Digital asset trading is becoming more and more popular every day. Nowadays, cryptocurrencies are no longer something exotic. Many companies freely accept them as a means of payment. In addition, investments in digital assets can generate significant returns. Trading on a cryptocurrency exchange can be much more profitable than on traditional financial platforms.
All this contributes to the rapid development of business related to the exchange of digital assets. Now is the most convenient time to take advantage of the situation and open your own cryptocurrency exchange. In this article, you can see step-by-step instructions for solving this problem.
What is a crypto exchange?
In short, it is a marketplace where users can buy, sell and exchange one digital for another (or fiat). The exchange acts as a guarantor that all transactions will be executed in accordance with applicable rules.
The development of the cryptocurrency industry has led to the emergence of a variety of platforms:
- Altcoin or bitcoin exchanges. On such sites, they trade exclusively digital assets, without the participation of fiat currencies.
- Exchanges with the ability to convert to fiat. They have the ability to exchange electronic assets for traditional currencies.
- CEX (centralized exchanges). These are companies working with an official license. Therefore, they are subject to the standard trading rules. Such sites are subject to the requirements of the financial market regulators.
- DEX (decentralized exchanges). Platforms that form P2P markets. At the same time, they are not intermediaries, do not store users’ money, and are not subject to regulation by any structures. On such exchanges, users anonymously perform exchange transactions through the distribution register.
- Margin trading platforms. The main difference is providing traders with leverage to trade digital assets.
Keep in mind that some platforms can simultaneously fall into several categories listed above.
Instructions for creating a crypto exchange
To open a cryptocurrency exchange, you need to solve a lot of problems. The most important ones are as follows:
- Obtaining a license and other legal aspects.
- Finding investments for doing business.
- Connection to a liquidity provider.
- Selection of payment processing.
- Providing protection against hacker attacks.
- Beta testing of the marketplace.
How to make money?
First, you need to determine the way to monetize:
- The easiest way to make money is through trading commissions, like on a regular exchange where the dollar is traded against the euro (in the case of cryptocurrencies, for example, Bitcoin can be traded against Litecoin). You can take a commission for each operation: it can be up to 0.5%.
- The second way is to take money from owners of coins or tokens for listing. Many Chinese cryptocurrency exchanges did not take commission for a long time, but earned by listing tokens, as well as by reselling leverage (margin trading).
How to promote an exchange?
First you need to announce its opening, inform users about what conditions you provide, what cryptocurrencies will be traded on it. It also adds points if the exchange has a legal entity, the trust of users from this immediately increases to the new site.
You can ask users to test the exchange. First visitors will have a negative reaction anyway: new platforms often have bugs. The danger is that frustrated users may not return. When you honestly ask people to help, they feel a sense of belonging.
New tokens as a way to attract
Another easy way to promote the exchange is to add popular or new coins. In this case, the development will depend on how interested users are in them. One example of a rapidly growing cryptocurrency is Monero.
If you have a good development team that can add a new token in a few hours, this is an advantage over large exchanges: it is simply not profitable for them.
You just have to follow the market changes: if someone went to the ICO and raised $ 10 million, they need to be added to your platform faster than others. The task of the new exchange is to keep track of all new projects.
You can get to know the owners of tokens who are just going to the ICO, make friends with them and agree that they will first put the new product on your exchange.
You need to understand what people want: some need interactive charts, others come to chat in chats, some are interested in new assets. On the example of our clients, we see that it is possible to promote a cryptocurrency exchange in just six months.