This article will discuss a workflow that one should follow when building a cryptocurrency exchange (primarily crypto to fiat). Security and safety is the most important concern for such a service. It is important to provide security features that will protect your service. For creating a market, there should be pre-loaded bitcoin, bitcoin cash, and Litecoin coins.
What is The Working Principle Of Crypto Exchange Software?
A crypto exchange software allows people to trade cryptocurrencies such as Ether and Bitcoin. softwares is not a player in the bitcoin market. Instead, they facilitate the selling and buying of cryptocurrencies and/or the exchange of digital coins for fiat currencies (USD or EUR etc.). And vice versa.
Different crypto exchanges offer different features. While some exchanges allow users to trade, others provide transparent and open trading data via the order book. These exchanges offer advanced functionality, such as the ability to set a price for orders. Decide how much data you are willing to share before you start a cryptocurrency exchange software.
Next, decide on the scalability level your platform needs. On a crypto exchange platform, data communication can be configured in three different ways.
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Asynchronous –In this case, the requests and responses are sent independently thanks to message broker technologies like Kafka, which act as mediators. For each functionality of a crypto trading platform, various services may be offered thanks to asynchronous inter-service communication. This allows for greater platform stability and the processing of more data. As they can handle larger trading volumes, asynchronous platforms are more scalable.
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Distributed- This type of exchange uses a group of services to split customer requests into separate processes. Your cryptocurrency platform can process a lot of data with this kind of architecture without sacrificing stability. It employs cloud technology as well because it has a distributed platform architecture, which enables limitless growth.
Types of Cryptocurrency Exchanges
Next, you need to decide what type of crypto exchange you want to offer. This will help you get a better idea of your final product and define the platform's key characteristics. There are four main types of cryptocurrency exchanges, .
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Centralized- Security, functionality, and updates are handled by a centralized operator. This kind of exchange controls order books, which maintain coin storage and keep track of all transactions. One drawback of centralized exchanges is the ease with which money might be lost in the case of a hack. If you decide to use this form of trade, security is essential. As soon as your crypto exchange MVP is developed, we advise using our Security Ninja service to do in-depth security assessments.
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Directly transfers funds between wallets- The platform does not store cryptocurrency, so cyber attacks are less likely. However, users are responsible for any errors due to the absence of a third party moderating decentralized exchanges.
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Peer-to-peer (P2P)- Users can directly trade cryptocurrencies or exchange their coins for fiat money through P2P exchanges. A trader can make offers, to which other participants will reply and haggle over the terms. It resembles a bulletin board a lot. If you're creating a P2P crypto exchange, security should be your top priority. The $40 million loss suffered by Binance in a phishing scam in 2019 is well known.
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Instant– These easy-to-use exchanges provide instant cryptocurrency exchanges. Trades can be executed immediately as instant exchanges aggregate liquidity and offers. You should make sure that your instant cryptocurrency exchange is ready for high-load days if you plan to create one.
Apart from the four major types of cryptocurrency exchanges, hybrid platforms like Mt. Gox, BitFloor, and Poloniex are the main types of crypto exchanges. The anonymity and security of decentralized platforms are combined with the liquidity and usability of centralized ones in these exchanges.
Users who use hybrid exchanges can preserve full custody of their money and are not required to provide it to outside companies. Tokens are maintained in dependable smart contracts, whilst users can access digital assets intended for trade from their wallets. Hybrid cryptocurrency exchanges, according to many analysts, are where cryptocurrency trading is headed.
The key features of a Cryptocurrency Exchange Platform
You must carefully consider the intended functionality of the cryptocurrency exchange platform you are creating. Although the advanced features you add and subtract depend on the type of cryptocurrency exchange platform, there are some core features that all cryptocurrency exchanges share.
Let's look at an example to show you the standard user flow:
User:
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Registers in the cryptocurrency exchange system indicate their choice of cryptocurrencies.
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Verifies account in accordance with Anti-Money Laundering and Know Your Customer standards.
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The account must be funded.
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Enter the volume and value of the cryptocurrency you wish to exchange.
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If there is a counter offer on the site, you can close a deal.
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The funds are withdrawn to the credit card or an in-app cryptocurrency wallet.
It is clear from the user flow that cryptocurrency exchange platforms should have the following:
User authorization and verification - User authorization is the first stage in the onboarding process. It should be easy to understand and uncomplicated. Users, however, want reliability from their trading partners and will go to any lengths to satisfy them. Because of this, verification is crucial. Verification is necessary to provide transaction transparency, lower the risk of fraud, and demonstrate that your bitcoin exchange complies with global standards. Experience with errna has proven that all users should have two-factor authentication (commonly known as 2FA) activated. Verifying IDs and pictures is advised.
The user interface - This is the face of your exchange platform. It should be simple, clear and easy to use. An easy-to-use interface will guarantee that transactions are carried out quickly and cut down on trading time. You should have easy access to statistics, order management, order history, and fund withdrawals.
Trade engine This is the heart of your platform. The trade engine connects and finds traders. The trade engine's performance and speed are also affected by its quality. Customers will appreciate faster service. To manage their investments effectively, users must have real-time access to their trading data.
Your trading engine should be developed with a lot of work. You can accomplish this goal by integrating blockchain technology. It not only increases the speed of your trading engine but also ensures complete security and transparency. Hire an experienced SaaS or blockchain development team like errna to do this job.
Wallet- Allow your users to use e-wallets for digital money storage and transfer. It is a smart idea to offer two types of wallets, hot and cold. Hot wallets enable users to withdraw money and transfer money into their accounts. Because they aren't connected to the internet, cold wallets can be used as a backup and protected against fraud.
Order book and transaction history - An or book is a list that contains open orders. It allows you to view the current bids. Users can track their transactions with transaction history. This provides a summary of all trades completed with transaction information, such as the trade rate or time.
Analytical tools– Essential if you are looking to create a cryptocurrency website or app. Users can access real-time information and other market trends. A whole range of indicators are available to help traders plan their strategies, including Relative Strength Index(RS I), Moving Average Convergence Divergence and Bollinger Bands (BB).
Push Notifications- The ideal way to tell your users about price changes, volatility patterns, news, and platform updates is through this. Exchange listings can be followed via notifications. It should be possible for users to choose which alerts they want to receive. Setting up push alerts is easy, quick, and affordable. Push alerts are more affordable than chatbots and other automated marketing tools. However, pricing can vary.
How to Create Crypto-Exchange? (All Development Process)
Seven steps to create a crypto exchange. Let's now move to the fun part: how to create a cryptocurrency exchange.
Develop and Describe Your Idea
We have already said that you must be clear about the product you are trying to create. It is important to describe your viable product idea in the early stages of developing a product. Your future team will benefit from more detail.
Legalities and Project Registration
Next, register your project at the legal level. Your product must comply with all applicable laws and regulations in your country. This is a very important step. A single mistake could cost you dearly.
Marketing Research and Product Discovery
We often get involved in this stage of projects when we are working on them. This step involves conducting a marketing analysis.
Additionally, product discovery must be made. To find a product/market fit and test the business model with a real product, product discovery is crucial. By lowering risks and validating product solutions, value propositions, value hypotheses, acquisition channels, and business goals, this is made achievable.
UX Design: Content hierarchy and navigation
UX design for a crypto exchange refers to the creation of a product that offers users a meaningful and relevant experience. This involves analyzing customer information, organizing it, and then arranging it in a way that allows the user to quickly find what they need.
UX design aims to make digital products that users feel at ease with. This includes the way the product functions and how the user uses it. The most important thing is that this all helps the user solve their problem.
The design must also be in line with business logic and technical specifications. These are the common steps in the UX design process:
1. Product Definition
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Stakeholder interviews.
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Value proposition mapping.
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Concept Sketching.
2. Research
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In-depth interviews with individuals.
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Competitive Research.
3. Analyze
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Creating user personas.
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Creating user stories.
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Storyboarding.
4. Design
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Sketching.
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Creating wireframes.
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Prototype Creation.
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Creating a design specification.
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Creating design systems.
5. Validation
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Test sessions.
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Surveys.
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Analytics.
This is how we created the UX design of our partner:
Product Testing
Once the UX design has been completed, it is time to test it. This stage will help you understand if you have correctly built the product logic, if it is easy for users to find everything in the product, if everything suits them, and so forth.
You will be able to see the results of the UX test and decide if you should make any changes.
Northell uses its UX Laboratory in-house, which analyzes how users interact with the interface to uncover product usability gaps.
UX Eye Tracker is a tool that analyzes user behavior while using the product. This method is only used by 1% of companies.
UI Design: UI guidelines and visual elements
UI design refers to the visualization of a prototype after it has been developed based on user experience and research about target audiences. UI design involves the creation of graphics, such as animations, illustrations, buttons and menus, slideshows, photos and fonts.
UI design determines how the product interface looks and how users interact with it. It is important to organize interface elements in a consistent way and keep their interactions simple. Your primary task is to make the product easy to use and understand for the user. You must ensure that the interface meets all the requirements.
Start Crypto Exchange Development Lifecycle
You now need to turn the design into a product. The entire development process was broken down into several steps. Let's take a closer view of each one.
Technical Documentation
This stage collects all relevant information about the client to create a product that meets their expectations. The technical documentation should be written by the team and chosen technical stacks.
The team should define the functionality requirements (requirements to access the admin panel) as well as user roles (super admin and admin). The scope and estimate should be completed by the team.
Front-end Development
To write the code for the various components of the platform, developers use the architecture and documentation from the previous steps. Angular, Vue.js and React.js are the main tech stacks that can be used during crypto exchange front-end design.
Crypto exchange Back-End Development
Server-side development can also be called backend development.
It includes everything that users don't see and all the actions that happen behind the scenes as they execute any platform operation. It is primarily focused on servers, backend logic, APIs and databases. Node.js is the most popular tech stack for crypto exchange backend development.
Blockchain Development
Blockchain developers are currently working to create a blockchain network and a decentralized app for it.
Blockchain development includes:
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creating decentralized apps, consensus systems, and blockchain networks;
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The creation, testing, oversight, and upkeep of a blockchain network with an emphasis on its speed, distributed computing capabilities, and consensus protocols.
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Decentralized applications, smart contracts, backend systems and client-side apps can be developed, tested, monitored, and maintained.
QA
QA engineers perform manual testing on developed components and test all code delivered. The main QA areas to be used are CI/CD and integrational, automation strategy and regression.
Deployment and Integration
The QA team completes regression testing and development. After that, the team moves to production deployment. Beta testing is conducted on the finalized product. The team gathers feedback from users, fixes any bugs and makes some improvements.
Maintenance
The development teams maintain the product's upkeep after it has been deployed in production. They will address any problems that may arise and keep the platform updated as necessary.
User feedback analysis
Next, gather feedback from users about your crypto-exchange platform. To find out the answers to these questions, take the survey:
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Is it easy to use your cryptocurrency exchange platform?
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Are there any issues with the product?
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To what extent can a cryptocurrency exchange platform meet the needs of users in this regard?
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What improvements would you like to see in the product?
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What are the user's expectations of the product?
These questions will help you determine what to do to modify, remove, or add to your product.
Improve and Develop
You don't have to stop at the creation of your product. You should keep improving and developing your product after you have analyzed user feedback. You must remember that progress is key to success.
Read More: A Comprehensive Guide to Build a Cryptocurrency Exchange Software
What You Need to Have for Your Crypto Exchange in 2023
How can you make a cryptocurrency exchange that is in demand? You can do it! Fill it with all the functionality you need. Here is a list of essential features that you must have for your crypto exchange by 2023. Let's take a closer look at each one:
Personal account
A personal account is what makes a crypto exchange work. Users can store all their personal data and start using the platform right from there. Your account shouldn't be too difficult to use. Personal accounts should only contain the essential elements that users need to perform the required actions quickly and easily.
Onboarding at the platform
Users need to be able to quickly learn how the platform works, what sections they need, and what steps to take to reach their goals. It is essential for improving the user experience.
Basic security settings
Your crypto exchange will have a lot of users' personal information and money. It is important to keep the platform safe. Your platform will require a security system to prevent money and data leakage.
Crypto-wallet
To be able to use cryptocurrency to transact, users must store it somewhere. You will need to create a crypto wallet that allows users to store and sort cryptocurrency.
Notification
Include a notification tool to make sure users don't miss crucial information on the platform. Additionally, you can disable notifications. However, most of the time, these platforms enable users to actively use this feature to track things like the current Bitcoin exchange rates.
Chatbot Support
This feature is necessary to provide quick and easy support. Chatbot support allows users to quickly resolve any urgent issues or problems.
Integration with bank card
The platform must be able to connect bank cards to allow users to exchange money for cryptocurrency. This feature is essential for the platform's operation.
History of transactions and interactions
To allow users to control the movement and movements of their money and cryptos, you can add a history of transactions to your crypto exchange platform.
Rating system and feedback system
As the owner of a cryptocurrency exchange, this feature is even more important. This feature allows users to rate and give feedback on the platform.
Trading engine
Your cryptocurrency exchange's trading engine is it's(errna) beating heart. All trading logic is stored here. An order matching engine that contrasts buyers' offers and sellers' requests would typically be part of this.
Dashboard showing current operations
A dashboard is the best place to store all of the important information regarding users' operations, especially if it is in the form of charts or tables.
Configurations and filters
Your users can customize the search engine or platform to meet their specific needs.
Referral Program
This feature is very popular with many FinTech products. This feature allows users to get bonuses such as referrals to the platform.
Conclusion
These points should be considered when creating a workflow to build cryptocurrency exchange software. This document outlines the basic workflow required to create a cryptocurrency exchange platform development.
