How to Create an Efficient Cryptocurrency Exchange in 2023

The phenomenon of cryptocurrencies is increasingly capturing the minds of ambitious people worldwide. The most massive surge of interest in new world money occurred two years ago when the price of Bitcoin skyrocketed. It attracted hundreds of thousands of people who saw an opportunity to trade and make money here and now. So, exchange development and the creation of cryptocurrency exchanges are also becoming increasingly popular, allowing users to trade and earn on their virtual currencies.In this article, we will give you the basics of how to make your crypto exchange. If you are on the topic, you will be at the TOP! Roll up your sleeves and get to work on the exchange development!

Type of crypto exchange: the first thing to decide

There is no need to delay! You are about to build a cryptocurrency exchange. First of all, you need to choose the type of exchange service. There are CEX, DEX, and hybrid trade platforms. Let’s take a closer look.

CEX vs DEX: the key differences between cryptocurrency exchange platforms

CEX is a centralized trade and exchange platform, and DEX, respectively, is decentralized. CEX allows bidders to operate not only with virtual money but also with regular dollars or any other “classic” currency. At the same time, depositors’ money is stored on the platform’s servers. All transactions take place there, which makes them faster compared to transactions on the DEX.

It is clear that the crypto exchange platform, in such a case, is responsible for the users’ assets. However, this is precisely the weakness of centralized exchanges: their codes can be hacked. Therefore, you will have to ensure all possible security measures!

With the DEX exchange platform, it’s the other way around. This trading system works on the Blockchain and the principle of smart contracts, which ensures maximum security of depositors’ assets, as they are stored in their personal wallets and transferred directly from user to user.

However, the DEX exchange platform does not allow fiat money to be traded. Also, the speed of transactions is limited by the Blockchain, and such cryptocurrency exchanges do not have their own support service, which can be a problem for beginners. In addition, there is a less favorable exchange rate.

What is a hybrid crypto exchange?

A feature of hybrid crypto exchange platforms is that the history of Blockchain transfers is stored in the chain, but the transactions themselves are processed on the server. This increases the speed of trade operations and minimizes risks. Hybrid trade platforms are a relatively new phenomenon. One example is the Legolas Blockchain exchange platform.

Choose the exchange software for the crypto exchange platform

It makes no sense to dwell on this issue for a long time since, to talk about crypto exchange development software in detail, you will need to write a separate article (perhaps we will do this soon). However, here we cannot fail to mention the importance of Blockchain exchange service. This will ensure your business’s viability and efficiency if you want to create your own crypto exchange.

Pay attention to the engine and interface — this is the yin and yang of your Blockchain product (in fact, your trade platform is a kind of product for users). Also, configure the system admin panel when making your crypto exchange. This will help you manage the exchange effectively. Do not skimp on finalizing the software code to suit your needs because the more carefully you approach the process of crypto exchange development, the more profit you will get.

Of course, you can create your own Blockchain cryptocurrency exchange and trade software from scratch code. But scratch is very costly, not only in terms of money but also in terms of time.

Choice of liquidity provider for a crypto exchange platform 

A liquidity provider is a financial institution that performs intermediary functions in making trade transactions using various financial instruments for exchange platforms. It acquires many specific financial instruments and then scatters them on brokers. The latter, in turn, opens direct access to them for traders and investors.

If you decide to start your own Bitcoin exchange and trading solution, we recommend that you study the offers of different providers of cryptocurrency exchange very carefully. Pay attention to the following:

  • the legality of the partner’s activities;
  • deadlines for the execution of contracts on a crypto exchange platform;
  • availability of a support team;
  • software used by the partner;
  • spreads.

Connect a payment aggregator to your crypto exchange

This will allow you to build an exchange platform for users with the ability to make payments. Different companies offer different terms of cooperation and have further technical potential, so the choice should also be approached wisely, having previously studied the market. Create a cryptocurrency exchange mindfully!

Some extras for creating a cryptocurrency exchange

There are also a few evident at first glance things that, nevertheless, should be mentioned separately.

  1. Carefully study the legal grounds of the state where you will deploy your Bitcoin exchange. Some countries generally prohibit the building of crypto exchanges, so you need to check the legislation well.
  2. Whether you choose to build on the CEX or DEX cryptocurrency exchange, you always need to be vigilant and take care of the safety of your users. Unfortunately, even though the virtual currency is becoming increasingly popular, many are still wary of this kind of activity. Keep this in mind when you create a crypto exchange.
  3. Test, test, and test again when you build a cryptocurrency exchange! You must wait to launch your cryptocurrency exchange platform before you are sure your solution works as it should and that depositors’ assets are safe under any circumstances. Otherwise, you simply risk losing the trust of users after you created a cryptocurrency exchange.

How much does it cost to build your exchange platform?

The minimum amount is $50,000. Depending on other factors, the price of creating an exchange platform can be as high as $100,000.

These are approximate figures and can be calculated by taking into account important aspects such as maintenance costs, server costs and the volume of crypto you want to integrate. 

For instance, the price of software with basic features, technical capabilities and security integrations will range from $8500 to $25000, but it will vary slightly from client to client depending on their business requirements and location. You can also check the price list of various companies that offer crypto exchanger development services to confirm for yourself these figures.

Keep in mind that to develop a cryptocurrency exchange you need to have a team of experienced specialists, this also affects the price of developing a cryptocurrency exchange.

Final words about exchange platforms

So, the conclusion is that to develop your crypto exchange platform successfully, you must:

  • clearly understand the advantages and disadvantages of the system you are using;
  • carefully work out your cryptocurrency exchange software;
  • ensure the reliability of the liquidity provider and payment aggregator when you build a cryptocurrency exchange;
  • take care of the security and usability of the crypto exchange platform;
  • settle all the subtleties of the legislation before you start to build it.

By following these simple tips, you can successfully build your cryptocurrency exchange and achieve success in creating a crypto exchange. Good luck!