Cryptocurrency Exchange Architecture – A Complete Analysis

Cryptocurrency exchange architecture

Over the past few years, the cryptocurrency market has been showering budding startups and entrepreneurs with millions and trillions. Presently, the crypto industry has flourished with numerous crypto business ideas. Crypto exchange development is one such business that reaps millions of profit with low investment. Admiring how cryptocurrency exchange will shower you with millions? As per analysis, the market size of global cryptocurrency exchanges will be 45 billion in the year 2022. 

In 2028, it would reach a massive growth of 110.12 million USD with a CAGR of 16.08%. This is just a prediction of the crypto market, even this can beat with a very high market size value. This is the perfect time to enter the crypto realm with the enriched crypto exchange platform. But, every startup who wants to revolutionize the crypto market faces a typical phase of designing the crypto exchange platform. 

The cryptocurrency exchange architecture is one of the important factors that influences the success rate. And, is also the major factor that gains the attention of fellow investors and users. If you need to create an effective cryptocurrency exchange architecture, then you have landed in the right place. We people at Coinsclone have given a complete guide on Cryptocurrency exchange architecture. Before entering into the core part, first, let’s have a glance at the components. 

Must have Components in Cryptocurrency Exchange Architecture

The cryptocurrency exchange architecture combines important components that make the platform more user-friendly and reliable for users. As told earlier, the entire success rate depends on the unique components integrated into the crypto exchange architecture. For your deep understanding, we have enlisted the essential components. 

Admin/User Dashboard 

The dashboard is the place where the website’s core content can visualize through features and functionalities. In simple words, it is the essential tool that attracts your users and investors for trading purposes. 

UI/UX Design 

The dashboard’s user interface and user experience are the essential factors that help to gain the attention of users. For seamless and hassle-free trading, the UI/UX design is an important factor. 

Wallet Integration 

A Crypto wallet has to be connected for every crypto transaction and other purposes. Hence for users, in-build or wallet-compatible features must be provided. 

Security Protocol 

Integrating security protocols for the crypto exchange is an important component to ensure the secure level of transactions for users. Security factors include cold storage of assets, end-to-end encryption, securing user information, two-factor authentication and others. 

Trading Machine 

The core part of the exchange is the Trading machine or trading engine. This is the plot where users can view the crypto coins, tokens, prices, order-matching algorithm, buy/sell orders and more. 

Order Book 

In this, the history of buy/sell orders, and previous order will display in real-time. Through this, the token order is transparently visible to traders. 

Payment Gateway Integration 

Like a trading machine, the payment gateway is also an essential factor for a crypto exchange platformThe popularity of exchange increases through various payment options like credit/debit card, bank transfer, and crypto-wallet.

These are important components of an efficient cryptocurrency exchange. Based on the type of cryptocurrency exchange, the essential components can vary. So, have a look at the crypto exchange types. 

Various Types of Cryptocurrency Exchanges and their Major Components

The cryptocurrency exchanges differs based on transparency, trading options, and wallet integration. Some important crypto exchanges are, 

Centralized Exchange 

The centralized exchange is the platform where a central entity or a third party governs the crypto transactions between the users. Here, the user can view the trading machine and choose the order for the transaction. The best cryptocurrency exchanges in the crypto market are Binance, Coinbase and Kraken. 

Decentralized Exchange 

The platform where the transactions can proceed without any third parties. The transactions can execute seamlessly with the help of smart contracts.

Hybrid Exchange 

The hybrid exchange platform comprises both centralized and decentralized exchange features. It offers a peer-to-peer nature from a decentralized exchange whereas it also provides the convenience and liquidity of centralized exchanges. The hybrid exchange follows security protocols like cold storage, multi-factor authentication, and advance encryption . 

Order Book Exchange 

The order book exchange market is a platform where the available trading pair of the exchange can be viewed by the user for transaction purposes. 

P2P Exchange 

Here, the users can trade crypto coins and tokens directly with each other without any central entity. In this exchange, the cryptocurrency seller can set their terms for a price, payment method, location and many others. 

Every crypto exchange architecture has its key components and security protocols. The front-end and back-end development involve accessible, seamless and reliable web designing. Next, we shall discuss about them in detail. 

Front End Features

The website’s front end generally refers to the user-facing platform. In simple terms, the design, navigation, website content, images, chatbox, buttons and interactions are the front-end features. 

  • User Dashboard – The user dashboard is the primary front-end feature that displays the crypto exchange’s content, navigation, trading options and others. 
  • Profile setting – The user is expected to verify themselves to start their transaction purposes. By submitting the verification ID, name, and other documents, the user is verified by the admin. 
  • Wallet Option – After the profile setup, the user needs to log in either with a custodial or non-custodial wallet for trading cryptocurrencies. 
  • Payment Gateway Integration – In the need to buy, sell or trade cryptocurrencies, it is essential to integrate a crypto payment gateway. The payment gateway option includes credit/debit cards, bank transfers, UPI and others. 
  • Trading Machine – The trading machine displays the live prices, cryptocurrencies, market value, liquidity and graphs. Through this, hassle-free trading of cryptocurrencies can be executed. 
  • Deposit / Withdraw cryptos – The exchange users can either deposit or withdraw cryptocurrencies for a certain period. 
  • Order Completed – The cryptocurrency trade order completion is also informed for users. Additionally, the users can either withdraw or continue trading in the exchange. 

Back End Features 

The crypto exchange’s front end may be a primary factor, but the back end is the pillar for the website’s success rate. Technical errors or bugs may highly impact the website and its functions. Technology stacks play an important role in the functioning of the website’s back end. 

  • Profile Approval – Once the users complete the registration process, the admin of the exchange will approve or decline the profile. 
  • Transaction approval – The exchange users would request the admin to send or receive the cryptocurrencies. 
  • User Monitoring – The cryptocurrency exchange admin monitors the transactions, and transaction history of the user to avoid scams and fraudulent activities. 
  • Approving Pending Order – The admin is responsible for approving the pending transaction order and trading pairs. 
  • Revenue-generating streams – The fee structure of the cryptocurrency exchange can be added, modified or deleted.  
  • Choice of Cryptocurrencies – The crypto exchange admin takes full responsibility for limiting the number of cryptocurrencies and adding new cryptos and trading pairs. 

Hence, the front end and the back end of the cryptocurrency exchange architecture’s essential factors. To develop the best exchange platform, you need guidance from a renowned Cryptocurrency Exchange Development Company. They have a skilled set of developers and an expert team to deliver a perfect exchange platform with an ideal back-end and front-end model. 

Wrapping Up 

We hope that you have attained enough knowledge about how architecture plays a sole role in cryptocurrency exchange platform development. As a startup, it is necessary to know the importance of cryptocurrency exchange architecture. Additionally, you have to consult a crypto exchange developer who has enough knowledge about the front-end and back-end designs. In that regard, Coinsclone is a leading Crypto exchange software development company that offers genuine and trustable cryptocurrency exchange architecture services. 

We have a seasoned set of developers and experts to build an exceptional exchange platform. Also, we help you to modify the features and security modules of the exchange for your business convenience. You can create your exchange platform from scratch or adopt an exchange clone script. We offer both services with a high success rate. If you want to know more, feel free to call our team and grab a live demo. 

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