Cryptocurrency exchange software development
Developing a cryptocurrency exchange is a wonderful business startup, but it's worth remembering that a cryptocurrency exchange is different from a regular or corporate website. It is a trading platform that allows you to exchange, sell and buy digital assets. Like any exchange in general, it operates on a trading mechanism; the correctness and speed of transactions depends on the optimized code. The engine checks placed orders for asset collateral (that is, the availability of funds on the balance sheet), keeps records of orders in the database and generates data for display in a web/mobile application or in a trading terminal.
Types of cryptocurrency exchanges
Centralized cryptocurrency exchanges
The centralized exchange acts as an intermediary for traders. Similar to demanded brokerage companies, such trading platforms offer users a number of widespread services: storing, trading, sending or withdrawing cryptocurrencies. Some exchanges add margin trading and fiat / crypto trading capabilities. Centralized exchanges have an owner; they are responsible for the security of users' funds; such platforms comply with legal regulations and standards.
Peer-to-peer [p2p] exchanges
A peer-to-peer exchange is very similar to the previous option, but it works with the blockchain directly. An additional difference is that there is no point of control. Transactions take place between the users who are directly connected by the exchange. The revenue comes from a percentage commission for the exchange from each transaction.
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Why choose Skyunicorn cryptocurrency exchange developers?
Advanced and efficient blockchain solutions
We keep on top of the industry trends and attend industry-specific conferences with focus on cryptocurrency exchange software development
Process transparency and budget control
We give monthly reporting for the client. We bill hourly and based on the projects we take on
Long-term relationships We build long-term relationships with our customers. We work closely with our clients, from the development stage to the business partnership
Expertise in various blockchain projects and cryptocurrency exchange development
We know how to create crypto wallets, distributed data storage systems and DeFi
Components of cryptocurrency exchange
The trading core is the backbone of the exchange. The trading core forms the order book, combines buy/sell orders, conducts transactions and calculates balances.
A cryptocurrency exchange’s wallet is a background process that is constantly active in the exchange server’s memory. It provides storage of bitcoins (of the operator and traders).
A cryptocurrency exchange should have a user-friendly, intuitive and adaptive interface. The interface should include charts of a user’s exchanges, the ability to place orders, registration and access to the trading account.
The user interface gives users control of liquidity, control of currencies and currency pairs, documents spreads and fees, allows account approval and documents withdrawal and deposits in traditional currencies.
Charts display of all fluctuations of currency pair exchange rates. Usually, so-called Japanese candlesticks and trading volume charts are used for stock exchanges.
Forms for placing buy and sell orders
With forms for placing buy and sell orders, the rates of users waiting for a counter offer are displayed. The user should always see an up-to-date picture.
The trading history is the history of already closed transactions. The user should be able to follow the statistics to predict future market behavior, so this part of trading is very important.
Keep track of the balance
Users can keep track of their balance for each currency with a display of the addresses of all wallets on the exchange. Usually, developers also place deposit and withdrawal forms here.
Cryptocurrency wallets on the exchange
If you are planning to go international, you will have to direct the cryptocurrency exchange development company to connect local payment systems for each country, which multiplies their number.
Key features of cryptocurrency exchange development
Operation of any cryptocurrency exchange includes the following points:
Graphical user interface
Architecture of the server part
Each architecture has pros and cons, and it is important to define your goal before starting to develop a cryptocurrency exchange. As a rule, different models feature a similar operating principle. As of today, the most efficient API for data transfer is in JSON format.
The server part of a cryptocurrency exchange is one of the most important aspects. This is the heart of the entire system, where transactions and calculations are performed by means of the main scripts. When developing the project architecture, the main attention should be paid to this part, while other aspects of the exchange may be of secondary importance.
Graphical user interface
It should be noted that the end user does not really care about ins and outs of coding, which are part of the core development. The user wants to have a convenient and intuitive interface. The user interface is the first thing that catches a user’s eye. At the same time, the growing number of smartphone users forces the website to be compatible with the displays of mobile devices. It may not be necessary to create a mobile app at the very beginning, once you decide to develop cryptocurrency exchange, you will need one eventually for both iOS and Android platforms.
A crypto wallet consists of two parts: a cryptocurrency wallet and a fiat wallet. This allows linking the blockchain to the currency deposit and withdrawal functions.
There are different ways to integrate your wallet with the main banking system. In manual mode, it can offer direct bank transfers, and in automatic mode, you can use Visa or MasterCard services. Money is deposited directly into your bank account.
Liquidity is one of the key aspects of any exchange, including traditional exchanges. The order book shows how popular a stock exchange is. Therefore, a cryptocurrency exchange should show exactly the same order books to display liquidity.
You can choose a liquidity provider or simulate trading activity within the exchange with the help of bots. The first option will increase the cost of business, which will negatively affect customer interests.
A trading engine is the core of your exchange that connects buyers and sellers. The exchange speed and performance is directly dependent on the trading engine. Most p2p cryptocurrency platforms use limit and market orders to ensure high performance.
Some systems allow placing stop-limit and stop-loss orders. These are preferred by experienced traders.
An admin panel is the control center of the exchange. The owner or administrator should have access to all important functions and be able to perform key actions, including user management and wallet and transaction management ( including KYC and AML control). If necessary and depending on the exchange size, you can even delegate roles to other users with limited authority.
Security of cryptocurrency exchange
For any system that deals with a huge amount of funds, security is of paramount importance. Most hackers try using several methods at once to disrupt the ecosystem security.