Development of a P2P crypto exchange

P2P, or Peer-to-Peer Crypto Exchange, is a platform where users can buy and sell crypto directly, without the involvement of third parties. This is a fairly common type of relationship in the digital currency market, which makes transactions faster, cheaper and safer.

The principle of operation of such exchangers is quite simple: when a participant in a transaction makes a transfer, his funds are not immediately credited to the account of the counterparty, but are “frozen” until the other party performs similar actions.

After confirmation of payment by both users triggers a smart contract, and automatically transfers assets to their accounts.

In fact, P2P exchangers simply match buyers with sellers and provide transaction protection with the help of escrow services, rating and feedback systems, and also help in resolving disputes between users.

P2P crypto exchangers most often do not charge a fee for transactions, so a natural question arises – what makes them profitable?

In fact, such a solution can have at least three income items:

• Fee for publishing an offer. That is, the exchanger can receive income regardless of whether the transaction was actually completed. He simply takes a commission for posting a user’s ad for the sale or purchase of crypto.

• Income from external services. The exchanger may provide a paid API to traders and developers for use in third-party portals and applications.
• Profit for resolving disputes. If regular transactions can be free, then arbitrage functions are most often provided by exchangers on a paid basis.

Peer-to-peer cryptocurrency exchanges can have a variety of functionality. Consider the most basic, without which it is difficult to imagine the work of such a service:

• Smart contracts. Software scripts that are hosted on the blockchain network and are used to automatically conduct transactions.
• Catalog of offers. A place where information about all current announcements for the purchase or sale of cryptocurrencies is posted.
• Integration with payment services. Required for transactions with fiat money.

• Personal Area. It is often needed only for CEX exchangers and is used to verify users. DEX, or simply a decentralized exchanger, assumes the anonymity of users and does not require verification.
• Rating and feedback system. Helps new users to find trusted counterparties.
• Escrow service. Transaction security tool.

The process of developing a cryptocurrency exchanger consists of six consecutive stages. Let’s consider them in more detail.

Stage 1. Research

Before starting technical development, specialists carefully study the client’s requirements, vision and priorities, as well as analyze the closest competitors. This allows you to define clear project objectives and form the optimal development team for its implementation.

Stage 2. Design and development of documentation

During the design process, developers test ideas, define the concept of the exchanger and create its prototype – a framework on the basis of which further implementation will be built.

Typically, a prototype includes:

• Warframes – a schematic visualization of the structure and content of the interface.
• Block diagrams of functionality and smart contracts.
• A table with a textual description of the functional part.
• A table of formulas that will be included in the code to perform various calculations.

In addition, during design, the team determines the viability of the main modules of the product, and eliminates all possible design errors even before the start of technical implementation. Ultimately, this helps save the customer’s budget and speeds up the development process.

Stage 3. Design development

Statistics say that 46.1% of users decide whether a digital product can be trusted based on its appearance. Therefore, an attractive and convenient design for an exchanger is no less important than its functional part.

In most cases, our team develops the visual environment of such services individually, based on the portrait of the target audience and usability rules.

Stage 4. Programming

The technical development of a crypto exchanger consists of three parts:

• Frontend. The client side of the project that users interact with. For its implementation, static HTML/CSS/JavaScript technologies or reactive technologies, such as Vue.js/React.js, can be used.
• Backend. This is the server side of the exchanger, which is responsible for storing and processing information. It can be developed using Python/PHP programming languages, Node.js platform and Django/Flask/Yii2/Laravel frameworks.
• Blockchain development. This part includes the implementation of smart contracts, which are responsible for the safe conduct of financial transactions. They can be written in Solidity, Rust or other languages, depending on the chosen blockchain.

Stage 5. Testing

After the technical development is completed, the P2P cryptocurrency exchange undergoes thorough testing in the QA department, and only after that it is released and placed on the blockchain.

Stage 6. Technical support and development

By their nature, smart contacts cannot be modified or deleted.

However, this does not mean that after the release, the development of the crypto-exchanger stops, since its front-end and back-end parts can be finalized and improved without restrictions.

Moreover, if necessary, our team can release a new version of the smart contract. However, you need to understand that in this case, the old version will still exist in the blockchain and users will be able to continue using it.

P2P exchangers are very popular in the market, as they allow users to exchange crypto or transfer it to fiat absolutely free, quickly and safely. Nevertheless, the owners of exchangers have quite a few tools for generating profits, due to which investments in such solutions quickly pay off.

Our team has experience in developing and launching blockchain solutions of varying complexity, from small wallets and exchangers to large decentralized exchanges. Through our understanding of this market and careful design, each of our products is designed to effectively solve complex problems and help our clients earn money.