Cryptocurrency has now become a new asset class, especially when we consider the rapid rise in its value earlier this year. As per a recent report by Fortune Business Insights, the worldwide cryptocurrency market is projected to reach USD 1,758.0 million by 2027, from USD 754.0 million in 2019.
These trends indicate that there is a good chance for cryptocurrencies to go mainstream worldwide. As more people are drawn towards crypto, it is essential to have efficient crypto exchanges to meet their trading needs. In this article, we’ll see how you can launch a crypto currency exchange using white label solutions. Before discussing about the importance of white label solutions in the crypto space, let’s brush up on the basics –
A cryptocurrency exchange is a platform that allows users to buy/sell or trade different cryptocurrencies. It is similar to a stock exchange, but instead of stocks, you buy or sell crypto assets. The exchange platform enables traders to do fiat-to-crypto currency transactions and cryptocurrency-to-cryptocurrency transactions.
Based on the nature of its operations, crypto exchanges can be classified into broadly three categories. They are,
This cryptocurrency exchange platform will be managed by a centralized entity, for example, an individual company. This company will have total control over all the transactions taking place on the platform. For example, Binance is a centralized crypto exchange.
As the name indicates, this type of crypto exchange is an alternative to centralized exchanges. Here the transactions are controlled by automated processes, not a centralized manner. No central authority has control in a DEX and it is based on a peer-to-peer model. For example, Binance DEX is a decentralized exchange launched by Binance, that is completely autonomous.
This type of cryptocurrency exchange is a combination of centralized and decentralized exchanges, taking the best from both. It has the low latency and fast transaction speeds of centralized platforms without a central figure like that in decentralized exchanges. It offers better security for your information. The upsurge in the number of cryptocurrency users has led to an increase in the number of cryptocurrency platforms. Many businesses have even started their cryptocurrency exchange platforms. Joyso, TRON Joyso are examples for hybrid exchanges.
If you are planning to launch a crypto exchange, you have two options in front of you. One is to build the exchange platform from the scratch. The second is to use a Whitelabel solution.
Building a platform directly from scratch is difficult and involves a lot of risks. Likewise, by spending more money, you will have to wait for a long time for the execution to take place. The development of exchange generally takes 8 to 12 months. But the risks pay off in many cases and when you have the funds to build the product, it becomes a game-changer.
Also, when you are building on your own, you can decide what you will want in the setup. The business will work just how you have imagined it. If you do not have enough funds, developing a cryptocurrency exchange from scratch will be a risky venture to try.
White label cryptocurrency exchanges can help you start your business much faster. You will be able to have your business up and running in just a few weeks. White label solutions are cheaper options and thus the smartest way to start a decentralized cryptocurrency exchange platform.
Developing a crypto exchange from scratch would take at least 6-12 months. And for an exchange with advanced features, trading options and security measures, it would take 18-24 months. A Whitelabel crypto exchange solution enables you to launch your cryptocurrency exchange in a matter of days. It can help you save a lot of time, energy and money.
For example, Coinfactory’s Whitelabel crypto exchange solution is a turnkey crypto exchange platform built with state of the art technologies and audited by multiple security agencies. It is already successfully used by several crypto exchanges in the market.
For launching a cryptocurrency exchange using a white label solution, you need to understand the pros and cons of having a white label cryptocurrency exchange.
Once you decide on the software vendor, you will be all set to launch your white label cryptocurrency exchange within a span of a few weeks. All of the security features and customer support will be provided by the vendor. This means you can focus on more important things, other than handling the headache of developing and deploying the cryptocurrency exchange.
Now, let’s consider the various benefits of using white label solutions in building cryptocurrency exchanges. First of all, it eliminates the endless hours of putting together software and saves money. The white label solution allows businesses to focus only on the essential products and it helps in giving more time towards running and growing the business.
The best feature of a white label solution is the security that comes with it. White label cryptocurrency exchange comes with anti-phishing features, two way authentication, and advanced data encryption. and these platforms can be deployed within a matter of days.
White label products have been in the market for decades. Besides, many of the startups will love the possibility of white labeling their products with other companies. This is a question you must ask yourself before moving ahead:
The white label cryptocurrency exchange market is growing rapidly since it is a ready-made platform. Make sure to do extensive research if you are starting from scratch. Check out your competitors and find out their value in the market. And check out the price in the market as well.
The traditional markets do not provide the exit strategies like white labeling. White label licensing helps you to find the right label partner and the business pays a good amount as well. It also goes on without the investment that is generally required investment to sustain a start-up organization. White labeling is not for all kinds of businesses, so be sure to check if it provides a good exit strategy to your business or not.
Check out the sales cycle as a white label cryptocurrency exchange is a B2B product source. The potential buyer will have no obligation to purchase a white label if it made you jump through expensive hoops to demonstrate the greatness of it.
While looking for a white label cryptocurrency solution, make sure it comes with the following solutions:
In order to boost your user engagement, make sure you are able to carry out high-level transactions every minute, in a faster way.
Implementing a multi-currency payment gateway or wallet can help in ensuring each cryptocurrency exchange token has a different wallet address to deposit and withdraw funds.
Make sure that all KYC and AML norms are set and allow users to exchange only if these details are filled properly. This can support you in Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) efforts.
This will give cryptocurrency traders a clear idea about the past and present token price, enabling them to do a predictive analysis on the future price.
This enables efficient transactions, unaffected by the price fluctuations in the market.
Since you are doing crypto and fiat currency transactions, make sure there are strong security features like multi-security encryptions in addition to blockchain technology security measures.
Some of the major steps involved in the development of a white label cryptocurrency exchange are listed as follows-
The first thing is deciding on the exchange in which you will be willing to do the business. It must be a platform for all the opportunities to come together.
After choosing the exchange, the next step is completing all the legal formalities. The rules and regulations vary from place to place. So be sure of the legal formalities you must satisfy.
A banking partner is necessary for completing the finances in fiat currency. Likewise, select a trustworthy bank that provides adequate digital services to help the business.
Liquidity must feature to create a white label cryptocurrency exchange. Join a network that helps in improving liquidity.
Firstly, do the Beta testing and then go online. Further, Beta testing helps to bring all the flaws out that have occurred while developing the software.
There should be an active customer support team to help the customers in times of need. With constant development, the support team will also grow.
With more and more crypto fans joining the crypto space, businesses are looking forward to launching their own cryptocurrency exchanges. But developing it from scratch can be challenging in terms of cost, time for deployment and the effort needed for it.
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That’s where launching cryptocurrency exchanges using white label solutions come to the rescue. With this, you can build and deploy fast, secure and customizable cryptocurrency exchanges, with comparatively low cost. This way you can make the best of crypto growth possibilities, which can take your cryptocurrency trading business to a whole new level.