How to start an order book based spot trading crypto exchange business?
The term ‘spot trading’ is quite common to Binance users. When you enter the Binance exchange to trade, the first option on the drop-down is Spot. Most traders prefer this feature on a daily basis due to the ease at which transactions can be performed. Just like the name, Spot trading enhances users to buy or sell Bitcoin at the “spot” without much difficulty or delay. As a Crypto enthusiast, you would have already known that the backbone of the tremendous trading volume in Binance lies in the spot trading feature.
However, not many are aware that a Crypto exchange that completely focuses on spot trading can be developed with less investment. Imagine the trading volume you can end up with by creating a Crypto exchange solely for spot trading. By opting to build one A) you do not have to spend for other features like in Binance B) you have more or less similar revenue streams to the Binance platform despite investing less.
Despite all these, no startup would want to start a business without knowing how the entire development process gets carried out. It acts like a checklist and you can make a rough estimation of your end result before beginning your Crypto journey. It’s like how you approach an architect for designing your building elevation to get an idea or a picture. In this blog, I am here to demonstrate how to start a spot trading-based Crypto exchange business in the best possible way. Before that, you have to know what’s a spot trading exchange.
What exactly is Spot Trading Crypto Exchange?
Spot trading is the process by which users buy or sell Cryptocurrencies to make profits in a short period. Traders buy Bitcoin and hold until the asset price goes up to make profits. It can also be done reversely when traders sell Bitcoin once the price goes up and buy it back when the price comes down considerably. The trading process can’t get any easier for the users.
Coming to functionality, the spot trading-based Crypto Exchange runs on an Order-book-based system. You would have seen three options in the Spot trading feature namely, limit, market, and stop limit which are three essential components of the order book. In general, the order book contains transaction history details, a chart to check how prices vary and live Bitcoin price information. This functionality has proved to be an appealing factor for many users.
The spot exchange also comes with a custodial wallet option that helps store and transfer digital assets. Additionally, your users do not have to switch to other websites to connect to an external wallet. Apart from these, you have plenty of benefits from starting a spot trading exchange which we will explain later. Let’s directly move on to the question — How to start an order book-based spot trading crypto exchange business?
How to start an order book-based spot trading crypto exchange business
Starting a spot exchange is not a tough job as most people think. When the right strategy meets the ideal set of developers, your project is in safe hands without a doubt. You need to have more options before picking the best way to start your business. Thinking about options, many entrepreneurs would be tempted to approach outsourcers. If you are among those, I would suggest you change your mind. Those outsourcers may sound less expensive, but you could be at slight risk and may not be able to produce a quality outcome.
The best option you have is to approach a reputable Crypto exchange development company. They usually have updated solutions for your query and you can start an order book-based spot trading in a relaxed mode. The two popular methods that most Crypto exchange development companies provide are,
➡️Development from scratch
➡️Purchasing white-label software
Development from scratch is nothing but constructing your spot trading exchange step-by-step. The company usually gathers all your requirements, prepares the outline for your exchange, and completes the project in a systematic flow with the developers. This takes around a year time as each part of the exchange needs focused attention. As a result, the cost goes on until $1,00,000. Besides, you need to track and follow up with the company constantly.
To eliminate the time and cost factors, superior development companies also provide white-label Crypto exchange software. By purchasing the software, you can build a spot trading exchange like popular platforms in just a week or two. The software is like a ready-made dress in a shopping mall and is ready to be worn straight away. You can be assured of success anytime soon without any hesitation. I would suggest you pick this option any day and I have solid reasons for that.
Cost breakdown for Spot trading Crypto exchange development
White-label Crypto exchange software to build your spot exchange is deemed the best in business as the cost is quite budget-friendly. If you compare it with development from scratch, you will understand that starting a spot trading exchange doesn’t require you to be rich. The software is exclusively prepared by developers for new business heads that are looking to make a mark in the Crypto industry with low investment.
Development from scratch is expensive because of factors like backend work, operating software, website/desktop, design, and testing. For each of these factors, the cost varies and adds to the overall development cost.
By purchasing a white-label software, you do not have to spend on all these factors and instead, you can get a combined one for a much affordable price.
Well, the cost isn’t the only reason I suggest white-label software to develop spot exchange.
Why should you purchase white-label software to develop spot exchange?
White-label Crypto exchange software is a readily-available, customizable solution for startups or entrepreneurs to start their exchange business effectively. The solution is multi-tested, bug-free, and ready to be launched straight away. All you need to do is just make slight alterations according to your preference. The entire spot trading facilities available in Binance have been replicated in your spot trading exchange as well. In a way, this acts as a shortcut for you to build your brand and reputation quickly.
Most startups after getting to know the affordable cost have wondered if the quality might be reduced. The answer is a big no. White-label Crypto exchange software for spot trading comes with the latest security features, benefits, and revenue streams and you do not have to worry about the quality.
Valuable Features Available in Spot Exchange Development
The spot exchange you develop with the help of white-label software comes with a variety of core and security features. You can additionally add a few if you want with your strategies and make your exchange pleasing to the user’s eye. Here are the features that come with spot exchange development.
🔐Security features
✅ Verify Communication Through Email
✅ Jail Login
✅ Two-Factor Authentication
✅ Cloudflare Integration
✅ SQL Injection Prevention
✅ SSL Based End-To-End Encryption
✅ Anti (Dos) Denial Of Service
✅ Forgery Protection
✅ Server-Side Request Forgery Protection
✅ Anti Distributed
📋 Core features
✅ User Dashboard
✅ Admin Dashboard
✅ Order Book
✅ Order Types
✅ Extended Trade View
✅ Live Price Ticker
✅ KYC/AML
✅ Support System
✅ Multi-lingual
✅ API Documentation
✅ Referral program
✅ Payment Gateway integration for Crypto/Fiat
As I said, the development company along with the features also provides an array of benefits which we will see next.
Benefits of purchasing white-label software for building your spot trading exchange
From a business point of view, it is common to look for the benefits offered by the company before purchasing their product. One impressive fact about white-label software is the number of benefits it has. Hence, as an entrepreneur, you can concentrate on making different strategies to increase your user base.
✅ Highly scalable
✅ Low in cost
✅ No need for technical knowledge
✅ Faster deployment
✅ High Customization Scope
✅ Huge ROI
✅ Live Order Book System
✅ Trustworthy
Apart from all these, the root reason behind developing a spot exchange is the number of revenue streams that are available.
Revenue modules available in an order book-based spot exchange
Since Binance is the business model to start your spot trading exchange here, the revenue modules of the spot exchange are quite similar to the popular Binance platform. Once the number of users entering your spot exchange increases, you can easily generate high revenue and make profits consistently. Here are the revenue modules available,
➡️ Trading fees 💵
➡️ Crypto withdrawal fees 💵
➡️ Fiat deposit fees 💵
➡️ Crypto Listing fees 💵
➡️ Conduct token sales via IEO 💵
➡️ Advertisements 💵
I am sure that all these revenue modules could easily take your business to the next level. The popular exchanges now that have been generating lucrative revenue were all once startups like you. However, they had to invest hugely to let their business speak. Luckily, you have the white-label software now that requires much lesser investment and still be as effective as popular exchanges. Remember! The priority is always about which Cryptocurrency exchange development company you choose to start your spot trading exchange and half the job is already done.
Final thoughts
Now, for the final part, I have discussed entirely how to start an order book-based spot trading exchange most efficiently. Undoubtedly, purchasing white-label software should be a great boon for startups as it has a hefty number of advantages for you. However, the choice of a development company plays a big part and needs extra attention.
Several companies in the market offer white-label services. Not all can satisfy you completely as each company has its own goal and focus. Therefore, you should pick a company that can ideally adapt to your requirements and has excellent client reviews. Do deep research and find out the ideal company to purchase your white-label software.
