5 Core Modules You Need For Launching A Cryptocurrency Exchange Platform
By X-Byte Enterprise Solutions on Altcoin Academy
Cryptocurrencies have become immensely popular among investors, technology enthusiasts and the general public in recent years. With the quick ascend and descend of cryptocurrency prices within a short while, people are increasingly becoming interested in leveraging trade opportunities in the crypto domain. Keeping in mind the current scenario, the time is ripe for launching a cryptocurrency exchange platform.
The trading business is at an all-time high and what’s better than launching your own cryptocurrency platform for investors? Earlier individuals used to focus on cryptocurrency mining but now as it has become more energy consuming and less profitable, more enthusiasts are exploring the trading route.
Why Start A Cryptocurrency Exchange?
Launching your own cryptocurrency exchange platform is not an easy task. Even when the world is mad about cryptocurrency, you should carefully evaluate the scope and future growth potential of launching a project like this.
For a project like this, you need to have deep knowledge of cryptocurrency development, custom blockchain development and a lot of other specialized domains. Moreover, you need to have a team who can relate to your vision. If you manage to have all these, here are a few benefits of launching your own platform:
- Consistent and long-term income stream: Once you manage to launch and promote your crypto exchange platform, you can enjoy a consistent stream of passive income, without much effort.
- Growing market: Cryptocurrency market is growing at a fast rate, irrespective of the dips. Each day, more and more want to trade in cryptocurrencies, making the proposition even more lucrative.
Types of Crypto Exchange
Before you dig deeper into the process of creating a cryptocurrency exchange platform, you need to plan out for the type of platform you will build. Choosing an appropriate type will affect the popularity and profitability in the long run.
Also, the development efforts would vary according to the type of exchange you’ll build. Here are some of the most common types of cryptocurrency exchange platforms:
- Admin Exchange: Such types of exchange are simple to operate making them suitable for developers who are planning to the domain for the first time. An admin exchange facilitates trading between a platform user and the platform itself i.e. the owners of the platform. Being the most common type of exchange, the operations are simple, but it is not quite a popular type owing to limited growth potential.
- Peer2Peer: P2P platforms are quite popular as they serve as a link between two parties looking for exchange transactions. Common users of the platform participate in buy/sell activity via a bid system and the platform owners earn a commission for each transaction.
- Decentralized Exchange: Decentralized exchanges work on the same principle like P2P exchange but provide high levels of anonymity and privacy for all its users.
- Margin Trading Exchange: In such an exchange, users don’t trade in cryptocurrencies but cryptocurrency contracts and futures, just like a forex broker.
Essential Components of a Cryptocurrency Exchange Platform
While deciding about your development efforts, you also need to outline the structure of your project.
Whether you will roll out your platform on a monolithic structure where you will place all modules/components on a single server or a modular structure with a separate server for each module. You can also go with a distributed system where each module will be present on multiple servers.
Once you finalize on the structure part, you need to take care of the following components or modules during cryptocurrency exchange development.
1. Trading Engine
Trading Engine is the most vital component of your crypto exchange platform. A robust trading platform is essential for managing several functions like:
- Cryptocurrency Transactions
- Wallet Balance Calculation
- Book of Orders Access Request Processing
- Sale/Purchase Transaction Management
Focusing on the trading engine during cryptocurrency exchange development is essential. The better your trading engine, the faster your platform will be, which will make it more attractive for users. Compromising on the trading engine will lead your platform on a path to failure.
2. User Interface
The user interface is really crucial for attracting new users and engaging them to use the platform. Having a simple and intuitive interface is the first step towards hooking your users to the platform. Every feature should be easy to use- from placing the order to accessing the technical charts.
You can check out some of the existing exchanges to understand what works best for the end-user. Your core focus should be on enhancing the appeal of the interface while promoting simplicity in placing orders.
While you are working on a cryptocurrency exchange platform, you need to also focus on blockchain wallet development, too. Without a wallet, your users will not be able to store cryptocurrency balances.
You would need to get in touch with a bank to create a system that converts fiat currencies into cryptocurrencies. Users will pay via fiat currencies and in return, their wallet will be credited with their desired cryptocurrency. Here are a few tips to create a great wallet system for your platform:
- Provide maximum deposit/withdrawal options
- Focus on enhancing the transaction speeds
- Create a system for account verification during withdrawal to avoid chances of money laundering
If you are planning for the long-term, you need to be diligent towards wallet development on your platform.
For running a successful exchange, you need to find a reliable partner within the money markets to provide liquidity for cryptocurrencies. You need to create a liquidity system that can execute trades at high speeds, else your users will stop using your platform.
Traders want fast execution speeds that can help them benefit from moving market prices. You need to look out for liquidity providers for different cryptocurrencies who can facilitate quick trading on your platform.
5. Admin Module
Admin module will help you manage various operational aspects of your platform. You need to create a resilient admin module that can help you manage:
- User account and activity database
- Transaction management
- Withdrawal request processing
- Wallet set up
- Team management
- Accounting and finance
Admin module will help you automate various aspects which can take a lot of time if you plan on doing everything manually. With a powerful admin platform, you can keep everything under your control.
Other Things to Keep in Mind
You need to create a safe and secure framework for your cryptocurrency exchange platform. Hackers consider such platforms a hot target, trying to attack them continuously in a bid to extract easy money. You need to embed high-end security measures to keep hackers out of the system.
You also need to have some sort of tech support for users who can connect with your team. As there would be a high number of user queries on an everyday basis, you need to keep these operations on a separate server, right from the beginning. This will ensure that at least your support operations can guide users, 24x7, in case of a server failure or issue.
Cryptocurrency exchange development can be a really great way to get started with your entrepreneurial journey. With an experienced custom blockchain development team, you can also build and launch your own cryptocurrency platform without any trouble. So, let’s begin by getting in touch with experienced consultants and professional crypto developers now.