Create own cryptocurrency exchange – considerations to keep in mind!
If you are reading this blog, then you might perhaps be interested in create own cryptocurrency exchange. If so, then here I am going to give you some tips and tricks on what are all the aspects that you need to know about building an effective crypto exchange of your choice.
Steps to be considered for cryptocurrency trading platform development:
create own cryptocurrency exchange involves the following steps to be taken care off:
- Compliance with the regulatory laws: Once you have come across a decision to start your own crypto exchange, the first thing you need to focus on is that whether your exchange is going to be in place with the necessary compliance standards. Because a highly compliant exchange only will hold the capacity to operate smoothly in the market and this is how the overall operational scope of your exchange can be defined.
It is no matter that whether you make your exchange operate to a confined location or globally, getting out the necessary approvals and licenses is somewhat vital to go with. The laws might be location specific and they vary with respect to the location that you choose for your exchange to operate. In order to be clear with the laws respective to your business location, you may need a legal regulatory consultant who can guide you on the same.
- Discover the ways to ensure the safety of your exchange: When it comes to any type of cryptocurrency exchange, security is of utmost importance and that is what this step is all about. Yes! Failing to adhere to the safety measures might take your exchange operations down with a lot of pitfalls and threats. So, it is always advisable to incorporate the governmental exchange security procedures like KYC (Know your customer) and AML (Anti-money laundering). KYC can help you verify your customer identities and AML allows you to avoid unethical money laundering activities that might probably happen in the system.
- Integrate payment processors to the exchange: Payments involve a vital part in the arena of trading and transaction processor. Particularly when it comes to a cryptocurrency exchange, there is no more except that we need a payment processor to get done with processing the payment transactions at the right time with no delays. We can either choose out a bank or some other payment processor as per your choice and convenience. In case, if you go out for the selection of a bank for your business transactions, then you need to make sure that the chosen bank is trustworthy and it has the option of hosting online facilities for the end-users. Because cryptocurrency exchange traders nowadays are very much interested in initiating instant banking transactions online to ensure comfort and to save their valuable time. In addition, while choosing a bank, you need to keep in mind that it has the fast clearance for the settlement of funds to be made in a faster manner.
- Liquidity boosting: Liquidity is one of the primary factors that decide the cash flow of any cryptocurrency exchange and here is where the overall efficiencies and profit rates lie in. Liquidity decides the successful operation of the exchange. In general, it is obvious that the newly launched exchanges will have some extent of liquidity issues and this could be sorted out in the following ways:
- Enhancement of trading activities done in the exchange between the buyers and the sellers.
- Integration of liquidity API to the exchange can help boost up the liquidity rates of the exchange much better than ever.
- Creation of a huge network via connecting the exchange to some other popular exchanges in the market thus coming out with a large network. The higher the network size, then the greater would be the liquidity.
- Security improvements: Boosting up the security levels of the exchange is one efficient way to make it move forward to the next level of advancement. Yes! The traders of the exchange will always feel good when they know that their funds are kept safe in the exchange and their overall trading processes remain secure. By the way, they can get rid of the potential security threats or unethical security hacks that are possible within the system. We might have noticed that some exchanges were prone to security breaches of various levels which incurred some losses. But maintaining high-end security can help overcome all those at an optimal level without fail. Do you have any idea on how to maintain such high-grade security for exchange trading transactions? If not, then consider KYC and AML. KYC (Know your customer) ensures security by verifying the customer identities and AML (Anti-money laundering) on the other side ensures security by addressing the challenges of anti-money launders by third parties. So on the whole, in order for you to make the exchange highly successful, security must be your top priority over any others.
- Customer support channels for operational compliance: Customer support is needed certainly for an exchange to get approvals right for KYC requests being raised from the customers’ side, Currency deposits and withdrawals, and solving out the customers’ queries and complaints, and so on. A swift response to the users in the form of customer support always mandates to go beyond the expectations of your customer community and to achieve customer satisfaction to the fullest.
Major components to create own cryptocurrency exchange:
The overall architecture of a cryptocurrency exchange software constitutes the following components operating together:
- Matching engine: It is the one that is responsible for trades to happen in any exchange platform and hence considered as the core of the exchange and its trading operations. It helps the users in making trade orders within the exchange by facilitating order book accesses, trade order matches for buy and sell orders, transaction processing, and balance calculations. There is no exchange possible without a trade matching engine. Hence it needs to be designed with utmost care to avoid any discrepancies in the system. Before going to set up the exchange, you have to make sure that you have a perfectly working trade matching engine to carry out all your exchange trading operations at ease.
- UI: The user interface is the entry gateway for the users to get initiated with the required trades in the platform. It forms the front-end of any exchange and it provides a clear view to the users on how the exchange will look like. Hence it needs to be very much appealing, intuitive, and user-friendly. The mobile-friendly compatibility of the user interface can help enlarge the user base of your exchange as there is an increased amount of smartphone usages found these days among the user community. A custom mobile app with a highly intuitive UI can pave way for better trading engagements within the exchange.
- Wallet: It is a storage medium with which the users can keep storing their cryptocurrency assets online in a safe way. As the wallets are highly connected to the asset funding part of any exchange, they need to be much more secure to avoid unnecessary hacks. Maximizing the wallet security can obviously help to diversify risk mitigation.
Basically, create own cryptocurrency exchange wallets are of two types listed as follows:
- Hot wallets
- Cold wallets
- Admin panel: It is the business management software wherein a lot of the exchange management activities are to be done. It gives us the operator control to help manage the business operations successfully with no hassles.
Shamla tech – the one-stop destination for your cryptocurrency trading software development:
There are two ways with which you can develop your own cryptocurrency exchange trading platform. Either you can make it by building the exchange software in-house or by going out for some free or open-source exchange scripts. Besides, we are here to support you with another potential option that can help you get into your exchange development instantly on the go with ease and which is none other than the white-label exchange software. Yes! Our white label exchange solutions are tested cum proven models with customization options to go forward with your exchange development needs perfectly beyond your expectations.