- A cryptocurrency exchange software is paramount to your cryptocurrency exchange business.
- In addition, there are a lot of auxiliary aspects that need to be put in place to make sure that your exchange functions as a tool and flourishes as a business.
- There are different kinds of exchanges, including but not limited to centralized exchanges, decentralized exchanges, and peer-to-peer exchanges.
At a time when cryptocurrency isn’t as dependable as a mode of transaction, cryptocurrency exchanges present a lucrative creative business opportunity. It can help make money through cryptocurrency in addition to the classical notion of cryptocurrency mining.
A cryptocurrency exchange software is paramount to your cryptocurrency exchange business. In addition, there are a lot of auxiliary aspects that need to be put in place to make sure that your exchange functions as a tool and flourishes as a business.
We have compiled below a list of features and steps that need to be taken to put your cryptocurrency exchange business in place. The most important of them is the process of cryptocurrency exchange development.
Finalize on the nuances:
Often when we think about cryptocurrency exchange, we tend to think in a linear fashion. However, a cryptocurrency exchange is far from being monotonous. There are different kinds of exchanges, including but not limited to centralized exchanges, decentralized exchanges, and peer-to-peer exchanges. As a business, it is important to figure out what kind of exchange you will be building. Based on the type of exchange, the variables like cost, time, and legal requirements are bound to change.
Get the legal aspects in place:
Cryptocurrency has shared a love-hate relationship with the legal framework and jurisdictions. On one side, it has been welcome to buy in countries like the United States and quite a lot of the European Union. However, some countries have been quite averse to the idea of cryptocurrency, and they have been staunch in their resistance.
Therefore, when you create your cryptocurrency exchange business, make sure that legal aspects are put in place. For example, the United States mandates that you should be a licensed money transmitter and must follow the rules of the SEC. That can also be a few narrow channels that can help reduce your cost without compromising on your legal entity – like setting up an exchange business in India but not catering to Indian customers.
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Ensure your funding:
Building a cryptocurrency exchange is capital-intensive. It is bound to cost you quite a lot, and the cost is distributed across different silos like technology, hosting, legal compliance, registration, and even advertising. Although all the funds might not be required upfront, it is critical for the business to ensure that it does not run out of funds before it matures.
This is one of the most common mistakes made by crypto startups who venture into cryptocurrency exchanges. There might be initial spikes in the cost, and it is mandatory that all these expenses are met until the exchange becomes profitable. It is to be remembered that sometimes, going for cheaper options like licensing might end up in you spending more in the long run.
Figure out the technology:
No! We are not talking about you learning the technology that goes behind a crypto exchange. However, it is important to understand the different modules that make the cryptocurrency exchange engine possible. You can consider hearing your own cryptocurrency exchange developers or partnering with a company specializing in cryptocurrency exchange development.
Alternatively, you can also consider purchasing white label cryptocurrency exchanges. These white-label source codes are extremely easy to customize, and they also ensure that you do not spend a lot of time and money developing the code from scratch. Considering the intensity of trust, white-label decentralized exchanges in vogue today.
Classically, liquidity is defined as the magnitude of the ease with which an asset can be converted into cash. In the case of a cryptocurrency exchange, it refers to the volume of transactions that happen in the exchange, which essentially translate into the ease with which traders can trade their currency. To enhance liquidity, you can consider simulating transactions within your exchange itself or you can consider time up with another exchange that has an established record of liquidity. There are even liquidity providers who specialize in this area of enhancing liquidity for your cryptocurrency exchange.
Tie up with the right payment partner:
Payment processes are an integral part of any cryptocurrency exchange. However, not all of them can be considered equal – they have differences in terms of transaction fees and fee structure. Make sure that you understand all the final elements of the contract, and also make sure that your payment processor complies with requirements like the PCI DSS. At the same time, there should not be any compromise on the versatility of the payment provider, and they should be able to accept multiple methods of payment.
Be uncompromising on security:
Cryptocurrency exchanges have the dubious distinction of being the primary target for hackers. Therefore, it should be ensured that you minimize the chances of a data breach. Simple things like two-factor authentication and SSL encryption could go a long distance in ensuring the security of your exchange and your users. In line with the security requirements, it is good to have a KYC formality in place for all your customers.
Be aggressive in marketing:
Building a robust cryptocurrency exchange and not investing in marketing would be the biggest sin in the entire process. You should have a proper marketing strategy in place that includes but is not limited to search engine optimization, press releases, participating in crypto forums, connecting with the right communities on platforms like LinkedIn, forming your own community on platforms like Telegram and Slack, and in advertising. It should be remembered that not all platforms have policies that support advertising related to crypto.
Provide customer support:
All the efforts said about will fall flat if not for proper customer support. Once the exchange is launched, your customers become your brand ambassadors. Therefore, customers need to be dealt with in an attentive and satisfactory manner. Customer queries and issues should be quickly and promptly addressed across multiple platforms, including telephone, chat, and email. Integrating a CRM and a ticketing system makes sure that there is a systemized resolution of issues.
It is quite evident that cryptocurrency exchanges make one of the most dependable and alliterative avenues for making a profit in the crypto space. If you would like to be one of those aspiring entrepreneurs who would like to capitalize on this new wave of business, all you need to do is get in touch with a cryptocurrency exchange development company that specializes in the customization of white label crypto exchanges. They will take care not only to understand your requirements but also to create and complete your exchange in line with what you need!