As the cryptocurrency mining process is getting more difficult and less profitable day by day, people are shifting to crypto exchange development. A very famous crypto exchange: Binance has recently registered 66% of profit increase in Q1 of 2019. Such cases encourage traders and investors to step into the booming world of Cryptocurrency.
A cryptocurrency exchange is built with an aim to provide convenient, dependable and secure access to the digital currency and that’s what user looks for. A user looks for factors like exchange’s fees, reputation, security, verification processes, and geographical services and then decides whether to use it or not.
This is the key to your exchange’s success. You cannot generate revenue by just building an exchange you have to provide features that your customers need. User expectation and revenue generation are directly proportional to each other, more the user expectations are fulfilled, more users will use your exchange and more will be the revenue generated.
How investors can earn profit from Cryptocurrency exchanges?
Crypto exchanges if developed properly can yield huge profits. The benefits of these exchanges are countless. You can reap those benefits in the following ways:
- Trading fee: A certain amount of fees is charged as a commission whenever traders perform a transaction on cryptocurrency exchanges. This has turned out to be the most beneficial way of earning profit.
- Listing Fee: If some new coins are to be listed in the exchange, a percentage of fee is charged as reimbursement by the investors. As coin listing process takes place once in a while, investors usually prefer the first method.
- Dark Pool Trading: This trading form justifies its name as dark pool trading-forums are not completely transparent. These types of platforms are not available publicly for people to invest. Numerous investors and venture capitalists use this platform to trade at reasonable prices. Exchange owners earn decent profit by the transaction fees paid by the traders as commission.
There are many ways of earning profit, if you have an exchange built according to user’s expectations. You’ll find many Cryptocurrency exchange development services providers choose the one that suits you the best.
You might ask if so many people are building these exchanges, what would make your exchange stand out. What will make people use your exchange over others?
Well, to answer all these questions, we’ve made a list of features that user expects from a crypto exchange. If you develop an exchange that check marks the entire list, your exchange is more likely to be used.
- The most basic and important features: Order Book and matching engine: The building blocks of an exchange order book and a matching engine. But what matters more important is how efficient matching engine is how fast it can match the traders and perform transactions. Also, how well an order book performs makes a difference too.
- Ease of use: If in this world where people have millions of options to choose from, if your exchange is not easy to use, you’ll be losing a huge user base. The order book and other components should be represented in a less complex manner, so that the novice traders that land on your platform don’t run away and find your UX user friendly. The user interface of your exchange should be clean, simple to use and intuitive as well.
- Security: This point even succeeds the above mentioned two points. Security is what traders are most concerned about. If your exchange is the most secure one, you can easily build a sense of trust in the traders. This is important how? Is that what you ask? Well, the users enter their personal/confidential information on your exchange. So, it’s important that your exchange follows cryptocurrency security standards. As there are a number of online wallets associated with each user, therefore preventive measures like (IP whitelisting, 2FA, and multi-signature wallets) should be used to save those wallets from hackers.
- High Liquidity: If you’ve successfully fulfilled all the above mentioned expectations but your exchange lacks volume of coins and high liquidity, things won’t go right. You have to include popular coins, so that more and more investors see potential in your exchange and prefer your exchange over others.
If you keep all these points in mind while developing an exchange, you can easily build a user base and generate revenue.
