- If you are willing to start a business with your own cryptocurrency exchange, a decentralized exchange is an ideal solution for the ongoing trend.
- As transactions happen peer-to-peer on a decentralized platform, the exchange acts like an intermediary between helping buyers and sellers find each other for trading their digital currencies/ assets.
- There is no single point of failure. Even if there’s a fault in any one network, or it stops working, the exchange will still function with zero downtime.
Any entrepreneur who is fascinated with cryptocurrencies will inevitably end up needing an exchange to trade them and boost profits. As cryptocurrencies have gained enormous traction over the years and have become mainstream in this digitally evolving business era, thousands of crypto users are emerging each day. As a consequence, thousands of new exchanges are created. The two primary types of crypto exchanges are centralized and decentralized exchanges.
Centralized exchanges are the most used exchanges among investors around the world. However, these exchanges have been facing ongoing challenges over the years, such as hack threats, stealing of funds, and other fraudulent issues. This led to the increasing popularity of decentralized exchanges(DEX), and investors are inclined more towards them over centralized exchanges because of the various advantages involved.
If you are willing to start a business with your own cryptocurrency exchange, a decentralized exchange is an ideal solution for the ongoing trend. If you are a beginner, it is vital for you to understand all about a decentralized exchange software, to make an informed decision. This blog is going to help you with that. Let’s begin from a quick glance at what a decentralized exchange means.
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What is a decentralized exchange?
A decentralized exchange( DEX), operates based on a blockchain network and facilitates crypto trades on a distributed ledger, instead of relying on a third party. In simple terms, this exchange allows users to conduct direct, peer-to-peer transactions from anywhere around the world through the distributed blockchain network.
As transactions happen peer-to-peer on a decentralized platform, the exchange acts like an intermediary between helping buyers and sellers find each other for trading their digital currencies/ assets. To help you understand more clearly, let’s see how a decentralized exchange works.
How does a decentralized exchange(DEX) work?
- The buy and sell requests by the traders is sent to the relayer that hosts the order book. The order book matches the traders with each other to decide upon the price that they are going to exchange the asset in, the transaction fee, etc.
- Once they decide on these factors, the involved parties will sign the order book and create a counter order.
- After the terms and conditions are agreed by both parties, the smart contract, which is a self-executing contract, automatically executes the trades and the crypto is transferred to the user’s wallet. Blockchain records every transaction happening on the platform and completely secures the user’s funds with a chain of blocks coded with strong cryptography.
This is how a transaction takes place in a decentralized exchange platform. The process is direct, simplified, efficient, quick, and secure.
To make the process of developing a decentralized exchange also simplified, efficient, quick, and more reliable, a white label decentralized exchange was reinforced. A white label decentralized exchange is nothing but a readily available software integrated with every essential technology and security infrastructure for the exchange to function seamlessly. The customers can just purchase the software, and customize it according to their personal preferences to launch it promptly in their own desired brand.
Why should you go with a white label decentralized exchange? What are the key benefits? Let’s take a look below.
Benefits of a white label decentralized exchange
- No single point of failure
As mentioned earlier, white-label decentralized exchanges work based on a blockchain distributed network. So, there is no single point of failure. Even if there’s a fault in any one network, or it stops working, the exchange will still function with zero downtime.
A white label decentralized exchange protects and secures the user’s interest completely. Users are enabled to sign up with a decentralized exchange without having to provide any personal details which give them more privacy.
- Complete control over funds
One of the most appealing benefits of decentralized exchanges is that users get complete control over their funds. In a centralized exchange, the user has to deposit their funds into the exchange to commence a transaction and the funds will be controlled by a third party. On a decentralized exchange, customers can transact directly between wallets with the exchange’s order book and have control of their funds at every step.
- Enhanced security
As white label decentralized exchanges allow peer-to-peer transactions without involvement from a third party, they are more secure when compared to centralized exchanges.
- Safe from hack threats
As decentralized exchanges work on a distributed network, it is impossible for hackers to access and steal the funds.
Essential Features for a white label decentralized exchange software
- Multi-currency trading support
- Automated KYC/AML verification
- Globalized access
- Robust Matching engine and Order Book
- Secure, multi-currency wallet
- Admin backend panel
- High-Volume Liquidity
- Cutting-edge blockchain technology and smart contracts
- Automic Swapping option
- Multiple payment gateways integration
- Multi-Factor Authentication
- Preferred trading option
- Multi-layer security
Are decentralized exchanges the future for trading with cryptocurrencies?
Decentralized exchanges are already making huge rounds in the market, all around the world among potential investors because of their multi-fold benefits when compared to centralized exchanges. Experts have predicted that the complete switch to decentralized exchanges is not far off. They also say that the challenges involved with decentralized exchanges are easily solvable, and they are definitely a key pillar of the blockchain ecosystem. As more entrepreneurs start realizing and understanding this, this will become a mainstream adoption. And white label solutions are the most ideal solution for this fast-paced digital business world.
So, to be a part of this revolutionary and lucrative business opportunity, and to get rolling in the market in no time, and mark a solid spot for you among your competitors, conduct extensive research, and choose a well experienced, reliable white label crypto exchange software development company!