The crypto industry is one of the fastest-growing sectors globally, with a total assets value of $2.32 trillion as of the time of writing. This is an attractive space for businesses and entrepreneurs that want to offer a range of services for cryptocurrency users.
Exchanges are an important part of that landscape. They enable users to trade digital assets quickly and securely, as well as act as an onboarding interface for new users. Only through a licensed exchange, you can buy cryptocurrencies for fiat money.
Building an exchange from scratch is a major undertaking that has to ensure a good user experience, the highest security standards, and liquidity, among many other factors. Still, many projects that aim to utilize cryptocurrencies require the on- and off-ramp to be built-in the platform. This is where whitelabel cryptocurrency exchanges come to play as the more efficient and economical solutions that can be set up quickly.
However, there are different types of providers in the market, and it might be daunting to pick the one that you will be using for the long term. That’s why we have decided to write this guide–not to point you to any particular solution, but rather show you how can you structure your decision-making process to find the one that will be just right for your business.
Preparing A List Of Requirements
Let’s structure the search process to a few key requirements.
The white label solution must have certain basic features that will make trade transactions easier for crypto exchange users. For example, fiat currencies on-ramp and off-ramp facilities help in seamless digital asset exchange. Another crucial element of a white label crypto exchange is the Matching Engine that matches the bid and ask orders. You might look for with features that your users will find the most useful, too – like leverage trading, spot trading, OTC, funds management, market orders, limit orders, etc.
Apart from checking for these trading options, exchange owners must also look for other services available from the white label solutions. Adding price charts and analytical tools for trading pairs and logging user data requires additional work, so it’s good to have about all of such features at the time of researching available options.
Supporting Cryptocurrencies and Interoperability
Not all exchanges support all cryptocurrencies. This is because even centralized solutions need to be linked to different blockchains’ APIs to support trading. Hence, whitelabel exchanges come with a set of supported currencies and if you’d like to use a particular one, it has to be already included, or you’d have to find a team that will add it.
Many tokens in the market are ERC-20 which basically means they are based on one technology–Ethereum. However, going beyond that ecosystem, for example, to offer Solana, Cardano, and ERC-20 tokens, the platform has to be interoperable, working with multiple blockchains–a flexible trading platform should have that feature.
One of the primary things to decide before building your own crypto trading platform is the technology behind it. Some exchange software has provisions for the rapid deployment of a smart contract that makes margin trading and other such options possible. A technologically sophisticated trade engine reduces latency, thus making market orders smoother.
On the other hand, transaction speed is yet another important technical aspect of any trading platform. So, it is better to find out the transaction per second (TPS) rate of a cryptocurrency exchange before opting for it–the more users will use the platform, the more important the TPS number will be. Other technical requirements include facilities for API integration and multi-currency wallet.
Additionally, it is better if your crypto exchange software has both a web and mobile version. The majority of people are now connected to the internet through their phones, so both Android and iOS support is necessary.
Blockchain developers can build a superfine crypto exchange if they accommodate some or all of the aforementioned features in their exchange software. But most companies end up choosing a crypto exchange software that they cannot afford. This is why you must determine the budget first before finalizing a particular exchange software.
Always ask the starting price because that will give you a sense of how much additional features integration will cost you. You can accordingly make a decision about which white label crypto exchange will be suitable for you.
And if you have a limited budget but also want to offer simplicity – you don’t have to pay for a feature-heavy whitelabel exchange that gets great reviews if all you want to offer is bitcoin to fiat exchange, for example.
Additional Qualities To Focus On
The above are the key aspects, but that’s not all. Below, you can find additional aspects that can determine whether the solution suits your business case or not.
Any exchange platform must have access to adequate liquidity sources so that the buyers and sellers get their best price. Features like Market Maker, Matching Engine, and APIs to external exchanges provide the cryptocurrency exchange with deep liquidity. You must check if the trading platform has these facilities for providing liquidity to its users. The right kind of crypto exchange software has access to diverse digital currencies like bitcoin, ethereum, bitcoin cash and other digital assets.
Listing new cryptocurrencies with little liquidity adds much risk to the exchange, as the offered asset might become illiquid, ‘trapping’ investors in a scam.
One of the most important qualities of any software is the user interface and design of the platform. A user-friendly interface provides seamless trading experience for its users. Thus, navigating the platform becomes easier and users can trade a digital asset in a hassle-free environment. One must always choose an exchange that prioritizes user experience and security over anything else.
It is estimated that there’s about 300 million crypto users around the globe. That means it’s still early for most and every crypto business deals with a large portion of beginners. You’d want to set up a 24/7 customer support that will operate for many regions and languages but on the other hand, aving a good support from the whitelabel cryptocurrency exchange provider side is also likely to save you some headaches.
A white label crypto exchange must be able to support a large trading volume without the user having to pay exorbitant trading fees. In other words, the exchange must be scalable to accommodate any sudden surge in transactions. But the exchange will not always record a rapid rise in transaction volume. Even then, it must have the provisions to trade a significant number of digital assets in a trading pair at the same time.
Scalability should also be considered from the infrastructure side. Fast servers and 100% uptime at all traffic volumes is a must to build a reputable exchange that users will trust to use.
Another critical aspect of a crypto exchange is the safety and security of the protocol. The exchange must have the required facilities to provide maximum security while protecting user data. It can provide additional security with provisions for transactions of a digital asset in a risk-free manner.
This can be made possible through a two-factor authentication that provides an added security layer for the traders. Moreover, cold wallet storage of crypto assets also helps in securing the assets of users. Thus, it is better to opt for an exchange that provides cold storage facilities to the end-users.
Ease of setup
The reason why you would consider using a whitelabel cryptocurrency exchange over a custom one is its ease of setup. From that, you get a short time-to-market and all the cost efficiency.
Looking at market-ready solutions, it’s important to check if they are in fact easy to setup. Will you get support at it? Does the provider offer setup services or is there a solid documentation? How resource-heavy will be the development? What are the customization possibilities? You’d want to know that before buying the whitelabel solution.
Which Whitelabel Cryptocurrency Exchanges Should You Use?
The best whitelabel solutions are the ones that are just right for your project in terms of features, and all the mentioned aspects at the best cost. We’ve put a list of 5 whitelabel cryptocurrency exchanges which we consider the best, although you might want to look further.
Whatever your choice may be, Ulam Labs can support you in developing exchanges using whitelabel solutions, customizing them, or building any software that utilizes cryptocurrencies and NFTs.