Development of a turnkey crypto exchange for trading

A cryptocurrency exchange is a platform that enables users to buy, sell and exchange digital assets. Similar to the traditional foreign exchange market, the crypto exchange helps sellers and buyers of coins quickly find each other, and ensures the safety of transactions.

According to CoinMarketCap, the daily trading volume on popular cryptocurrency exchanges reaches $ 38.8 billion.

At the same time, such platforms take a commission from each transaction from 1 to 4%, which, given the scale, sounds quite good.

If you want to make money in the crypto industry, then a cryptocurrency exchange is one of the fastest and most reliable ways to do it. The fact is that the demand for exchanging digital currencies continues to grow, and having your own crypto-exchange, you cease to be dependent on rate fluctuations, but simply take a fixed percentage of each transaction. And no risks.

Cryptocurrency exchanges can be roughly divided into several types:

• Centralized crypto exchanges. They belong to specific companies that unilaterally set the “rules of the game”. Most often, such platforms are licensed to trade and subject to traditional financial regulators.
• Decentralized exchanges. These are unregulated sites that simply form P2P markets. Valued by the cryptocurrency community for the ability to conduct anonymous transactions.

• Hybrid exchanges. They have high functionality and liquidity as centralized sites, but at the same time provide anonymity and security as decentralized ones. That is, it is a cross between the first two options.
• Altcoin exchanges. Only cryptocurrency pairs are traded here, without fiat.
• Crypto exchanges with fiat. On such platforms, you can trade pairs of cryptocurrencies, or exchange digital assets for the dollar, euro, or even the national currency.

There are two popular types of services for exchanging digital currencies on the market: crypto exchanges and crypto exchangers.

The crypto exchange plays the role of a regulator during trading. She is an intermediary between the buyer and seller of cryptocurrencies.

At the same time, the crypto-exchanger is a third party, and takes a full part in the transaction: it sells or buys assets.

In simple terms, a crypto exchanger works on the principle of a regular currency exchanger that can be found in any country in the world.

Developing your own cryptocurrency exchange is a difficult task that requires a professional development team and serious financial investments. But, with a good business plan and high quality technical implementation, the investment will pay off quickly enough.

The creation of such a project from scratch can be conditionally divided into several component parts. Let’s consider each of them in more detail.

Development of a trading engine

The trading engine is the brain of the future cryptocurrency exchange. It is an electronic system that collects and compares all open orders in the system. When the algorithms find two suitable offers, they automatically execute the deal.

Various algorithms can be used for matching. Most often, this is the FIFO system, which works according to the principle: “Who came first – he was served earlier.” That is, if there are two similar proposals, the system will choose the one that was announced earlier.

The correctness and efficiency of the entire exchange depends on the performance of the engine.

Trading platform development

It is software that traders can use to manage their own accounts and open orders.

Such a platform consists of several, mandatory parts, interconnected:

• server part with a trading engine;
• trading terminals;
• various services, APIs and integrations that provide convenience for users and open up new possibilities for using the exchange.

The more convenient and functional the trading platform is, the greater the chances of successful promotion of the crypto exchange.

Liquidity aggregator

Liquidity is one of the key indicators of a crypto exchange. It shows how quickly a user’s asset can be converted into the desired currency.

For example, a user wanted to buy 3 BTC, and at the time the order was formed, the cost of one coin was $ 54,000. If the liquidity indicator is low, then he can buy the first BTC for the same $ 54 thousand, and the remaining two – for $ 54,300.

For comparison, on an exchange with high liquidity, he could have bought BTC at $ 54,100, and he would have lost not $ 600, but $ 200.

Obviously, the second time, the person will prefer to make transactions on a more liquid platform, which will lead to the loss of the client.

The liquidity aggregator is designed to prevent such situations. It allows you to add external providers and market-making algorithms to the system that will take risks, thereby increasing the liquidity of your exchange.

Development of wallets

Wallets give users the ability to store, deposit and withdraw money. Such functionality requires a high degree of protection to prevent fraudulent activities.

If you want to work not only with cryptocurrency pairs, but also with fiat, you will additionally need to develop fiat gateways and integrate them with payment systems.

Development of a personal user account

A user account is a platform where a trader can track and manage all his financial flows.

Website and application development

One of the main parts of a crypto exchange is a website with a user-friendly interface and attractive design. It should load quickly and work correctly on different devices: PCs, tablets and phones.

Additionally, a mobile application can be developed that will simplify the interaction of users with your exchange and help you popularize the platform.

Creation of a crypto exchange is a complex project that requires experience and a sufficient level of technical training from the development team.

 

The AVADA MEDIA team uses an up-to-date technology stack and specializes in creating high-load IT solutions. We will develop and provide ongoing technical support for crypto exchanges of any scale.