In the modern landscape, it is important for cryptocurrency exchanges to be diligent in attracting…Read more
One of the most significant decisions facing a cryptocurrency exchange startup is whether to develop a platform from scratch or use a turnkey solution. Here, we look at some of the considerations in setting up your own crypto trading platform, together with the pros and cons of using a software provider versus going it alone.
Costs and Fee Models
On a pure cost basis, there may not be a big difference between using a turnkey cryptocurrency exchange solution compared to developing from scratch. However, when starting from scratch, you’ll need to contract many different parties, including developers of the front- and backend of the exchange, lawyers, and various other experts.
With a turnkey solution, you will have the ease of paying just one provider to set everything up on your behalf. Some providers may charge an ongoing recurring fee, whereas others will complete the setup for a one-time payment. In the latter case, options are available for continuing support and maintenance.
Developing your own platform will invariably take a lot longer than using a turnkey provider. The initial build itself is likely to take months. Even once the build is done, the platform must undergo rigorous alpha and beta testing to solve bugs and other issues before you can launch to the public.
Conversely, an exchange provider already has the core software ready to go. Depending on the level of customization required, it may take a little time to get the final exchange prepared for launch. However, the time spent customizing an existing product will be minimal compared to a full build starting at ground zero.
The Human Element
There are further costs and time considerations in engaging the team you’ll need to build your cryptocurrency exchange from scratch. Developers are in hot demand, so you’ll also need to factor in time on sourcing and hiring activities.
There are different skills involved in building a trading engine, designing and developing a user interface, and creating mobile apps. So it’s also likely you’ll need to find more than one person for the job.
Customization and Ownership
Building your own crypto trading platform allows the ultimate freedom in customization, whereas using a turnkey solution may mean making some compromises. However, many providers offer full customization on the look and feel of the finished product, as well as options for different features.
When you develop from scratch, you also own all of the source code. When using a provider, it’s worth checking whether or not you will have any rights over the code for your exchange. Some companies may retain ownership, whereas others will give you the code as part of the package.
Fund Security and Wallets
A full build means you will also have the responsibility of putting in place robust security measures to protect the funds of your exchange’s users. This means finding a reliable provider of hot and cold storage wallets and creating policies around how the funds can be accessed.
Using a provider, storage and wallet options may be included as part of the overall package. You can take advantage of an existing policy framework for moving and accessing funds, freeing up time and resources for other activities such as marketing.
Performance and Maintenance
When building your own digital asset exchange, you’ll need ongoing technical support to ensure the performance of the exchange. If the user’s experience lags in order matching, they are likely to take their business elsewhere. Therefore, maintaining a reliable and consistent level of performance is critical for the exchange business.
In contrast, a turnkey exchange provider can provide a guarantee of performance. They also have the necessary technical teams available on hand to quickly resolve any issues before the user experience is negatively impacted.
While there may be other considerations for how to set up a new cryptocurrency exchange, the ones listed here are among the most critical. If you’re looking to launch something revolutionary that’s never been done before then you’ll likely need to start from scratch. However, if you want to get your own branded crypto exchange offering up and running without long lead times and with a guarantee of performance, then turnkey is probably the best option for you.
With a seemingly endless selection of cryptocurrency exchanges in operation today, it can sometimes be…Read more