What, Why, & How Of P2P Cryptocurrency Exchange App Development For Crypto Startuppers
Cryptocurrencies are the promising currency of the future. One primary reason is that central banks cannot manage and devalue cryptocurrencies via inflation over time. Plus, the blockchain technology behind it accelerates the revolution of digital currencies. Because of that, business people can tap into the transformative possibilities of decentralized finance (‘DeFi’), borderless payments, and machine-to-machine transactions.
Benefits of blockchain and crypto duo lure traders to buy and sell cryptocurrencies to gain profits for themselves. On the contrary, enterprising millennials and financial institutions strive to multiply their ROI from cryptocurrency exchange app development. However, what happened to one of the top 10 crypto-engaging countries in the world has left crypto exchange developers in confusion.
On 5th Feb 2021, the Central Bank of Nigeria banned the exchange of cryptocurrency and decreed financial institutions to close all accounts that trace to holding and trading in cryptocurrency. This phenomenon shook traders and investors who have heavily invested in cryptocurrencies. But P2P exchanges like Remitano, Binance, BuyCoins, LocalBitcoin, and more were there to their rescue.
It proves that P2P crypto exchanges have the potential to outperform centralized crypto exchange platforms in the upcoming time. Users have to deposit crypto or fiat currency into a platform crypto wallet on Centralized platforms before starting trading. The wallet then lets users transfer funds to another external crypto wallet.
From deposit & withdraw funds into bank accounts to buy-sell crypto, such platforms charge a transaction fee. Moreover, transactions on centralized platforms are overseen by a third party who operates the exchange. A peer-to-peer exchange, on the other hand, is decentralized. It allows traders to trade directly with one another, eradicating a third-party oversight.
Excluding central authority, P2P exchanges employ smart contracts. These contacts self-execute as per set conditions and record every transaction to the blockchain. Thereby, P2P aka Decentralized Crypto Exchanges—DEXs are free from technical failures, including third-party interfaces, cyber-attacks, and stolen cryptocurrencies.
Then, why would users risk their accounts on cryptocurrency exchanges when they can trade on P2P Platforms effortlessly without getting flagged?
Know In Deep About P2P Cryptocurrency Exchange App Development Benefits
Hackers are less likely to target DEXs as they do not hold user funds (instead use smart contacts to execute and record trade in the blockchain). Since P2P exchanges are self-executing, they charge a far lower fee than centralized exchanges. Plus, it is non-custodial, meaning external wallets can interact with P2P platforms, and it doesn’t control users’ private keys.
Some other benefits of P2P Cryptocurrency Exchange Platform Development to count are:
- Cutting edge blockchain solutions;
- Lightening speed transactions;
- Provision For Global Business scalability;
- Secure payments;
- Censorship in transactions;
- 24*7 customer support;
- Low trading costs.
A YoY analysis of P2P transactions reported: Sent and received amounts (in US dollar) by P2P exchanges increased in December 2020 by +164% and +197% compared to January 2019.
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Components To Keep In Mind When Developing A P2P Cryptocurrency Exchange App?
When you are all set to hire a peer-to-peer exchange development company, ensure you discuss the below attributes. These DEX attributes are crucial to make your exchange secure and trade-friendly. Therefore, when you create a business model for your P2P crypto exchange platform, dig deeper into these elements with your consultant. The discussion will lead you to decide if there’s any you can operate your exchange without.
- Private blockchain; Develop a blockchain restricted to your network.
- Crypto wallets; Store, receive and send digital currencies from your wallet
- Mobile apps;
- Smart contracts; Automate & Streamline the contract management process
- DApps; Build a disruptive decentralized computer application
- Supply Chain Management Software; Execute supply chain transactions in the most efficient way
- Crypto exchange platform; Trade cryptocurrencies in a seamless way
How does a P2P cryptocurrency exchange platform work?
Understanding the operational flow of decentralized exchange aids in optimizing the entire development process. So as you know, the P2P cryptocurrency exchange platform is a decentralized platform backed by blockchain technology. It eliminates the intermediaries and connects buyers and sellers directly, seamlessly. Hence, its system operation goes like below:
User registration → KYC & AML authentication and Profile verification → Order placement → Wallet order creation for buyer → Preferred trader selection → Proximity matching → Order confirmation → Smart contract between the buyer and the seller → Buyers make the payment for the purchase → Seller’s confirmation for the order → Escrow releases assets and transfers it into buyer’s wallet → Asset stored in the buyer’s cold wallet.
Crucial Features For a Peer-to-Peer Crypto Exchange platform
From registering to storing purchased digital assets, your exchange needs the below-mentioned features to execute the process. Remember, right after the business model, you prepare a project requirements document that must entail features you want to build.
- Multiple cryptocurrencies;
- Multi-language support;
- Crypto Swaps;
- Payment gateway integration;
- Multi-factor authentication;
- Multi-currency wallet;
- Admin Panel;
- Trade through ads;
- Private messaging;
- Proximity match;
- Secure transactions;
- Real-time market value;
- KYC and Profile verification;
- Cross trading;
- Dispute resolution;
- Preferred trader selection;
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How does the P2P Cryptocurrency Exchange App Development process look?
Here is our quick process overview to understand how P2P cryptocurrency exchange development takes place in Kody Technolab.
Research and Planning:
We gather a deep understanding of the market by doing extensive research & analysis. Our experts collect requirements and help you plan a strategy that aligns with your business goals.
We help you with designing a reliable P2P platform by selecting the necessary technology and following the security norms. Kody Technolab addresses every security aspect & smart contract protocol.
Trade engine installation:
We install a trade engine to facilitate buying and selling of cryptocurrencies. In the next step, we will list down the coins or tokens required for an exchange.
Testing and iteration:
We ensure that our platform solution performs flawlessly. If any errors are found, we don’t hesitate in iterating the solution.
Once we are convinced that we are satisfied with our solution, we deliver it to the client.
How much does P2P Crypto Exchange Development Cost?
A white label solution will cost you around $30K. Nonetheless, you may not receive a customized solution as per your brand with a white label exchange. We recommend creating a P2P crypto trading app either in-house (if you have resources or hiring mobile app developers) or from an outsourcing company.
The cost to develop a P2P crypto exchange app from scratch may be a bit costlier than the white label. But it is worth considering from a long-term business perspective. Plus, by creating a P2P exchange prototype, you can collect feedback from real users and attract investors as well. And just like that, step-by-step, you can upgrade, scale, and maintain your own crypto trade exchange hassle-free.
Speaking of the cost, it may vary depending on various factors like app UI/UX, complexity, location of the app development company, etc. Understand which factor impacts the most on the cost. That way, you and your consultant team can strategize the development, reducing the initial cost.
Yet, if you want to estimate the cost for your P2P crypto exchange app idea, you can consult us!