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The Anatomy Of A White label Cryptocurrency Exchange

As more countries embrace cryptocurrency, it seems appealing to have the idea of running a crypto exchange.

If you’re an entrepreneur who wants to start your own crypto business and perhaps one day grow it into a big business like Binance, Coinbase, the first thing you think is probably building your own white label cryptocurrency exchange if you have the skills and an experienced team with you.

Keep in mind, the cryptocurrency world is vulnerable. One famous example of vulnerability is the “MT.GOX hack”

Mt. Gox suspended trading in February 2014, closed its website and exchange service and filed for creditor bankruptcy protection. The company commenced liquidation proceedings in April 2014.

Mt. Gox announced that roughly 850,000 customer-and company-owned bitcoins were missing and likely stolen, an amount valued at that time at over $450 million. While 200,000 bitcoins have been’ identified’ since then, the explanations for the disappearance – robbery, fraud, mismanagement, or a combination of these – were unknown at first. New evidence presented by Tokyo security company WizSec in April 2015 led them to conclude that “most or all of the missing bitcoins were stolen over time straight out of Mt. Gox hot wallet, starting in late 2011.

But, almost every day, a new exchange launch occurs, while some exchanges are being shut down due to different reasons (cost, cyber-attack, etc.).

The single most important thing, ever, is to build a powerful, secure cryptocurrency trading platform.

Okay, let’s talk here about crypto exchange software, the system, the platform.

From a user’s perspective, the crypto exchange platform consists of a web-end, Mobile App (IOS, Android) and HTML5, that’s the interface. The tangible part that users / investors check the index, register account, and send transactions on the crypto market.

There are three things you need to consider most:

  1. Safety : Is it a safe system? This is, literally, a million-dollar question, and perhaps more. No one will trust an unreliable system without out – of-date technology. And you don’t get a second chance at most exchanges. In the vulnerable crypto sphere,  the exchange system must be reliable and strong enough to survive
  • User Experience : This requires an enticing graphical UI and a well-designed user experience. The last thing your user would want is to spend 10 minutes just to click on the right “button.” In addition to general usage, “Liquidity” is another key component of great user experience, it is not acceptable to take 1 minute to process a $1000 worth order. Not to mention for a considerable number of transactions. If someone drops an order of 1 million dollars to buy major coins, will you be able to exchange the order and settle the transaction within seconds?
  • Instrument : The key to success is to make sure that your exchange provides the instrument the investors are looking for. A lot of exchanges began with a simple token-swap, peer-peer exchange system with few popular coin pairs, some exchanges expanded to more instruments like future-trading, ETF, etc.

Also See : Maximize Your Trading Benefits From Cryptocurrency Exchange Development

How are we gonna deliver that?

Okay, the most ideal situation is to do the coding, build it all on your own, of course, such a task requires you to have great tech and product team working together, and the initial cost would be high, and you also need to test the system before you start it.

There are questions about when and how the program will be operational. The cost of uncertainty is difficult to measure, and the investors may not like it. Meanwhile the market is rapidly changing, sometimes being difficult to catch up with.

Needless to say, the “DIY” choice is not an ideal option for a start-up business, in terms of cost, time, and execution. That’s why the majority of startups choose crypto-exchange solution providers for time and cost-effectiveness.

The providers of crypto exchange solutions sell the software or the white-label exchange. Usually the solution providers have more experience and sophisticated line of products that have been tested by the market. Those products are also ready to go.

As a customer, you can ask for custom functions to realize your imagination and possibly change the industry. Cheers!!!

But how do we choose our crypto business for the right crypto / white-label exchange provider?

Well, that depends on your budget and the situation you have. In general terms, the provider of crypto exchange solutions offers two types of products:

1. Self-hosted system

Which means they sell the source code to the customer, the customer has full ownership of the system (you can’t resell it for profit of course), the customer has full control over the cold and hot wallet.

Choosing a self-hosted program with source code definitely seems to be the most desirable option but bear in mind.

Once the company provides the program to you, you need to have the maintenance handled by your own tech team and know what you are doing.

In addition, you must have your own server and operate it.

Some people may wonder, since you want to run your own crypto-exchange, you shouldn’t have all of the things.

I suppose the answer to that is yes? I mean… you ought to. But for a lot of start-up companies the reality is that the budget is limited.

2. SaaS

A lot of providers of crypto exchange solutions have come up with a sort of solution called SaaS.

SaaS stands for software as a service, it is cloud-based, run as custodian service, meaning the solution provider hosting the client’s system.

You just need to change the UI design and put your name and LOGO on it, as the client, and you’re ready to go.

It’s basically like you’re choosing a template with very little front-end customisation.

The pros are cost efficiency, the system is cloud-based, meaning you don’t need to hire a tech team to upgrade the system and maintain it. By doing so it significantly brings down the initial cost.

Most importantly, the protection, with cloud-based service, if any incident occurs, the solution providers are responsible for the loss (check the security issue information with your provider) When the crypto-business is on track, you can always recruit an awesome tech team, buy the entire system from the solution provider and do whatever functions and features you want.

There are many providers of crypto-exchange tools out there.

Before choosing one to work with there are several things you need to consider:

First, does this solution provider have great experience in crypto-exchange?

How many clients does it have? Who are those customers? What do those customers do?

Second, does that provider of solution provide the framework I need?

Do they provide a full-set system (Spot-trading, Future-trading, ETF, OTC), what about the liquidity, do they have their own liquidity platform?

As I mentioned above, liquidity is very critical for great user experience, imagine an investor trying to sell 10 BTCs on your platform since your platform was just launched 2 weeks ago and has only 1000 users. The investor could need 2 days to sell the 10 BTC.

But a 10BTC could be processed in less than a second on a more sophisticated platform which is part of user experience.

Also, the performance of the matching engines in the system, architecture are key factors that you need to look into.

The Inevitable Functions Of All Cryptocurrency Exchange Development Service

  • Order Book with Matching Engine
  • Customer Management System
  • Document Management
  • System for KYC/Verification
  • Wallet Management System
  • Admin Console
  • UI/UX Branding
  • Block Confirmation tracking
  • ERC20 compatible

How Espay-X Helps You In White label Cryptocurrency Exchange Development?

At Espay-X, we’ll help you cut through the noise and take the lead with our white label crypto-exchange development services. We leverage our crypto market experience and expertise to provide you with highly secure, feature-rich white label cryptocurrency exchange software tailored to the requirements of your company’s brand, which speeds up time to market and allows you to tap into the crypto market in jno time. The white label exchange platform is combined with microservices architecture so designed to provide the best performance and user experience.

We are also experienced in building a custom crypto exchange from scratch while offering white label crypto-exchange tools. We create a market-ready technology, powered by algorithms that execute your business strategies to help you achieve your business goals and generate measurable business advantages, whether you rely on us for white label solution or the growth of custom cryptocurrency exchange. Here’s what distinguishes us from the majority of our competitors:

  • 100+ Dedicated IT Team
  • Banking Grade Security
  • 10+ Years of Experience
  • Flexible deployment models using containerization –Docker Swarm/Kubernettes
  • Concurrent transactions and high TPS (transaction-per-second)
  • Multi-threaded and non-blocking architecture for extreme performance
  • Crypto Arbitrage Trading
  • Fluid Trading Experience
  • Escrow Management
  • Atomic Swaps Support
  • Custom Smart Contract

In conclusion, selecting a white label exchange provider/crypto exchange solution provider, you need to make sure that they have the market-tested expertise and advanced products, and the tool that could give you a jumpstart.

Nirav Patel is Digital Marketing Professional and Social Media Manager at Espay Exchange. He loves to write on new emerging Technologies changing the world.

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