There are two types of people in the world: those who continue to believe that cryptocurrencies are a passing fad and those that actively use digital currency in their daily lives and even rely on it to make their riches. Over 2,000 cryptocurrencies exist today, and more are constantly being created. We now have more business prospects thanks to blockchain. Fortune Business Insights projects that the worldwide blockchain market will grow to $69.04 billion by 2027. In light of this, it is not surprising that cryptocurrencies have emerged as a new form of investment. The success of Binance and Coinbase has likely prompted the majority of market participants to consider starting their own cryptocurrency exchange at least once. As developers of bitcoin exchange platforms, we made the decision to put together a thorough manual to assist you in producing high-quality software. The case study was presented.
How does a platform for crypto exchange operate?
Online marketplaces called crypto exchanges to let you purchase, trade, and transfer cryptocurrency. They stand out for their quick transactions and inexpensive fees, which appeal to both small and major investors. Users can purchase and sell digital currency, watch changes in exchange rates, and make money from it by registering on such an exchange. The following is how a transaction is completed.
- Setting the value and volume of a coin allows a user to generate exchange requests.
- A contract is reached between users if an appropriate counter-offer has already been registered on the website.
- A proportion of the transaction amounts are paid to an exchange. Each trade has a different proportion. For instance, Binance only levies a 0.1% commission on each trade as well as negligible withdrawal fees.
- Any exchange appears to users as a standard website with updated rate information, a database of buy- and sell orders and a trading platform where members of the network can carry out transactions depending on the information provided. However, this is really a front for buried, strong logic. After all, a cryptocurrency exchange must offer a range of services, including the ability to create accounts, check balances, transfer money between wallets, and withdraw money. As one of the key components of user trust, transaction speed and security are very important to us.
Specifications of a platform for cryptocurrency trade
Building a strong software product requires careful consideration of the functionality of a complicated platform like an exchange. Regardless of whether you intend to offer to trade of one or several cryptocurrencies, you need to start with the fundamental capabilities that your platform has to have. The basic components of a crypto exchange framework typically include the ones listed below.
User identification and validation
You must offer a quick onboarding procedure because authorization is the first step on the user’s journey to your exchange. Users anticipate that the network’s participants will be trustworthy and have good motives. Verification is crucial to guarantee transaction transparency and reduce the risk of fraud. Additionally, it attests to the cryptocurrency exchange’s compliance with global standards. Allow two-factor authentication (2FA) and anti-bot verification, and ask users to confirm their identity by showing their ID and a photo. To guarantee the secure storage of users’ data, you must prevent any opportunity for illegal access to accounts.
Naturally, people are less inclined to divulge personal information for validation. It is your responsibility to allay their worries and demonstrate that you won’t divulge personal information to outside parties. Making the registration process uniform and user-friendly may be achieved with good UX/UI design.
The basis of your platform is your trading engine. Your exchange’s operation is under its control. For instance, in this case, the system verifies user account balances and transaction possibilities, analyses data on prices and commissions, makes schedules, matches offers, and bids, and does similar tasks. Users need to see real-time trading data in order to manage their assets properly. Thus you must ensure fast processing.
One of the most challenging aspects of creating a crypto platform is engine development. To create an efficient architecture and construct the proper logic for the exchange, you will need a team of blockchain developers with extensive experience.
How others view your communication depends on the user interface. The user interface must be straightforward, easy to use, and uncomplicated. You can rely on loyalty by giving users a better trading experience. A user should be able to place buy and sell orders and check the most recent order book, previous transactions, balances, statistics, etc., through the admin panel. Reading information is made easier by graphs and diagrams. You may shorten the time it takes to create and complete transactions by designing a user-friendly interface, improving the productivity of your exchange.
Typically, candlestick charts are the sort of chart used by cryptocurrency exchanges. Each candlestick in it displays the rate change for the chosen period; green indicates an increase, and red indicates a decrease.
The cryptocurrency exchange dashboard should offer rapid access to functions like:
- Order creation and cancellation
- market surveillance
- the history of orders
- withhold money
- Contacting support and more.
You can store and transfer your virtual currency using wallets. Typically, a user receives a wallet right away after registering. Your platform’s e-wallets for digital currencies must support secure transactions for withdrawing and converting your virtual money to fiat money. Consider the methods through which users can top off their wallets and transfer money from them to a card or account. For instance, Coinbase enables you to easily transfer dollars to and from your wallet by connecting a US bank account. Direct bank transfers are available in manual mode, while Visa or MasterCard services are available in automatic mode.
Yet another thing Wallets come in two varieties: chilly and heated. The primary wallet utilized for adding user monies to balances and making withdrawals is known as a hot wallet. Since a cold wallet is not connected to the internet and is, therefore, secure against fraud, it is used as a backup. It frequently moves money from a hot wallet to a cold wallet and vice versa in order to protect the exchange against hackers. Choose whether you want to provide your consumers with a hot or cold wallet.
Order history and financial transactions
Order book and transaction history are additional crucial components of an effective exchange. The list of open orders that exchanges create by grouping the actual buy and sell orders individually is known as an order book. An exchange instantly closes a trade between users when an order discovers an offer that meets its requirements, and the executed orders vanish from the list. The current bids can be browsed by users using an order book.
Key details about the transactions, including the trade rate, the amount, and the precise moment of the transaction, are contained in the list of completed trades or trade history. Users can monitor the effectiveness of their operations using history. When creating a cryptocurrency exchange, keep in mind these features.
Tools for analysis for traders
The internal analytical system is the next element that will assist you in luring experienced traders to your exchange. Trading professionals can use analytical tools to construct their game plans and learn more about market patterns. You should choose the technical indicators you wish to employ in your cryptocurrency exchange development company because traders use a tone of them. The Relative Intensity Index (RSI), for instance, displays the strength of a trend and the possibility that it may change. This indicator shows the rate of change in the price as well as the size of recent price fluctuations. Another crucial indicator, the moving average (MA), which is based on historical price data, aids traders in spotting patterns by displaying the average price over a chosen time frame. Other well-known indicators include Bollinger Bands (BB), Stochastic RSI (StochRSI), Moving Average Convergence Divergence (MACD), which aids in anticipating market swings, and others.
Push alerts and notifications
Maintaining communication with your users will be made easier through push notifications. Due to the fact that traders won’t miss significant events, push notifications and alerts are practical for both you and traders. You may inform consumers about promotions, news, and exclusive deals with alerts. For instance, traders can view alerts on price changes, trend changes, coin listing alerts, exchange listings, and other such things. There is one thing, though. Don’t forget to provide people the option to turn on or off certain notifications. Alerts ought to be beneficial, not bothersome.
Development of a cryptocurrency exchange platform
You can begin building your cryptocurrency exchange once the business aspect, technical needs, and exchange type have been addressed. Make certain you collaborate with a group of seasoned developers who can offer you effective case studies. You can lower development costs by selecting an experienced provider. The following steps are typically included in a crypto exchange platform’s development process.
UI/UX design An efficient user interface for your platform is created by a team of designers based on your specifications and market research. A thorough visualization can help you see any UX problems and show you how users interact with the exchange logically.
Front-end programming. The user interface design is put into practice in the front end. Developers now build the user-visible portion of your exchange. The front-end section is in charge of your platform’s appearance and feels, which is crucial for drawing in and keeping consumers.
Back-end programming. The logic of your platform and all necessary actions are handled by the back-end section. The result of a conventional trading exchange optimized for the exchange’s incorporation location can be used by a development team. Then, this foundation is modified to meet your needs, and a custom trading engine is developed. The business has access to a number of APIs for further resource linkages with third parties.
Developing improved security features. At this point in the development process, experts add a number of security elements to the platform to make it trustworthy for both current and future users. A password-protected user interface and an encrypted database are two of the most crucial security precautions.
The digital money is listed on the exchange. The development team adds the required coins to the platform after determining which cryptocurrencies you wish to list on your exchange. After that, users will be able to purchase and trade various kinds of cryptocurrencies.
Setting up the exchange. Your cryptocurrency trading platform is now ready to use after numerous tests and modifications. Although there is a lot of work to be done in terms of promotion and support, it will be much simpler if the software is of good quality.