How to Build a Cryptocurrency Exchange Software: Full Guide

What is a cryptocurrency exchange software?

Money exchange is not a new kid on the block as millions of people travel worldwide and have to use the local currency, using airport-based changers, and that’s how it works with digital funds as well.

To be more precise, it’s like a global marketplace where users are able to buy and sell the cryptocurrency of their choice — from Bitcoin to Tether and Shiba Inu — online, with the usage of mobile or tablet devices. Crypto exchange software development, as our essential theme, is related to this sphere helping companies to build tools that enable such transactions.

With such a notice of this term, let’s reveal what actual solutions you are able to receive across such a building project.

Types of crypto exchange platforms

This standpoint will be dedicated to identification as before kicking the ball off, it’s advisable to be aware of nuances of questioning “How to build a crypto exchange platform?” starting from the type of solution you would like to receive or create.

Further, it will help you to choose the proper model, whether it will be centralized (CEX), decentralized (DEX), peer-to-peer (P2P) or even a hybrid one. Here, we will consider each of them in detail, with advantages and disadvantages, liquidity, security, etc.

You will also be lightly prepared for the section that describes stages of fintech software development with pre-defined end-users’ needs, from intuitive design to enhanced data protection, as well as determined tech challenges that come after compliance and regulations rules.

Let’s set your expectations into the three types of resolutions available through cryptocurrency exchange platform development:

1. Peer-to-peer (P2P) is interconnected with DEX, which we will consider below, and for now P2P is a true match for owners who don’t like brokers’ involvement, prefer to contact another investor or trader and remain anonymous, gaining full control over decisions and financial operations.

   This method is mostly chosen owing to lower fees for transactions, more control, global reach of investors and cryptocurrencies, and enhanced privacy.

2. CEX or centralized, according to Investopedia, are “regulated businesses that facilitate cryptocurrency buying, selling, and trading,” aimed at a wide target audience, from newcomers to traders and investors.

   To put it simply, there is a holder who is responsible for storing and saving the funds that you entrust to their digital organization that has a few risks related to cyber-attacks.

   The notable thing to remember when you build a cryptocurrency exchange platform is that it’s recognizable for its easy-to-use approach and high protection that prevents almost all tech errors and risks. Moreover, platforms like Binance are appreciated worldwide, with millions of visitors and investors who entrust their funds according to the data by Forbes.

3. Decentralized (DEX) is suitable for confident and robust users who are convinced they are capable of carrying out every challenge related to such purchases, so here, you will not meet any middleman as the central authority.

   There are premier functionalities that can be useful for some of the businesses which decide to create a crypto exchange platform, such as automated trading, blockchain-based transaction details, full transparency, and more.

   Are you wondering how it is possible to? — we have considered smart contracts in our previous article, so that this type can be processed via them easily, with an agreement that can’t be ignored or cheated.

   Through our research, we have found that an example of such cooperation is Uniswap, which uses a set of smart contracts.

4. Hybrid (DEX+CEX) refers to the cream-of-the-crop combination that becomes a game changer, offering better UI and speed with a higher risk-mitigation rate. Experienced and proficient cryptocurrency exchange developers know how to implement such a system that will take the best from both parents.

   With core elements from both types, this one has gained demand as blockchain works together with traditional technologies, making a perfect duo if to talk more shortly.

The final choice depends on your needs, which is not a surprise but let us briefly form the core principles: security and terms, liquidity level, compliance with KYC and AML, flexibility so that newcomers can use your program too, and fees charging.

In this part of the material, we have disclosed three kinds of crypto exchange development and there are some more, dedicated to lending as an example, which are not that common but still can be built according to your requirements.

With that being contemplated, let’s move to the point you have come here — the undeniable creation process in detail.

What are the steps of cryptocurrency exchange software development?

The platform market size according to the latest found research is predicted to reach $150.1 billion by 2029, and the reasons are widely represented, from the growth of global usage to economic trends that are rapidly changing. Who wouldn’t like to join the pace and achieve success in a profitable niche?

Therefore, in this part of the material, we will consider the precise stages of building a reliable solution that will take place in your revenue strategy:

— Step 1. Gain a well-rounded perspective.

To put it simply, why are you here, reading this article, on a deep level? What is your motto and purpose? How does such a platform become a game changer for your company? What’s your type of application referring to our previous topic (CEX, DEX, P2P or hybrid)?

It may sound like a lot to do, and it has to be since you are defining if your efforts or white label cryptocurrency exchange software development are worthy. It’s advisable to conduct a well-through-out research on competitors (Coinbase as one of the leaders), regulations you need to apply for, and other nuances.

— Step 2. Decide on the tech side.

This part is also about the question-answer model, where you have to determine the tech stack, for instance, will you use Python or Node.js, a blockchain network that meets your requirements, coding practices, architecture, etc.

This standpoint matters as you are aimed at users’ needs which may include secure transactions, anonymity (still under their control), various integrations and protection concerns.

— Step 3. Design and develop.

Two actions in one phase is a lot, well, it takes the most time since you have to consider UI and UX design to ensure your system is intuitive across charts, trade execution, that it’s available on various devices as not everyone owns the same type of phone or tablet.

When it comes to coding, you are able to make it on your own with required tech proficiency, or collaborate with one of the firms which will handle back-end, front-end, API creation.

— Step 4. Implement compliance.

We have mentioned this moment above, and since you or your crypto exchange developers have finished the previous step, here in detail you need to integrate KYC/AML verifications to prevent fraud, receive a license for financial operations.

— Step 5. Test and go live.

From penetration to feedback from beta end users, it’s better to check everything before posting your solution. Therefore, you are capable of attracting customers with a well-made app, investing in marketing, ongoing support, advanced features, optimization.

What features are needed to create a crypto exchange platform?

The way to remain competitive in the cut-throat industry of crypto is to provide users with solutions that take place in their phones and hearts. It sounds a little poetic but the truth is that there are thousands of such apps and platforms, and by offering a regular off-the-shelf one, you will not go far.

We are here to parse the core functionality trending nowadays, combined with traditional vital elements that can’t be left behind so that you are able to gain scalability, become efficient in cryptocurrency exchange development, prevent budget overrun, and assess functions that can be built within your capabilities.

• Trading is the backbone of why we are here today as your end-users downloaded the application or logged in to the web platform for this, so it’s better to ensure they can accurately experience buying and selling processes, replicate the successful ones, and even make predictions for prices and postpone the deal.

  Your marketplace has to be engaging so that investors feel the need to click on your app again, check the account, make some contracts (where you can implement the ability to trade pairs).

• UI/UX design hits differently when you realize that it’s one of the opportunities to stand out in the market and catch the visitor’s attention since you have milliseconds to do it. “Fast and accessible” answers the target audience according to the surveys we have conducted for our projects, so here are some more standpoints.

  You need to provide 5 options that are part of crypto exchange software development services: an intuitive navigation using which a user will get to the right point without confusions, eye-catching brand elements that also differentiate you in the cut-throat niche, feedback, dark mode, real-time updates.

• Liquidity management stands for stability and user satisfaction as steady prices lead to more convenient tradings but what is the administration? We recommend focusing on what your customers require and implementing cream-of-the-crop practices and strategies, like working with trustworthy external contractors and global-related networks.

  Remember that fast trade leads to more engagement and leads flow, as well as high-volume buyers will be happy about joining your system if you ensure that there’s no space for manipulation across your software.

• Intensified security we have talked about a few times above and will talk further as it’s one of the first demands in the area related to money as people can be scared of daily news about cyber attacks. Your job is to prove that this feature is contemplated within regulations.

  User authentication as a function of such a system has to be powered by 2FA or MFA in the first place, may be conducted with the usage of biometric data stored in the device, additional keywords required for login, or else.

  What refers to your side as a provider or crypto exchange software development company ? It’s about attached coding practices, regular reviews, updates for the whole software.

• Customer feedback is about tools that must be added for 24/7 support from your side, and it has to be more than a standard FAQ since the crypto exchange is a market with no predictions, and providing clients with robust maintenance will keep them longer with you.

  Our advice is to contact coders who are capable of working with AI-powered chatbots, plus ensure to add real people to online chats as not every issue can be solved automatically. It requires an additional workforce yet remains a vital feature.

• Advanced analytics need to be placed alongside intuitive dashboards and reports that, in graphics, show every change that happens to the funds or market. To create a cryptocurrency exchange platform that really matters and will not be just another one posted online, it’s preferable to let your consumers see what happens with their balances in real time.

We have covered the essential ones, common for every type considered above, and the rest can be determined after you get to work with a team of coders, code by yourself or apply for help for creation

The definition of necessary functions will mostly impact the timeframes and final cost of work, so closing this theme, we are moving to the second one, which sometimes feels like a lullaby from the darkness for some companies — the pricing.

How much does crypto exchange software development cost?

We can rely on our experience having a team of cryptocurrency exchange software developers and tell you the average adoption price as your project is distinctive even if you think that you are building one of the thousands of platforms.

Here’s a comparison table that will facilitate the understanding of this tricky question:

There are some more selections, for example, white label crypto exchange software development which can cost you from $30,000 and up to $200,000, pretty cheaper and affordable since it’s a pre-built one which you mostly can’t change and customize fully. You can learn more about the price of crypto wallet development as an example from our material.

What also may add some $ is security nuances since it’s expensive to provide a fully protected application (but ignoring it will cost you reputation), especially for CEX as we have considered in the “types” block.

Trading engine of your choice, blockchain from Ethereum to Solana with various fees, complex functions for margin trading or staking — they all impact the final price in the contract you sign with a provider or a team of crypto exchange software developers. If this one option seems suitable for you, read on to learn more about the vendor-choosing process.

How to select a cryptocurrency exchange software development company?

The decision to collaborate with cryptocurrency exchange development companies requires expanding the knowledge of what makes a perfect match, and we are here to disclose such an extensive discussion and provide you with the following moments:

• Prioritize case studies as nothing talks better than the work done and whether you would like to ensure that the firm can deliver full security, compliance, support, management, tech know-how — it all will be displayed in the portfolio of works.
• Investigate pricing models since it’s better to find the balance between quality and your capabilities plus needs, for example, you want to hire experts to develop cryptocurrency exchange software that will definitely take a long time and a dedicated team is the best-fit option for you.
• Check testimonials across shortlisted vendors (you may be using our list we mentioned above) and make sure the agency is a reliable one. Some of them can post video reviews from CEOs or managers, detailed certified documents with outcomes, and more.

• Access communication style when you decide to hire software developers. It doesn’t seem like a vital factor but imagine that you have no updates through the building process, wondering what the interim results are, without answers from PMS and representatives.

  For the crypto exchange platform development it’s crucial to keep the hand on the pulse of everything done, especially concerning protection and regulatory compliance.

You are ready to plug into the niche and start gaining your pace under the sun, increasing online presence and income sources.

Wrapping up

For now, such a solution will seem a piece of cake type of endeavor as you are armed with vital information about what stands for such software, the nitty-gritty behind functionality that has to be created by you or your developers, and even how the price is set according to various nuances.

Well, that was a lot of information, briefly outlined by our experts who leveraged 10+ years of background and related case studies. The bottom line is that by launching such a platform you are able to gain more income sources and become the leading provider in the crypto industry.

If you would like to kick off the ball and reach out to an experienced company offering cryptocurrency exchange software development services, contact Limeup to receive comprehensive support at every stage of cooperation. Schedule a complimentary call, and we will call or message you back.