Cryptocurrency Exchange Development Cost: Key Considerations
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The popularity of digital assets has been largely driven by cryptocurrency exchanges. The demand for digital currencies and decentralized finance is growing, thus resulting in a lot of interest in cryptocurrency exchange platform development.
According to Fortune Business Insights, global cryptocurrency market revenues are projected to reach $1,902.5 million in 2028, growing at a CAGR of 11.1% between 2021 and 2028. As a result, many startups and entrepreneurs are considering the development of a cryptocurrency exchange platform.
If you’re planning to build one, you probably want to know how much it costs to build a cryptocurrency exchange platform. The cryptocurrency exchange development cost must be well understood before you jump into the crypto exchange business. To get an idea of what goes into building a cryptocurrency exchange platform, let’s discuss a few factors that influence development costs. Let’s first understand what a cryptocurrency exchange is.
What is a cryptocurrency exchange?
A cryptocurrency exchange is a platform that allows users to purchase and sell cryptocurrency online through a company or other entity. The purpose of cryptocurrency exchange platforms is to exchange cryptographic forms of money, including advanced and state-issued currencies, for other resources. Basically, such platforms are middlemen between customers and merchants, earning money through commissions and exchange fees. Similar to a broker, these platforms allow you to buy, sell, and trade cryptocurrencies like Bitcoin, Ethereum, and Tether.
Cryptocurrencies were introduced when one had to manually enter a command in a terminal to send a coin. Users were eventually able to access cryptocurrency through easy-to-use interfaces. To make cryptocurrency mainstream, developers simplified the technical aspects so that ordinary people could own and trade it.
Crypto exchange development cost
It is difficult for developers to estimate the cost of work until they know the scope of the project. Because customers have different requirements, it is difficult to make calculations without preliminary negotiations. The cost of cryptocurrency exchange platform development is still something everyone wants to know in advance. To help you plan your budget, we will provide you with the average cryptocurrency exchange development cost.
The price of a basic crypto exchange is usually between $40000 and $50,000, and the cost rises with the addition of features. An advanced cryptocurrency exchange usually costs between $80,000 – $1,00,000 if you want more features and advanced functionality in it.
The cost of developing a cryptocurrency exchange script is similar to that of developing an application. Crypto technology offers a wide range of features, which may affect its cost. A wide range of features is available, including multiple platforms, multiple wallets, and multiple currencies; two-way authentication, chatbots, additional backups, large servers, and much more.
If we talk about the cost of crypto wallet development, it takes around $20,000 to develop a simple crypto wallet on the blockchain, and around $35,000 to $40,000 to create an advanced crypto wallet. If you add additional features, the cost may increase. To calculate the exact cost for your project, we recommend sharing your requirements with our blockchain developers.
Types of crypto exchanges and their costs
There are many factors that affect cryptocurrency exchange development costs. The types of crypto exchange models are one such factor. Cryptocurrency exchanges fall into several categories, so choosing the right crypto exchange is essential when building a cryptocurrency exchange platform.
The following table lists the estimated development costs for various cryptocurrency exchange models. Please note that these are just an approximation of the cost, and they may vary based on the scope and features of the project.
| Type of crypto exchange platform | Average cost |
| Centralized Crypto Exchange Development Cost | USD 50,000 to USD 75,000 |
| Decentralized Crypto Exchange Development Cost | Around USD 1,00,000+ |
| Crypto Exchange App Development Cost | USD 50,000 to USD 75,000 |
Centralized Crypto Exchange Development Cost
The capital investment amount required to build a centralized cryptocurrency exchange platform like Binance ranges from USD 50,000 to USD 75,000. In some cases, the price may rise to a significant amount based on the exchange platform’s requirements and the amount of time required.
Decentralized Crypto Exchange Development Cost
The most common type of cryptocurrency exchange is the decentralized one, and its development usually takes around USD 1,00,000+. The cost of any additional or add-on packages, including post-launch support, may vary.
Cryptocurrency Exchange App Development Cost
Cryptocurrency exchange apps such as Coinbase normally cost between USD 50,000 and USD 75,000. Development fees may differ from region to region and also based on other features.
As this was the determining factor in cryptocurrency exchange platform development, let’s look at the other factors that affect the development cost.
Factors affecting cryptocurrency exchange development cost
There are several factors that determine the cost of developing a crypto exchange. Development costs vary depending on whether a feature needs to be added or removed. Below are some factors that directly affect costs.
1. Type of exchange
As mentioned above, the main factor to consider is the type of exchange. The type of exchange you build has a significant impact on development costs. Exchanges are mainly divided into centralized exchanges (CEX) and decentralized exchanges (DEX). Decentralized exchanges operate without a central authority, while centralized exchanges manage user funds. Because smart contracts and blockchain integration are often implemented in DEX development, it is considered more complex and may incur higher costs.
2. Development team
Another important factor is the cryptocurrency exchange development company you pick. Your development team’s location, skills, expertise, experience, and time zone are crucial factors in determining the overall cost. The upfront cost of hiring blockchain developers, smart contract developers, security experts, and UI/UX designers will be higher. However, the long-term savings will be worth it since these individuals can ensure that your platform is secure and user-friendly.
3. Security measures
Cryptocurrency security is of paramount importance. The success of any cryptocurrency project depends on a secure platform. To protect the user’s data and funds, you will need to implement security measures such as two-factor authentication, biometric authentication, cold storage, and encryption. Moreover, the platform should be regularly tested and patched as needed for vulnerabilities. All of these robust security measures add significantly to the overall development cost.
4. User interface and experience
In spite of the fact that you can find UI/UX design experts at a low cost, you should not compromise on user-friendly interfaces since they are vital for attracting and retaining users. Thus, it is essential to invest in well-designed and intuitive UI/UX. It may increase development costs, but it will also enhance user satisfaction. The costs of developing mobile applications for iOS and Android platforms may also increase if you’re planning to build a crypto exchange application.
5. Integration with third-party services
Integration with external services is also a component of the development process. Adding third-party services such as payment gateways, liquidity providers, and market data providers can increase development costs. For the smooth operation of your exchange, you may need to research and select reliable third-party services.
6. Scalability
Scalability is not an option today. The reason why it is essential is that it enables your exchange to respond quickly to market changes, allowing you to take advantage of new opportunities. The initial stages of cryptocurrency exchange software development should consider scalability in order to accommodate future growth.
Therefore, if you choose a scalable architecture, you may incur additional costs. However, it ensures that your exchange can handle increased user activity and transaction volumes without causing major disruptions.
7. Maintenance and support
The development cost of a cryptocurrency exchange doesn’t end with the launch of the platform. Continuous maintenance and support are crucial to the smooth operation of the exchange. To maintain positive user experiences, you should budget for ongoing maintenance, updates, and customer support services when you consider cryptocurrency exchange development costs.
Key features of a cryptocurrency exchange platform development
Creating a crypto exchange platform requires careful consideration of its intended functionality. Regardless of the type of cryptocurrency exchange you build, there are some core features common to all of them. Here is an example of a standard user flow and the features needed:
User:
- Cryptocurrency exchange registration and selection of preferred cryptocurrencies
- Verifying anti-money laundering (AML) and know your customer (KYC) checks
- Funding the account
- Entering the value and volume of a cryptocurrency on exchange
- If a counter-offer is already available on the site, it concludes the deal
- Users can withdraw funds to their credit cards or in-app cryptocurrency wallets
Based on the user flow, cryptocurrency exchange platform development should include the following features:
User authorisation and verification
Onboarding begins with user authorization, so ensure the process is simple and easy. The majority of traders, however, expect their fellow traders to be trustworthy and to have good intentions, which means verification is very important at this point. Proper verification ensures transparency in transactions, reduces fraud risk, and proves that your cryptocurrency exchange adheres to international regulations.
User interface
If you want your exchange platform to be user-friendly, make sure its design is easy-to-use and simple. An intuitive user interface reduces trading time by ensuring efficient transaction execution. Among the features provided by the dashboard should be order management, order history, fund withdrawal and deposit, statistics, and so forth.
Trade engine
Trade engines are the heart of your platform, which find and connect traders. Moreover, the quality of the trade engine greatly impacts the speed and performance of the crypto exchange. It is better to provide customers with a faster service. For users to effectively manage their investments, they need real-time access to their trading data. So, put a lot of effort into developing your trading engine.
This situation can be addressed by integrating blockchain technology, not only for its security and transparency but also for its ability to speed up your trading engine. Just be sure you hire experienced blockchain developers for this job.
Wallet
Give your users the option of storing and transferring digital money with e-wallets. It makes sense to offer both cold and hot wallets. Users can transfer money into their hot wallets and withdraw it at any time. The cold ones serve as a backup since they aren’t connected to the internet and therefore can’t be hacked.
Order book and transaction history
A user can navigate the current bids using an order book, which contains a list of open orders. The transaction history allows users to keep track of their activities. This is an overview of completed trades with information about the trade rate and time.
Analytical tools
This is a must if you want to build an advanced cryptocurrency app or website. Provide users with real-time market data and additional market information. Many indicators help traders develop their game strategies, including Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), and Bollinger Bands (BB).
Push notifications
This is the best way to keep users informed about price changes, volatility, trends, news, and platform updates. Additionally, notifications can help users keep track of exchange listings. Be sure to let users choose which notifications they want to receive. You can set up push notifications easily, quickly, and affordably. Compared to other automated marketing tools, such as chatbots, push notifications are less expensive.
For an idea of what features you should include in your app, you can take a look at the crypto trading platform we built for IXFI. The platform is the first crypto trading platform that serves as a complete alternative to banks. The advanced analysis tools combined with the high security and reliability of IXFI let you trade cryptocurrencies with minimal risk and maximum reward. There are options for wallets, loans, and credit cards as well as multi-sided exchanges.
We included the following features for our client, IXFI:
- Profiles & KYC
- Smart Trading Algorithm
- Wallet, Transfer & Withdraw
- Liquidity Partner
- Exchange, Trading, Swap
- Reports & Analytics
Read the full case study: IXFI’s cryptocurrency trading platform
Summing up
Entrepreneurs looking to enter the cryptocurrency exchange market need to understand the factors that contribute to cryptocurrency exchange development costs. Even though upfront costs may seem considerable, investing in a well-designed, secure, and compliant exchange can pay off in the rapidly evolving world of digital assets. Cryptocurrency exchange budgets should take into account factors like development complexity, features, functionality, security, scalability, and maintenance.
It can be very helpful to have insight and guidance from an experienced development team, such as OpenXcell, in estimating and managing the development costs of cryptocurrency exchanges.
The cost provided in this blog is only a rough estimate and may vary depending on the specifics of the project. The final cost of developing a cryptocurrency exchange requires thorough analysis and consulting with professionals. Get in touch with a reputable company that offers blockchain development services for a cost estimate for your project.
