Crypto Exchanges like Binance are the powerhouse of the crypto industry as they facilitate the buying and selling of crypto or other digital assets. This popular centralized exchange (CEX) has gained global adoption and has exceeded the market cap of $12 billion. Thus, this leading crypto exchange has become the dream of all crypto projects or startups as it serves as a significant market entry point for them. However, the best news is that one can now build a centralized exchange like Binance and monetize their blockchain expertise with a great team of experts and business ideas. So, let’s go about understanding the essential requirement, steps, or factors to consider while building a crypto exchange like Binance.
While thinking of developing a cryptocurrency exchange like Binance it is important to get a clearer idea of the exchange architecture. The CEX architecture is the structure that determines the position and relationship of each component in the system. Let’s understand what generic CEX architecture includes:
The CEX platform shall allow users to create their accounts or login into the existing account with multiple login options. This feature shall be well designed and ensure that no authorized access is allowed that can lead to data manipulation or breach. Two-factor authentication and biometric logins are the most preferred options.
To ensure that the platform is legit, trustworthy, and reputed give regard to robust KYC policies. Provide options to thoroughly check the new user’s identity before activating the membership.
The ideal CEX architecture shall enable users to facilitate transactions and the movement of funds such as deposits and withdrawals with minimal fee involvement. It is important for platforms to ensure that they platform has the least technical glitches and that functionalities shall be platform-specific. This may include functionalities like limit market, stop-limit orders, P2P orders, and others.
The platform APIs facilitate on-platform data exchanges which include manual and automated trading with the use of third-party platforms. Alongside this, every platform shall have activity-tracking tools that evaluate the trade volume and generate real-time trading statistics.
Since the platform is expected to keep user activity under control, therefore there shall be an admin panel. Such an admin panel shall clearly state the admin rights that only reliable individuals have access to them.
Before starting a project deciding the development options either a white-label solution or a custom centralized exchange is important. Both these methods alternatives have their own pros and cons.
White-label solution: This is considered quicker development and launch solution as it is simple to set up without any need for any advanced development knowledge. However, it comes with limited feature upgradability and a high initial cost.
Custom CEX development: This is a flexible alternative where the technical professionals have control of the development process with 100% ownership rights. Alongside, it also comes with the ability to allow rework on specific features and functions but takes a longer time.
The first step is to choose the blockchain ecosystem that will power the entire crypto exchange platform. It is best to compare various blockchains such as Ethereum. Polygon, Solana, BSC, etc by considering their pros and cons. Alongside this, negotiation of the key features and designs of the project is a way toward the actual development phase.
API which is the hidden eye of the platform provides essential functionalities to the platform which include –
Security is of great importance for CEX platforms. Therefore, it becomes essential to incorporate secure architecture on the back end. This can be done by using different servers to hold the system’s core data and keeping them encrypted using security keys, and two-factor authentication to prevent unauthorized access. Alongside this, before the official launch of the CEX platform make to conduct a detailed QA review and smart contract audit.
The average cost of getting a crypto exchange like Binance developed can be a minimum of between $30,000 - $ 50,000. The additional cost involves blockchain integration that ranges between $5000 - $ 10,000 and APIs that are approximately $50,000. Thus, the overall cost of building a cryptocurrency exchange like Binance lies between $ 50,000 to $ 150,000. Therefore, it becomes important to choose the best blockchain development team that does justice to the overall cost involved and provides better ROI.