The Essential Components of a Cryptocurrency Exchange

The crypto market is witnessing a large number of businesses venturing into crypto-exchange software development to build new revenue streams. If you are also planning to build a cryptocurrency exchange, this article will guide you on the essential components of an exchange platform and what goes into building a powerful exchange.

Let us comprehend the steps for starting with a crypto exchange development company.

Company Registration

Like a business needs to get legally complied by registering its company and bank accounts, the same goes for a crypto exchange. Whether you are developing a white label crypto exchange or a new exchange from scratch, you need to get your exchange registered in the region where you intend to launch your exchange.

You should start by looking for a crypto-friendly country where you will register your company. There are various countries favorable to crypto exchange setup, such as the USA, Singapore, Malta, Estonia, Hong Kong, Luxemburg, Switzerland, and more.

Each country has a different set of rules and regulations so study the regulatory framework and government policy of different countries and choose the best-suited country according to your business model. Make sure to launch your exchange in a country that can help your business grow and if required associate with an attorney who would help you shortlist a crypto-friendly country.

KYC and AML verification

KYC (Know Your Customer) and AML (Anti-Money Laundering) are identity verification processes that validate the identity of users to ensure authenticated transactions on an exchange. KYC verification includes verifying any of the users’ identity documents like passport, driver’s license, or any address proof.

Components of a crypto exchange

Crypto exchange software development encompasses the integration of various components into the platform, such as:

Above mentioned are all of the vital components of any crypto exchange. Be it a secure trading mechanism, unlimited liquidity, or a guarded system, all are required for a powerful crypto exchange platform.

Graphic user interface

The design of a crypto exchange should be constructed very accurately. It should not only be visually appealing but also easy to understand and use.

The framework of the crypto exchange application should be captivating for both newbie and experienced crypto exchange users. Most of the exchange users are not that tech-savvy and are usually from the background of money-making, banking and investment or even politics. User interface and experience should be extremely simple to attract and retain users.

Matching engine

A matching engine is responsible for matching the buy and sell orders on the platform. A powerful matching engine can quickly match the buy/sell orders and enable quick transactions — one of the things that platform users look for in an exchange platform. Thus, make sure that your exchange is underpinned by a powerful matching engine as it will help acquire and retain more users.

Liquidity options

Liquidity remains a crucial factor which affects the tendency of an asset to be sold or bought. If your exchange has high liquidity, crypto traders are more likely to come to your exchange. The different ways by which you can maximize your liquidity are by listing various cryptocurrencies on your exchange, adding more payment streams, and by providing your users with access to multiple order books. Another mechanism that is widely used to achieve high liquidity on an exchange is via trading bots.

Cryptocurrency wallet

If you trade Bitcoin, Ethereum or any other cryptocurrency, it needs to be stored somewhere in a wallet. A crypto exchange needs to be integrated with a secure wallet to store and transfer crypto assets. You can have a multi-currency wallet to enable your platform users to store their crypto assets all in a single place.

Security of a crypto exchange

When it comes to crypto exchange software development, security remains a prime concern to build credibility among the target audience. Many leading crypto exchange platforms have fallen victim to hacks in the past, thus you must fortify the security of your exchange to provide your users with a secure platform for trading.

Mostly, hacking attempts are carried out through server, administrator panel, and social engineering. To combat this, you can integrate your exchange with features like HTTP authentication, data encryption, jail login, CSRF protection, Anti-DoS (Denial of Service), and Anti-DDoS (Distributed Denial of Service).

Summing Up

Various countries and large global corporations have started to slowly accept cryptocurrencies. As more and more countries get receptive to cryptocurrencies, these digital currencies will gain mainstream adoption.

If you are planning to build your cryptocurrency exchange, Antier Solutions can help. We are a trusted cryptocurrency exchange development company with a team of experienced blockchain developers and subject matter experts. We offer mission-driven exchange development solutions, helping businesses to build their custom exchange from scratch or launch their white label crypto exchange in just 3 weeks.

Schedule a free demo of our white label crypto exchange or get in touch with our subject matter experts to share your needs for a custom exchange.

DeFi, Crypto banking, White label cryptocurrency exchange development, Crypto wallet development, coin development, fintech, Blockchain