29 November 2023
Cryptocurrency has created its own digital currency world, the space has over 5000 cryptocurrencies and one such space that the investors are intrigued to be a part of is to start a crypto exchange. Few of the most popular crypto exchanges like Coinbase, Binance, Coinmama, Bittrex, Gemini, Kraken and many such more have been successful in marking its territory in the crypto world with millions of users on its platforms.
Binance in 2019 and hit a flying high cumulative profit of approximately $1 billion, while there are many such exchanges that aim to fly high to make profits and who is to say that your crypto exchange wouldn’t be the one?
In this blog, we are going to discuss the 10 important guidelines to start a crypto exchange in 2020:
1. Identifying your exchange
Initiating the process with understanding and aiming towards what exactly you want your crypto exchange to be identified, is important as it will form a base to your crypto exchange journey.
The type of crypto exchanges platforms are:
- Decentralized Exchange: It is a platform that would facilitate exchange without any intermediaries - a decentralized network.
- Centralized Exchange: It is a platform that would facilitate exchange involving intermediaries such as middlemen or 3rd parties.
- P2P Exchange: It is a platform that would facilitate exchange directly connecting the seller and the buyer without intermediaries and is usually driven by smart contract that are based on the escrow system.
2. Choosing your working path
Once you have decided on identifying the crypto exchange you would want to form your platform based on, it is thus time to start the working process by choosing whether you want to build a crypto exchange from scratch or utilize the white label crypto exchange software. A white label crypto exchange involves a crypto exchange development company that facilitates customizable solutions for your platform. It also benefits you with deployment, reliability, cost-efficiency, technical expertise and ofcourse customization!
3. Market Research
A project should always be backed by rigorous and extensive R&D - and many such factors are in-detailed market research consisting of knowing and learning about the already existing crypto exchange platforms, knowledge about cryptocurrency, blockchain and everything-related, market prices, trends, news, basically everything and anything that relates to cryptocurrency and blockchain technology.
4. The Feature Factor
To establish a crypto exchange, the features of your platform would create a face value in generating revenue, opportunities and users. You could also learn about the features that various other crypto exchange platforms provide and create pointers of your own, learn about what traders and users seek in a cryptocurrency exchange, ultimately we are back to the 3rd point that states - R&D playing a key role.
The features that are a must to add are:
- Easy to understand and learn interface
- Liquidity options
- Leverage trading
- KYC/AML verification
- Robust matching engine
- Integrating crypto wallet security
- Bot integration
- Fund investment
- Referral programs
- Market making
- Support section
- Multi-cryptocurrency support
- Multi-language support
- Security practices
- Client-side development
5. Identifying the Location for the launch of your Crypto Exchange
Identifying to choose where you want to do business would help create the user-base. It involves studying the regulatory framework of the country, government regulations and laws of the country, whether the users are already familiar with the industry, people who would turn into users, learning about the traders, investors and users statistics, and the existing crypto exchanges in the country. This place is going to be the headquarter of your crypto exchange platform, thus choose it wisely.
Many such crypto-friendly countries are:
- Hong Kong
6. Hiring legal counselors team
Regulations change and vary from country to country, and sometimes no matter how much rigorous R&D you conduct, there is a possible chance to miss out on something which could be crucial especially if you are not from the legal background. Hence, it is advisable to hire a team of legal counselors that would study the regulations adhering to your business and help you to make well-informed decisions.
Also Read, Evolutionary Regulations of Cryptocurrency
7. The Cost Budget
Planning and executing your business as per the budget is needed if you want to hire crypto exchange development companies, legal team, and many such required teams, also the various factors like the technology of your exchange, integration, the infrastructure of your exchange, maintenance and every such thing. Also estimating the needs in the present and the future of your business would help establish a budget and one must have the required funds to take care of everything mentioned and that may arise.
A white label crypto exchange is comparatively cost-efficient than building a crypto exchange from scratch.
8. Crypto Exchange Development Company
The factors that could look for from the crypto exchange development company are:
- C-suite executives
- Blockchain designers and developers
- Blockchain analysts
- Subject-matter experts
- Cryptocurrency and blockchain experts
- Marketing experts
- Financial advisors
9. Target Audience
When you start a business you want to generate revenue for that you need to gain traction and users. Thus, strategising and choosing the correct method to target your audience plays the role. You could even hire a marketing team to help hype your business.
However, we have also stated a few marketing strategies to help promote your crypto exchange:
- Digital Marketing
- Social Media Marketing
- SEO - Search Engine Optimization
- PPC - Pay Per Click
- Email Marketing
- Content Marketing
- Reputation Management
- Forums and News
- Bounty Programs
10. 24*7 Support
A customer stays when the company also shows loyalty and helps in resolving queries and issues at any given point of time. Thus, creating a 24*7 support section is very important for your crypto exchange.
To sum up with - “Rome wasn’t built in a day”. To build a crypto exchange would require a meticulous amount of work and dedication to reach the popularity and trusted base that the above-mentioned cryptocurrency exchanges have created.