How to Setup a Crypto Exchange for Brilliant Digital Asset Trading

The idea of how to setup a crypto exchange may sound like a complicated and impossible task, but it’s quite straightforward for anyone with experience in the IT sector (check the Topflight experience, for example). You can start your own cryptocurrency exchange by following the six steps discussed later on in the blog. These steps have proven effective with many competitors, and with a little creativity, you can convert your business’s idea into a truly remarkable cryptocurrency trading platform.

Cryptocurrency Market Overview

By 2030, the crypto exchange market could be worth $4.94 billion, making it one of the fastest-growing markets globally. There are already more than 500 cryptocurrency exchanges throughout the world, with a total daily trading volume of more than $100 billion.

Typical cryptocurrency exchange platforms

Different cryptocurrency trading platforms have different features, especially when it comes to the creation of DeFi applications. This section will break down crypto trading platforms:

 

CEX (Centralized Exchanges)

For trading digital assets on a centralized exchange (CEX), users must first deposit their assets. The operator facilitates a market for buying, selling, and storing bitcoins; in exchange, the operator receives a cut of all trades made on the platform.

 

DEX (Decentralized Exchanges)

DEXs are a newer form of cryptocurrency exchange that makes use of blockchain technology to provide secure and transparent transactions. They are decentralized because you don’t have to trust anyone else with your Bitcoin, and your money is safe from theft. They are not linked to any central hub or business.

 

P2P (Peer-to-Peer)

Peer-to-Peer Exchanges (P2P) are virtual marketplaces that put buyers and sellers in direct contact. Vendors set their prices for their items or services, and consumers pay vendors directly using their preferred payment method.

 

Hybrid crypto exchanges

Hybrid cryptocurrency exchanges are a cross between traditional centralized exchanges and decentralized alternatives. These platforms typically feature a governing body with the final say over some aspects of the exchange (such as security) while allowing users to have some discretion over the assets they store on the platform.

Real Life cases of perfect cryptocurrency apps

Within the context of the current cryptocurrency craze, the niche of cryptocurrency exchanges is expanding rapidly. Below, we’ll examine some of the most successful cryptocurrency exchanges to date to help you envision how to build your successful platform.

 

Coinbase

In terms of user base, Coinbase, headquartered in the United States, is the largest cryptocurrency exchange platform with roughly 100 million members. Since its creation in 2012, the company’s quarterly trading volume has grown to above $300 billion.

 

Binance

Binance processes more daily cryptocurrency trades than any other exchange. Changpeng Zhao created it in 2017, and it now works in multiple countries throughout the world, despite regulatory obstacles in the United States.

 

FTX

FTX processes up to $10 billion in daily trades, making it the second-largest cryptocurrency exchange in terms of trading volume. The Caribbean firm serves over a million customers and runs a rival exchange, FTX.US, for those in the United States.

 

Kraken

Kraken is another prominent and widely-used cryptocurrency exchange. This year it was estimated to be worth $10 billion. After debuting in January 2021, the app has seen massive success among users throughout the world.

While we cover the details on how to make a cryptocurrency exchange, consider navigating towards the link to read about crypto exchange development in more detail. 

Features of crypto exchange platforms

Before you start an exchange for cryptocurrency, it’s important to be mindful that cryptocurrency exchanges require several features. It must be straightforward to use since hundreds of thousands of people will use it daily.

 

Crypto Wallet

A cryptocurrency wallet facilitates the transfer of cryptocurrency to and from other cryptocurrency wallets. Users need a wallet system integrated into the exchange where their money can be accessed at any time.

 

User sign-up

Crypto exchange platforms require sign-up. It lets users create accounts and use the exchange’s features. Users usually enter their name, email address, and password while signing up. To meet with regulations, some exchanges may need additional identification verification measures, known as Know Your Customer (KYC) procedures. User sign-up provides security and accountability by limiting platform access to authorized users.

 

Graphs and charts

Charts and graphs are vital for crypto exchange traders. These charts show cryptocurrency prices over time. They let users evaluate historical and real-time price data, find patterns, and trade wisely. Adding technical indicators, changing time intervals, and comparing several assets are common alterations options for graphs and charts. These features enable users to successfully monitor and analyze market developments by presenting data visually and intuitively.

 

Orderbook

The order book is a critical component of a cryptocurrency trading platform. It displays all open buy and sell orders for different trading pairs. Users can see the market depth and liquidity in the order book by viewing the amounts of assets available for trade at different price levels. By examining the order book, traders can judge a cryptocurrency’s supply and demand dynamics, market sentiment, and optimal trade pricing and timing. It also aids traders in strategy optimization and decision-making.

 

Portfolio analysis

Portfolio analysis tracks and analyzes crypto holdings and trade. Users can view their Bitcoin portfolio, including amount and value. This feature shows the portfolio’s overall profit or loss, percentage gains or losses, and value over time.

 

Push Notifications

It is crucial in the cryptocurrency market to keep up with the latest price changes and industry trends. The goal of every investor is to be the first to capitalize on a price drop or rise in a cryptocurrency.

Technologies needed for creating exchange platforms

There seems to be a new cryptocurrency exchange opening every day, but not all of them have the same level of security. Even if you plan to use open-source software, you should familiarize yourself with the necessary technology stack before attempting to build a cryptocurrency exchange. 

 

Frontend: jQuery, AngularJS, React, Bootstrap,

 

Backend: Python, Django, PHP, NodeJS,

 

Data Management: MongoDB, Redis, PostgreSQL,

 

Android Mobile: Android SDK, Kotlin, RxJava, Android Studio, Ionic, Xamarin, Flutter

iOS mobile: Swift, XCode, iOS SDK, Core Data, Ionic, Xamarin, Flutter

How to make a cryptocurrency exchange

In this part, we will outline the processes required to start your own Bitcoin exchange. Instead of discussing the financial implications of these transactions, we will go deep into the technical particulars and potential use cases.

 

Discovery and Market Research

The initial stage of developing a cryptocurrency exchange is to do extensive exploration and market research. This requires familiarity with the state of the cryptocurrency market, research into relevant competitors, and identification of potential customers. Market demand, legal restrictions, security concerns, and technological viability should all be considered in the research.

 

Budget calculation

Once you have a detailed idea of the project requirements, you must calculate the budget for creating the Bitcoin exchange. Infrastructure, software, security, compliance, marketing, and maintenance are just some of the technology-related expenses that need to be estimated. A well-planned budget will give you the means to carry out each phase of development with precision.

 

Designing blueprints and wireframes

The next step is to build the blueprint and create wireframes for your Bitcoin exchange after completing market research and establishing a budget. This includes establishing the primary features and functionalities, outlining the UI and UX design, and making a graphic representation of the structure of the exchange. Designing the blueprint and wireframes allows you to create the overall architecture and navigation flow of the exchange, delivering a seamless and intuitive user experience.

 

MVP creation and usability testing

Once the plan and wireframes for your Bitcoin exchange are complete, it is time to start working on a Minimum Viable Product (MVP). The MVP offers the key components required for basic functionality. It’s a great way to measure interest from consumers and evaluate the market’s reaction. During this stage, usability testing is essential for spotting usability problems and developing solutions.

 

Final Product development

Once you have completed the minimum viable product for your Bitcoin exchange, you can move on to the next phase of development. This includes adding new functionality, improving the user interface and user experience, and adding safety features. The development phase involves frontend and backend development, database integration, trading functionality, and market data and payment gateway API integration.

 

Deploying and Maintenance 

After testing and bug fixing, your cryptocurrency exchange is ready to go online. There must be correct server configuration, security protocol configuration, and functionality testing done. Maintenance is necessary to keep the exchange secure, up-to-date, and optimal. In order to keep the exchange running smoothly and securely, it must be constantly monitored, bug-fixed, and updated.

Wrapping up!

  • Due to the rising demand for cryptocurrencies and blockchain technologies, the worldwide crypto exchange business has grown significantly in recent years.
  • Building a cryptocurrency exchange lets you capitalize on the digital currency explosion.
  • Cryptocurrency exchanges must enable high-volume trading and deliver a pleasant user experience. Cloud technologies, microservices, containers, DevOps, and CI/CD can achieve this.
  • We hope this blog will provide you with all the necessary information on how to create a crypto exchange platform or how to make a cryptocurrency exchange.