Building Cryptocurrency Exchange Application? Give This A Read Right Now!
There are more than 300 million cryptocurrency users across the globe, are you planning to leverage this market with a crypto exchange application? If yes! you have landed on a wholesome guide to cryptocurrency app development must-haves. Read on!
In recent years, cryptocurrencies have demonstrated their value and have taken over the digital world. According to crypto experts, cryptocurrency has the potential to enable social and economic growth throughout the world, by offering easier access to financial services.
As per Fortune Business Insights, the global blockchain market size is projected to reach USD 163.83 billion by 2029, exhibiting a compound annual growth rate of 56.3% during the forecast period.
For those who are looking to make a profit via the booming crypto market, there are two bold ways to do so. One is to develop a cryptocurrency with unique financial capabilities and the other one is to create a cryptocurrency exchange platform to buy/sell blockchain-based currencies.
In this article, we would be exploring the latter one, we will deep dive into key cryptocurrency exchange features and essential security that a cryptocurrency exchange platform must have.
How is this helpful for you? Well, if you are going to venture into the world of blockchain development and connect with blockchain experts to get a consultation on building a crypto exchange app, be aware of all the nitty gritty around it.
What will you learn?
- What is a cryptocurrency exchange platform?
- Types of Crypto Exchange Platform
- Key Cryptocurrency Exchange Features
- Security Features That Cryptocurrency App Must-Have
- Fundings Raised by Cryptocurrency Startups
What is a Cryptocurrency Exchange Platform?
A crypto exchange platform assists users in storing, buying, and selling cryptocurrencies. You can use a crypto exchange platform to trade one cryptocurrency for another. For example, with a crypto exchange platform, you can convert Bitcoin to Litecoin or buy cryptocurrencies using fiat currency like the U.S. Dollar.
In addition to trading, crypto exchange platforms also display price discovery through trading activity.
Types of Crypto Exchange Platforms
To gain a clear idea of the cryptocurrency exchange features, it is important to understand the types of crypto exchange platforms that exist –
Centralized Cryptocurrency Exchanges (CEX)
A centralized exchange is the most common type of crypto exchange. It is basically a platform where you can sell or buy digital assets. In the centralized exchange, you have to trust a third-party operator to monitor the transaction and secure the buyer and seller’s assets.
In CEX, deals aren’t tracked on the blockchain but an IOU-based system is used. Binance, Coinbase, and LocalBitcoins are a few top examples of centralized crypto exchanges.
Decentralized Cryptocurrency Exchanges (DEX)
A decentralized Cryptocurrency Exchange, also known as DEX is similar to a centralized one, except you don’t need to rely on any third party. In this exchange, all the funds are stored in the blockchain.
A decentralized platform allows peer-to-peer (P2P) trading for which it uses an escrow system, proxy tokens and assets.
As the name suggests, the instant exchange allows users to exchange one cryptocurrency for others instantaneously. The exchanges are easy to use – all you have to do is register for a trader order and it will be executed in no time.
Instant Exchanges have one central service to provide access to the trading pairs of different exchanges.
Peer-to-Peer (P2P) Exchange
Peer-to-peer exchange system eliminates third-party involvement and allows crypto-market participants to trade directly with each other. It has made transactions easy and accessible by removing hassles associated with middlemen. Also, it has elevated the security and speed of digital transactions.
Key Features To Include In Crypto Exchange Platform
The first step to crypto app development is understanding the key cryptocurrency exchange features that your app must have. Whether you want to provide trading of one single cryptocurrency or many, begin with the core features that your platform should have.
Here are the basic cryptocurrency app features to include in your crypto exchange platform:
1. User authorization and verification
Provide your users with a simple and interactive onboarding experience. Also, note that verification is an important part of crypto apps to minimize the chances of fraud and maintain the transparency of transactions. In order to ensure users with complete safety of data, you must integrate your app with two-factor authentication and anti-bot verification.
At Systango, a crypto app development company, our adept UI/UX designers make the registration process user-friendly with innovative design elements.
2. Trading Engine
The trading engine is one of the core cryptocurrency app features. It processes information about prices and commissions, shows possibilities for a transaction, matches up offers and bids, creates schedules and more.
The trading engine handles:
- Balances Calculation
- Transactions Execution
- Match the buying and selling transactions
- Makes calls to access the order books.
Engine development is one of the challenging parts of the crypto platform. You would need an experienced crypto development team to lay the correct logic for the exchange and build an effective architecture.
3. User Interface
User Interface is not exactly a feature, but it includes all the components of the platform that connect with the user directly. When developing an app like Coinbase, you need to build a user-friendly interface that is easy to understand and interactive to use even for the user who is not much familiar with cryptocurrency trading.
Cryptocurrency exchange platforms generally use a type of chat called candlestick charts. Each candlestick represents the rate change for the selected period, where green indicates an increase and red indicates a fall.
Crypto exchange dashboards must include quick access to cryptocurrency exchange features such as:
- Market monitoring
- View order history
- Withdraw funds
- Creating and cancelling orders
- Connecting with support and more.
The wallet allows users to send, store and receive virtual currency. The more cryptocurrencies the wallet is integrated with, the better. For a cryptocurrency exchange app like Coinbase, the wallet should have the following features:
- Integrate multi-wallet functionality to support various types of transactions.
- Integration with leading banks and payment gateways is a must to buy and sell cryptocurrency in real time.
- Users should be able to withdraw or deposit amounts through email, QR code, ATM and transfer etc. Normally, trading and deposit of digital currencies happen without any account verification, but for withdrawing it is important to verify users’ accounts.
- Incorporating an e-commerce platform is also important to cater to the maximum audience.
There are mainly two types of Bitcoin wallets – hot wallets and cold wallets. Let’s explore both wallets in detail:
- Hot Wallet
Hot wallets are the ones that are linked to the internet and that is why these wallets are less secure. Thus, these wallets are more vulnerable to attacks by fraudsters and security threats. Though hot wallets are user-friendly, there is always a high risk when it comes to users’ security and privacy.
- Cold Wallet
Cold wallets store crypto tokens in offline mode, hence offering improved security. To secure the exchange from hacking, users should be able to transfer funds from hot wallets to cold wallets and vice versa.
While implementing an API for your cryptocurrency exchange platform, here are things to consider:
Websockets allow sending information related to trading changes and market moves. This technology facilitates an event-based response from the server without polling the server for the reply.
- Private and Public API
Private APIs or Internal APIs provide developers with an open architecture to work with. This approach provides developers with an easy way to plug into the data, backend system and software.
In contrast to this, Public APIs represent the set of directions that should be followed in order to access the data and services which are shared outside of an organization in the public domain.
- FIX Protocol
No matter what asset is traded, FIX Protocol is a must-have for every trading platform. It allows Binance or Coinbase app developers to integrate multiple trading platforms effortlessly and swiftly.
6. Admin Console
An admin console is required to enable the exchange owner and operators to manage different operational aspects of cryptocurrency exchange. The feature of the admin console can be customized according to the specific requirements of your crypto app, however, every admin console should have options like adding new currencies, editing trading fees, managing cryptocurrency listings, crediting/debiting funds and addressing support-related issues.
Analytics is a feature that can attract advanced crypto traders to use your system. Analytical tools allow traders to understand the market decision and design their strategies.
There are different types of technical indicators that traders use such as:
- The Relative Strength Index
This shows the strength of a trend and the likelihood of a trend change. RSI provides users with the magnitude of recent price changes and also displays the rate at which the price is changing.
- Moving Average
This indicator indicates the average price over a selected period of time.
- Moving Average Convergence Divergence
Helps in predicting the fluctuations in price.
- Stochastic RSI (StochRSI)
Aids in identifying oversold and overbought zones.
8. Push notifications and alerts
Push notifications are beneficial for you as well as your users as this feature will help you maintain communication with users. With the help of push notifications and alerts, you can notify users about special offers, news and promotions. For example, you can send notifications like coin listing alerts, price changes, trend changes, track exchange listings and more.
These were some of the basic cryptocurrency app features that you must include while crypto app development. But, this is not all. Secure trading is of utmost importance to a crypto exchange app and this calls into question the existing security paradigm and what features the exchange owners must incorporate to safeguard the users’ assets.
Essential Security Features For Cryptocurrency Apps
1. Registry Lock
Registry Lock provides additional security to cryptocurrency exchange platforms by locking the domain at the registration level itself. It prevents hackers from deleting crucial elements of your domain name or making unauthorized changes. According to the report by ICOrating.com., only 2% of the platforms use registry locks.
When you integrate the registry lock feature and initiate a request to make changes to the domain, a three-way security check is performed between the registry, the registrar (your service provider) and the domain registrant (you). Thus to achieve the highest level of domain security, the registry lock cryptocurrency exchange feature is a must-have.
2. Web Protocol Security
Lacklustre web protocols are highly vulnerable to cyber-attacks. Here are some of the security headers to make your platform more secure:
- HSTS: The HTTP Strict Transport Security protocol helps in ensuring that all the browsing sessions have HTTPS protocols.
- X-XXX-Protection: This prevents your app from cross-site scripting attacks.
- Content Security Policy (CSP): Enables the header to determine which dynamic resources have permission to load and thus helps eliminate the risk of XSS attacks.
- X-Frame-Options: This safeguards against clickjacking attacks by preventing your content to be embedded in other websites.
3. Cold wallet
As mentioned above, a cold wallet is an offline and safe storage for crypto assets. Integrating cold wallets, while cryptocurrency app development, adds an additional layer of security to your app. Even if the exchange is hacked, the assets stored in cold wallets are safe from theft.
Many cold wallets incorporate cryptocurrency app features like multi-signature authentication and biometric-enabled authentication to ensure the highest level of security. Linking your cryptocurrency exchange to the cold wallet means adding multi-level security and protecting the app against hacks.
4. Domain Name System Security Extensions (DNSSEC)
DNSSEC comprises the set of protocols that authenticate all the DNS (Domain Name System) queries. It exploits the combination of digital signatures and public keys to authenticate the data. DNSSEC has the power to reject illegitimate DNS entries to your server. Hence, having DNSSEC means stopping users from entering fraudulent websites and being affected by activities like cache positioning.
It is important to note here that DNSSEC is unable to prevent DDoS (Distributed Denial of Service) attacks and cannot provide data confidentiality.
5. Anti-DDoS modules
A DDoS or Distributed Denial of Service attack is a malicious attempt of disrupting the normal traffic of the targeted service, network or server by overwhelming the target with the flood of internet traffic.
Due to unprotected crypto development, many cryptocurrency exchange platforms have been a victim of DDoS attacks, which made the crypto exchange owners suffer from heavy downtime losses. Bitfinex, one of the leading crypto exchange apps has to suspend its trading services due to a DDoS attack.
Leverage anti-DDoS hardware and software modules such as network firewalls and load balancers to prevent DDoS attacks.
Now that we have gone through all the essential features that your crypto exchange platform must have, let’s have a quick glance at a few crypto exchange platforms that have received funding from 2018 till now.
Fundings Raised by Cryptocurrency Startup
Based on the ASIC (Application-Specific Integrated Chip) miner technology for Bitcoin mining, Bitmain offers hardware-based mining solutions for cryptocurrencies.
Foundation year: 2013
Investors: Sequoia Capital, Coatue+9 more
Funding raised in the last round: USD 560M, Series C, Aug 2018
The Circle App is a decentralized peer-to-peer platform based on patented AI crypto trading technology that helps people around the world leverage the crypto market without any expertise.
Foundation year: 2013
Country: United States
Investors: Breyer Capital, Bitmain + 29 more
Funding raised in the last round: USD 110M, Series E, May 2018.
tZero offers a marketplace to trade private digital securities. The platform provides you with an easy and intuitive way to buy, sell and manage cryptocurrency. The available cryptocurrencies are Bitcoin, Ethereum, Litecoin, Chainlink, Ravencoin, Bitcoin, and Basic Attention Token.
Foundation year: 2014
Country: United States
Investors: Seven Hound Ventures, Team in Residence + 7 more
Funding raised in the last round: USD 76M, Series B, Aug 2018.
A cloud-based financial service, Uphold is a platform that enables individuals to securely, move, convert, hold or transact in various assets. Uphold offers 43 cryptocurrencies, 27 fiat currencies and four types of precious metals.
Foundation year: 2014
Country: United States
Investors: Greg Kidd, Hard Yaka
Funding raised in the last round: USD 58M, Angel, Jan 2018.
5. Coinbase App
If you’re a crypto user, you might have heard about or even used this app. Coinbase is the world’s largest cryptocurrency exchange platform with over 56 million users. Coinbase allows you to securely buy, sell and store cryptocurrencies like Bitcoin, Bitcoin Cash, Litecoin, Ethereum, Ethereum Classic and many more.
Foundation year: 2012
Investors: Tiger Global Management
Funding raised in last round: $300 Million
Turn to Systango for Tailor-Made Cryptocurrency App Development Solutions
If you are planning to have your very own cryptocurrency exchange app, then Systango is your one-stop destination. Be it centralized or decentralized, our experienced crypto developers offer all-inclusive crypto exchange development solutions that ensure seamless, secure, instant and efficient trading.
Being a leading cryptocurrency app development company, We incorporate every essential security to the crypto exchange platform, including, but not limited to HTTPS Authentication, Cross-Site Request Forgery, Data Encryption, Anti-Denial of Services (DDoS) and more.
Avail fast, scalable and highly secure crypto app exchange development solutions from blockchain experts at Systango.