How do P2P Escrow Services of Crypto Exchange Protect Users from Scammers?

Peer-to-Peer or P2P trading is one of the oldest ways to trade cryptocurrencies. Basically, a P2P exchange supports the direct buying and selling of digital assets between the users. The trade does not involve any third party. The global P2P volume topped the charts during the bitcoin bull run of 2017. During this time, P2P crypto exchange development also peaked. Since then, the weekly P2P trade volume has stabilized around $80 million.

P2P trading became popular because it gives traders more control over the pricing, settlement time, and settlement type. This kind of control is not possible over a centralized exchange. With the traders moving to P2P exchanges, the leading exchanges like Binance also ventured into the P2P space.

P2P crypto exchange development offered crypto traders a plethora of advantages, including the following:
• Global Marketplace
• Multiple payment methods
• Very low trading fees

However, there are some disadvantages too, such as:
• Sometimes the trading speed is slow
• Liquidity could be a challenge
• Frauds can happen

How can exchange operators overcome these challenges?

• Faster Trading Engines
The new generation of P2P exchanges uses faster trading engines that help counterparties to find each other quickly and easily. Once the two are connected, they can quickly settle the trades.

• Liquidity issues
Compared to centralized exchanges, P2P exchanges have lesser liquidity. However, there are some methods by which the challenge can be addressed to a certain extent:

1. Listing more types of crypto assets
2. Adding multiple payment forms to attract more traders
3. Have access to multiple order books
• Escrow to prevent P2P frauds:

P2P crypto exchange development companies integrated escrows to prevent frauds on the exchanges. An escrow is basically a provision that ensures as soon as a buyer places an order, the seller’s assets are automatically transferred to a temporary deposit account.

These funds are held as a guarantee until both the buyer and the seller confirm that the trade has been completed.

In case the buyer fails the trade, the escrow service returns the assets to the seller when the negotiation time of the trader is over. The best P2P exchange development company ensures that the buyer’s and seller’s rights are protected using the escrow provision. In case the buyer made the payment and the seller failed to release the assets, the buyer can open an appeal with the P2P exchange. However, the exchange would ask the buyer to provide proof of payment.

Once the exchange operator confirms that the buyer’s payment was processed to the seller, the seller’s assets in the escrow account are transferred to the buyer’s account. Thus, the escrow provision ensures both buyers and sellers can trade in a risk-free manner.

What are the new features that are making noise in P2P trading?

Zero Fee Ad posting:
One of the features that is becoming increasingly popular with P2P users is that a buy/sell advertisement can be posted with zero fees. Along with that, the users can share the ads on their social media handles also.

Cash-in-Person Trades:
The P2P exchange can help counterparties connect with each other and then they can choose the method of making payments. The P2P exchanges allow traders to meet offline and trade their assets in cash.

Reputation management:
This feature allows buyers and sellers to rate their trading experiences. When a user rates the trading experience with the counterparty, this helps in confidence-building of other traders.

End Notes

The features of a P2P crypto exchange can be enhanced by partnering with the right P2P crypto exchange development company. At Antier, we help exchange operators by building a feature-rich P2P cryptocurrency exchange where the security is hardened, and the UI is designed to be highly intuitive.

We offer white label P2P crypto exchange fortified with market-leading features, and at the same time, we specialize in building custom crypto exchange platforms from scratch.

Schedule a free demo of our white label P2P exchange or connect with our subject matter experts to share your needs for custom P2P crypto exchange development.