Being the world’s largest cryptocurrency exchange, Crypto trader Binance has a trading volume of $28.85 billion, which is twice as high as Dsdaq. As famed investor Peter Lynch said, “During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents, and blue-jeans made a nice profit.” The gold rush in 2021 is the cryptocurrency boom. Picks and shovels have been replaced by crypto exchanges.
So, if you’re looking to start your own Cryptocurrency exchange business, this article will guide you in the right direction.
WazirX is a peer-to-peer crypto exchange platform from India that provides an intuitive trading interface to its users. Buying/Selling crypto assets on WazirX is easy and fast. India does not have a clear stance about the regulation and acceptance of cryptocurrencies and blockchain, and only a handful of entrepreneurs are ready to take up businesses that are related to blockchain and cryptocurrency.
How to Start an Exchange Like WazirX?
If you want to start a crypto exchange just like WazirX, you might need a WazirX clone script that has the features of WazirX. There are several crypto exchange development companies that provide the best crypto exchange clone scripts of leading cryptocurrency exchanges platforms around the world. Whatever WazirX clone script you choose, it should have advanced security models and enhanced features.
Here’s a 12 step guide to creating an exchange trading system like WazirX.
- Attain funding for your venture.
Before starting on your project, you should know the approximate costs involved. In order to develop and launch a cryptocurrency exchange, a bare minimum of $135,000 will be needed. This includes the cost of technology, hosting, some initial legal counsel, government registration, and initial advertising. While not all funds are required upfront, it is important to ensure the venture has access to enough capital to allow a proper runway.
- Obtain legal counsel to ensure licensing requirements are met.
This is the most important step in setting up a cryptocurrency exchange anywhere in the world. Before you put your plan into action, it is important to seek legal counsel to understand the regulatory demands of your new venture. Proper licensing will need to be obtained in all jurisdictions in which the company plans to operate. In many places, cryptocurrency exchanges operate without significant oversight, as government and regulation have not yet caught up with technology, while in other places, including the US, Bitcoin operators must be licensed Money Transmitter businesses and must follow the rules and regulations outlined by the SEC and CFTC. Proper legal counsel is a must. Maintain a legal team for ongoing compliance.
We cannot stress enough that it is extremely important to maintain legal compliance and follow all current and proposed laws and regulations, not only in the jurisdiction in which your exchange is domiciled but also in all foreign jurisdictions in which your exchange members or traders will reside or conduct trading from. Cryptocurrency laws are rapidly evolving globally, so it is very important to either hire a full-time, in-house legal compliance team or outsource to reputable law firms in order to keep your exchange legal in all those regions where your exchange will operate.
- Find a technology solution provider.
Opt for a White label exchange software with the full source code. This allows you to customize your exchange.
- Creating a Sign in/Sign up
The signup or login page is the first thing a user will see, but the main point of it is not just to let people in after registration but also to protect the system from any unauthorized logins, hack attacks, or any other kind of manipulations. For this reason, this functionality should be very well developed and correspond to the highest standards. Besides the general login/password combination, your exchange should also have a 2FA to provide additional security to users.
- Verify the Identity of Customers
One of the reasons the crypto exchange market is so trusted among the users is that every user is thoroughly verified. Depending on the type of verification, the verified users generally have more possibilities. For example, the limits for withdrawal for the verified users are higher than for the non-verified. The verification is important to ensure the transparency of trades and to minimize the possibility of a scam.
Adhere to the Know Your Customer(KYC) policy and verify the users of your exchange through identification methods like Adhar/PAN card etc. You don’t want to be on the wrong side of the law by encouraging malpractices like Money Laundering etc.
- Partnering with a Payment Processor
Not all payment processors are equal. Fee structures, among other things, will vary widely between companies. You will need the lowest transaction rate in order to be competitive with other exchanges. Additionally, some processors build hidden fees into their contracts, so be sure you understand the contract you’re signing. Other differences between processors include settlement time and compliance with PCI DSS, a set of best practices to ensure cybersecurity. Given the current directive issued by the Reserve Bank of India to all the Financial Institutions/Banks, it isn’t possible for a Cryptocurrency exchange to partner with banks for online transactions. In a normal situation, partnering with a good bank ensures faster clearances and settlements of fiat funds.
An alternate option to banks is to partner with a good Payment Gateway for adding and withdrawing Fiat Funds. One can also look for P2P remittance of Fiat Funds in the absence of bank remittance.
- Creating a Customer Base
Once you have established all the above steps, it is time to bring users to the exchange. You can make sure there is enough liquidity for users to trade effectively with your exchange. You can increase the availability of crypto coins on your exchange by connecting to an existing cryptocurrency exchange to start with.
- Start marketing and PR campaigns.
Once your exchange has launched, it is time to connect with crypto news outlets. It is important to adequately plan your marketing activities, along with their costs, to ensure your initial raise doesn’t leave you scrambling to cobble together additional funding. Often, exchanges do not include a marketing budget instead of focusing on free social media marketing until a critical mass of traders is reached.
- Implement best security practices.
Security is the most important element of any cryptocurrency exchange. Top-of-the-line security measures should be in place to ensure that the customer’s private data and the transactions are safe. Cryptocurrencies have become a ripe target for cybercrime and hacking, leaving exchanges scrambling to differentiate based on security. Since the application stores sensitive user information, it has to be properly secured in order to prevent data leaks and attacks.
- Customer Support Center
Last but not least, it is important to have a proper Grievance redressal system in place for any customer issues. An efficient customer service center goes a long way in ensuring customer satisfaction and Loyalty to the exchange.
If you need any clarifications with cryptocurrencies and ICO’s, get in touch with a reliable and reputable cryptocurrency exchange development company. Your ability to shine in this area will determine your long-term success. Those dealing with consumers must be attentive and satisfactorily resolve customer complaints and technical issues.
- Connect your exchange with others for added liquidity.
The cornerstone of any successful exchange is liquidity. Without an order book and trading activity, potential customers will view your new venture with skepticism. In order to bypass these issues without facing the need to simulate activity via dummy accounts within the new exchange, connect your exchange into a network of existing exchanges to enhance its liquidity. Remember, the larger the network of exchanges, the less liquidity will be an issue for your new exchange.
- Go live via beta testing.
You’ve built your exchange. You’ve set up a contract with a payment processing firm. And, you’ve taken great pains to ensure your exchange is following all rules and regulations. You have ensured that your venture is protected from cybercrime. Now, it’s time to launch your exchange and test its full range of capabilities in beta. An obligatory part of modern application development, It is extremely important as it allows distinguishing and eliminating most of the bugs within the logic, as well as within the UI, before actually launching the application.
How WazirX P2P Exchange Works?
WazirX’s peer-to-peer platform helps users to buy and sell USDT for fiat currencies directly. This exchange is safe and legal. Here is a brief overview of how WazirX P2P exchange works –
- WazirX matches up a buyer who is looking to buy USDT for fiat currency with a seller who is looking to sell the same for fiat.
- This platform protects the USDT through escrow during the transaction.
- The transfer of fiat currency to the seller’s bank account is carried out through IMPS or UPI.
- Finally, after confirming the payment from the seller, WazirX releases the USDT to the buyer.
Why Start an Exchange Like WazirX?
With an exchange like WazirX, you can expand your services around the world and get more users and revenue. A P2P exchange platform allows market participants to come together to trade directly with each other. A peer-to-peer exchange does not match buy/sell orders. Instead, it matches the participants with complimentary needs. In a P2P exchange, the transactions are carried out by connecting people of similar interests. They process orders on their own and strike a balance over the transactions. There is no third-party involvement in the procedure. You can create an exchange like WazirX using a clone script.
A clone script is a Whitelabel website script that has 100% source code encrypted using advanced security features, and in this case, it would replicate the functionalities of WazirX. A clone script would help budding entrepreneurs instantly start peer-to-peer cryptocurrency exchanges like WazirX.
Features That a Wazirx Clone Script Should Have
- Peer-to-peer crypto trading removes the need for intermediaries in the trading process. In this process, the users directly transact their buy or sell orders.
- The clone script should provide multiple-layer security like two-factor authentication, SSL technology.
- It should have a super-fast trade matching engine to facilitate a smooth and hassle-free trading experience for its traders.
- WazirX has integrated multiple cryptocurrency wallets into its cryptocurrency wallet. This supports over 100 cryptocurrencies through the trading process.
- Escrow protection is needed for any cryptocurrency exchange to prevent the traders from theft and hacking. This can be done with a multi-signature wallet.
- High transaction speed
- It should be possible to enable an integrated trading bot for a sophisticated trading experience that is offered to their traders. Automatically, this bot goes ahead with trading when the market price matches with the programmed price.
- OTC Trading
- Futures and options trading
- ERC-20 Ethereum Tokens and TRX Tokens Support
- Cryptocurrency staking
- Bounty Features
- Atomic Swap
- Instant KYC and AML verification
- Smart contract-based escrow system
- Self-explanatory interface
- Multi-language support
- Dispute Management
- Preferred trader selection
- Payment Gateway Integration
Is It Safe to Trade on WazirX?
- WazirX is currently registered as an international exchange where all your funds will be safe, even after the government announcement regarding the ban on cryptocurrencies.
- The crypto ban in India is a draft, and it is yet to be presented in the Indian parliament.
- Until then, there are no official government notifications about the crypto ban in India. Hence there is no need for you to panic about WazirX and crypto trading in India.
Considering the popularity of crypto exchanges worldwide, it is understandable why more and more people involve themselves in these systems.
Digital currency exchange provides great opportunities for both those who are just becoming familiar with the market and those who already have quite a good experience in it. But the market still has quite a few limitations depending on the country or the currency provided, and this can also mean that there is potential for growth.
Of course, no step-by-step guide, no matter how extensive, can answer all your questions. Hopefully, though, this has helped you construct a preliminary action plan with which you can move forward.