24 hours a day, 7 days a week, 365 days per year. With such trading activity, there’s plenty of opportunity for profits.

Imagine there are hundreds of thousands of transactions every day. And you get a commission from each one. You profit from the actions of your users!

Being the middleman can be the most successful practice here. Whether your users win or lose money, you’ll always get something out of it.

Easy To Scale

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. And your platform can grow with you (if you hire professional developers to help, of course).

You can also add new features to your platform as your business scales into different niches like mining, ICOs, etc.

More Business Opportunities

Soon enough, businesses may offer crypto as payment options for goods and services. However, most merchants won’t accept payments in crypto assets directly. So, they will have to rely on third parties like exchanges to process these transactions. That’s where your solution should enter the stage.

Higher Return on Investment

Based on all the previous benefits, you can expect a higher return on investment and liquidity than with other types of businesses. There’s no doubt there will be plenty of room for growth in the future. Your job is to make your platform high-quality and popular. The users will do the rest.

How to Create Crypto Exchange Website: Features to Include

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 per day or week. You can also analyze their behavior on your platform, understanding what works and what doesn’t.

Notifications and Alerts

If you work with crypto, you have to be updated on market changes immediately. Give that information to users to help them make decisions, and they will love you.

Help and Support System

A good crypto exchange will offer a wide range of support services:

• FAQs sections

• video tutorials

• live chat rooms

• other ways to contact customer service representatives

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

Make sure to have transaction history on the platform. It allows users to see their past trades and analyze their strategy performance.

Advanced Features

Biometric data

Biometric data is unique to every person and can be compared with existing records. It’s a guarantee of the safety of the users’ accounts. They can use these feature 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. Users can choose its type (ERC-20, ERC-721, or NFT) and set up parameters such as:

• maximum supply

• price per unit

AI system recommendations

An artificial intelligence system can analyze all data about:

• cryptocurrencies

• trades

• prices

• volumes, etc.

By using AI, you can generate recommendations for investors based on their portfolio composition and risk profile (i.e., investment horizon).

Cold crypto-wallet integration

The integration of cold crypto wallets provides an extra layer of security for your users. You can do it by:

• integrating the wallet with your website

• 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.

Know Your Transaction (KYT)

KYT is an anti-money laundering framework that allows you to monitor suspicious transactions and prevent illegal activity.

Tech Stack Needed for Crypto Exchange Development

You have 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

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

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

Many countries have their own unique regulations on cryptocurrencies and ICOs. To represent your platform in these countries, you need to comply with them.

Security

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 decent user experience. To achieve that, you can use cloud technologies and modern software development practices such as:

• microservices

• containers

• DevOps

• CI/CD

Ultimately, implementation requires a solid team of developers and engineers, which ProCoders can provide you. Consider us your crypto exchange builder.

How to Make 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.

Recommended: How to Hire Cryptocurrency Developers

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

This type of testing allows you to see if your exchange is being used by customers the way they’re supposed to use it.

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.

Maintenance

Once the project has been launched, the product needs to be updated and bugs need to be fixed.

This is an where freelancers might fail you, since they work according to contracts that often expire upon launch

However, with an outstaffing team from ProCoders, for example, you can have your platform maintained regularly!

Cost & Timeline to Start Your Own Crypto Exchange

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 that come along.

How much does it cost to create crypto exchange platform?

The cost to start a cryptocurrency exchange like Binance varies depending on:

• features

• size

• type of business model that it follows

For example, if you are planning to build a centralized exchange with advanced features, it may cost you around $300,000-350,000.

However, if you are looking for a low-cost decentralized solution, prepare for 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.

If you want to create something like Binance or Bittrex, it will take at least 6 months (or even longer). Contact us at ProCoders and we’ll provide you with estimated for your project!

How to Build a Crypto Exchange Platform 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.