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Building an exchange would mean you are thoroughly familiar with all of the existing types of exchanges – centralized, decentralized, and peer-to-peer. But what are the steps to starting?
The advent of the internet ushered in a remarkable transition from paper to the digital world. Similarly, blockchain, the underlying technology on which crypto projects are built, is pioneering a necessary shift into digital value transfer and tokenization. Presently worth $2.4 trillion (at the time of writing), the crypto market has experienced a monumental surge in interest, with more people interested in not only learning how to trade but how to start a crypto business.
This unprecedented rise in interest has sparked an exponential increase in the number of crypto-related projects like exchanges or brokerages that enable you to conveniently share crypto assets, regardless of location. Being key stakeholders in the crypto world, these exchange platforms are springing up daily, with more set to be launched in the future. However, the sticking point is the supposed cost of creating an exchange software.
Surprisingly, most experts associate “paying more” with the crypto industry, which in reality, is a myth and with now freely available exchange software it seems anyone can now start a crypto exchange.
Starting an Exchange Platform
In the trillion-dollar crypto space, paying more, especially when it comes to exchange software is a myth. While doing it all yourself with a team of developers may look like the ideal option, way too much for most to handle. The key, however, is to get your hands on an affordable pre-made DIY exchange kit. Opting for the other solutions would mean that you get a system that is hard to operate and even harder to test before acquiring but not so with an open-source DIY exchange kit.
In a study conducted by bitHolla, it is revealed that most entrepreneurs seeking to create crypto exchanges, oftentimes, settle for the centralized model. This is partly because of the ability to generate revenue from this exchange type.
Building an exchange software would mean you are thoroughly familiar with all of the existing types of exchanges – centralized, decentralized, and peer-to-peer. But what are the steps to starting?
The first step to creating a good crypto exchange is carrying out proper market research. Like every other market, due diligence is required and the best place to start is from social media platforms and crypto forums. Your goal should be to:
- Find out if there’s a current demand for a particular type of exchange
- Test the software with your team and get used to the controls
- Work on the regulatory issues in your jurisdiction
Choosing a country to support is vital. With most countries clamping down heavily on crypto transactions regularly as reported by Hedge with Crypto, choosing the right nation to support could either make or mar your efforts.
Complying with legal requirements, especially for a centralized exchange is vital to your survival. You need to understand at an in-depth level the regulatory requirements so that you don’t default. Partnering with a forward-driven company, integrating top-level security protocols, and focusing on a specific target audience will help you achieve your goals.
Since the software is open-source, paying millions for an exchange right now is unacceptable. While there are costs incurred from running an exchange, it would be derived based on your location and supporting countries. Decentralized exchanges [DEX] and open-source exchange DIY solutions are proof that you do not have to spend millions of dollars to own an exchange.
Like always, free is always better. Learning by testing software yourself is key to your growth and as mentioned earlier, paying more for services in the crypto space is a myth.