Analyzing the major types of White label crypto exchange software in the market
A cryptocurrency exchange software helps investors to exchange popular cryptocurrencies. There are different kinds of exchange software providing various services in the market. They are
- Centralized Exchange Platform — They invite buyers and sellers to place their orders on the platform and execute the deals by acting as an intermediary.
- Decentralized Exchange Platform — Buyers and sellers execute the transaction directly by interacting with each other. A higher level of privacy is ensured for all the users in the absence of any intermediaries. They are highly resistant to hacking.
- Hybrid Exchange Platform — It takes into account the benefits offered by both centralized and decentralized exchanges. Hence, it assures adequate liquidity and robust security through automation.
- P2P Exchange Platform — It enables interactive trading between interested parties in a secure environment. The Escrow system will release crypto assets to the buyer once the funds have been received.
Advantages to gain by using the above-mentioned exchange platforms
Centralized exchanges are blessed with high liquidity and a huge trading volume. They accept different methods of payment, such as debit cards, credit cards, wire transfers, and bank transfers.
Decentralized exchanges give more freedom to users for monitoring their funds by enabling trading through smart contracts. Users have access to their respective private keys.
Hybrid exchanges are completely secure. They are convenient to use, provide access to cloud mining, and have adequate liquidity.
P2P exchanges are highly resistant to transaction censorship. They remove the possibility of a single point of failure and are quite affordable.
Factors to consider while choosing a crypto exchange software
- Security — Safeguarding the investor’s data and funds should be the top priority for developers of exchange platforms. While centralized exchange platforms are subject to frequent incidents of hacking due to a single point of control, other types of exchanges such as decentralized, hybrid, and P2P are highly secure. Hence, every exchange platform must invest in top-notch security measures, such as two-factor authentication, end-to-end encryption, jail login, and password-protected user access.
- Coin holders — The coin holder is none other than the user for a decentralized exchange. On the other hand, the coin holder is the exchange for centralized and hybrid exchange platforms.
- Acceptance of fiat currency — While centralized and hybrid exchange platforms accept the purchase of cryptocurrencies using the leading fiat currencies, this feature is not available on a decentralized exchange platform.
- Availability of liquidity — It refers to converting assets or securities into cash without influencing the market price. Most of the exchange platforms possess sufficient liquidity and are blessed with the ability to handle huge trading volumes. Compared to other platforms, decentralized exchanges have the lowest liquidity.
- Level of privacy — In a centralized exchange platform, users are subject to scrutiny as they have to provide lots of personal information and bank details. In a decentralized exchange, not many personal details are demanded as they permit anonymous trading and execution of transactions.
- The number of digital assets — Centralized and hybrid exchange platforms accept a wide range of digital assets. Decentralized exchange platforms accept only a few types of digital assets. Investors or traders of cryptocurrencies can seek the features needed for them and decide which exchange platform suits their trading requirements.
Hence, the White label crypto exchange software must accept the major cryptocurrencies and fiat currencies. It should comply with the KYC (Know Your Customer) and AML (Anti Money Laundering) guidelines issued by regulatory authorities for verifying the background of investors to ensure legitimate transactions. The crypto wallet plays an integral role in storing the coins or tokens of investors and should be multi-signature enabled. Security measures, such as two-factor authentication, encrypted database, and anti-DDOs protection, must be ensured. Freedom should be given to users for adding and removing cryptos according to their preferences. A matching engine should match orders raised by buyers and sellers accurately.
Benefits of using a White label Crypto exchange software
- Faster deployment is ensured as time is saved instead of building an exchange from scratch.
- Money is saved as there is no need for the buying company to hire skilled technical resources.
- There is no need for the organization to go through the tiring and repetitive phase s of trial and error involved in exchange creation.
- A white label crypto exchange software brings a greater return on investment.
Working process of a White label Crypto exchange software
The user registers himself on the exchange giving all his personal details. This is followed by an extensive KYC/AML verification. The user creates a wallet address and places his respective order. The order will be matched by considering the buyer’s and seller’s requirements. After the order has been confirmed from both sides, the smart contract-based escrow service will hold the asset that is going to be sold. Once a buyer has been found, payment would be made for the purchase of cryptocurrencies. The seller will confirm after receiving the payment. The Escrow immediately releases the asset held under its custody and transfers it to the respective buyer’s wallet. The buyer will store the asset in the cold wallet.
It is quite evident that the white label crypto exchange will soon become a rage in the future. The increasing acceptance of cryptocurrencies, along with the growing adoption of blockchain technology, will help make the white label crypto exchange software enter the mainstream market. Hence, capitalize on the positive wave and invest in a reliable white label solution sooner than later.