What Is A Cryptocurrency Exchange?
Cryptocurrency exchanges are like the stock market. but for cryptocurrencies. Buyers and sellers are offered a platform on which to trade different assets valued based on current market prices. Typically, exchanges offer classic fiat-to- crypto currency transactions, but also crypto-to-cryptocurrency transactions. For example, on the South African currency exchange Coindirect , a customer can buy bitcoin with South African rand or euros or they can exchange their bitcoin for Ripple's XRP.
What Are The Requirements That Cryptocurrency Exchanges Must Meet?
- In order to exist and function, a cryptocurrency exchange must comply with certain laws.
- Two of these are important in most countries:
- anti-money laundering (AML) laws; Y
Know your customer (KYC) laws KYC laws must ensure that a platform such as a foreign exchange knows who they are dealing with, in order to protect existing customers, the Blockchain Development Company business, and the integrity of a business transaction. This is similar to the credit rating that banks use to trust an individual because they have built up credibility.
To regulate this, most exchanges ask traders and users to link their account on the platform with their personal bank account. Second, it also helps verify a person's identity and credibility.
Set up a cryptocurrency exchange
- Setting up your exchange sounds like a lot of work, but these days, trading platforms can be launched in minutes as companies and individuals have ready-made software solutions.
- DIY exchange kits are now free for those with technical skills or pre-made cloud solutions that don't need help
- Launching a cryptocurrency exchange today is also an ideal way to capitalize on tomorrow's multi-billion dollar industry. Crypto billionaires like Sam bank man-Fried and Brian Armstrong have built their fortunes on exchanges, and more are sure to follow in their footsteps.
- White label solutions for cryptocurrency exchanges help businesses enter the blockchain and digital asset space, giving them an efficient way to set up platforms with fine-grained control.
- One example is the company bitHolla, which launched the HollaEx Kit, an open-source platform with a set of protocols described as “exchange infrastructure in a box.” It aims to be a one-stop shop where users can set up exchange domain names, digital assets and fee structures.
- "Exchange Infrastructure in a Box" - Screenshot from YouTube video about cryptocurrency exchange software HollaEX
- AlphaPoint is another option. It has a closed-source platform that touts "guaranteed availability of liquidity" and a long list of potential system integrations.
- Last year, it was ranked 34th on the Financial Times' list of America's fastest-growing companies. It provides the backend for various Southeast Asian and Latin American exchanges, including an innovative project to tokenize real estate. It facilitates an exchange that expands beyond spot trading in financial products such as derivatives, options and ETFs.
- chain UP is one of countless "Made in China" factory manufacturing software providers that can provide local branches for specific target markets
It comes down to whether it is more cost-effective to build an exchange or use existing CEXs and DEXs.
The price of a white label exchange solution may vary depending on the specifics of the business you are trying to build. Some estimate the budget to be around $20,000, but due to the cost of the technology, this figure could easily exceed $100,000.
One exception is HollaEx, which allows you to try its feature-rich toolkit for free until you're ready to launch your marketplace, and it's also available for free download on GitHub.
It is also important that exchange solutions adapt to the evolving DeFi environment. For example, the HollaEx network uses its native token $XHT to operate its exchange and activate new tokens and markets and allow staking.
Every exchange built with HollaEx Kit will have a $XHT/$USDT market and a built-in staking interface featuring $XHT. Building exchanges using these toolkits may be more cost-effective in the long run.
You can skip the expensive process of forming a development team because the platform is suitable for non-developers and users with no technical background. Integrated security and technical support provide further cost savings.