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Hedge funds, pensions and sovereign wealth funds the world over are now holding increasing amounts of crypto on their balance sheets. With the seeds of the new cryptographic financial system in full bloom, offering crypto-trading access to your customer base is more profitable than ever. Read on below to find out more.
Crypto is no longer in its infancy. With the dawn of Bitcoin and Ethereum ETFs, there is no longer a ‘a case to be made’ for crypto. Adoption has happened, and appreciation for crypto is now mainstream amongst modern financiers.
True, crypto still has a slight image problem among the general public, but that is a hangover from a bygone age and a sustained media campaign (one, you may have noticed as banks began to buy, that has curiously ceased). Crypto’s credibility, just like its asset value, is only trending one way - and that’s up beyond the stars.
The journey is still near the start though. Access to crypto is still spotty, especially in developing markets. Some governments are still imposing awkward legislation as they wrestle with the fact that even the biggest institutions within their borders are buying up swathes at a time.
Whether it’s South Korean pension funds, Norwegian sovereign wealth funds, or major global banks like Goldman Sachs and Morgan Stanley. Suffice to say politicians will begin writing crypto-friendly legislation before too long, and then the floodgates will really open.
The story has shifted from those cypherpunk beginnings though. Whereas once crypto was heralded as a fiat alternative, a way to break the banks and upend the politico-economic status quo, now cryptographic technologies, blockchain, and the crypto tokens that power them are being used for so, so much more.
Digital identity, sovereign data management, gaming, on-chain ownership, foreign exchange, real world assets, synthetic collateralization and - of course - fiat emulation. Indeed, and ironically, stablecoins that are pegged to fiat currencies are one of crypto’s most staggeringly effective use-cases to date. It’s just better cash. Nakamoto would be turning in his grave - if indeed he’s in it.
Stablecoins are ever increasing in size, usage and becoming a normal way to do business not just online, but every aspect of business. Learn more about USDT transfer times or the difference between USDC & USDT here.
The need for powerful, bespoke, sovereign crypto trading platforms for individuals and institutions has never been more acute. As the world's financial system moves on-chain and businesses seek to build fluid crypto access for their userbases, these exchanges are set to replace the banks as the marketplaces on whose axis the world’s turns.
So, why not get your own?
Historically, setting up a cryptocurrency exchange has been a complex process. But with the introduction of white-label solutions, it has become much more accessible. White label exchanges are turnkey solutions. Starting with a white label crypto exchange means you won't have to start from scratch. White-label cryptocurrency exchanges offer a quick and cost-effective alternative to traditional exchange development.
A crypto white-label solution typically encompasses highly a set of customizable features and dashboard to assist in the setup and launch of the exchange.
Normally, it would take a typical startup well over a year to create a crypto exchange with all the components above, costing businesses hundreds of thousands of dollars in developer fees.
Note, this doesn’t take into account all the complex technical variables, involved in your typical crypto platform like:
Due to the time, complexities, and cost associated with creating a crypto exchange, many companies decide to use white-label blockchain services as an alternative. In some cases it is the only option due to the difficulty hiring personal with all of the above mentioned skill sets. The talent pool is still very small as the industry is still relatively young.
Many fintech companies for example have opted into using open-source white-label solution that can be deployed in hours or days, rather than years, and is a relevantly low-risk way for them to start and to get their feet wet.
Exchanges can be geared towards various markets such as cryptocurrencies, crypto-collectibles, real-estate tokens, or even crypto banking and stablecoin issuance. The limitations are endless and it really comes down to the imagination of the team and business operators.
That said, here are 6 main reasons why you might want to launch an exchange today:
In one of Pantera Capital’s article, they for the first time publicly illustrate their investment strategy, and as the first and most successful innovative venture capitalists (VCs) in the blockchain industry, they very clearly state exchanges as one of the major sectors they allocated investment fund towards.
The pie chart illustrates a breakdown of Pantera’s investment strategy, which shows that most of their capital has been allocated towards crypto infrastructure and of course exchanges. These 2 areas are key as they will provide the core building blocks for pushing blockchain-based finance.
Whether investing or running your exchange yourself being part of the crypto infrastructure pie, as a long-term investment, is a winning business strategy, as well as a wise lucrative EV bet.
Did you know that in 2021 that people searched for bitcoin 7X more than for the dollar and 42X times more than for EURO? Also, did you know the word “bitcoin” appears every 3 seconds on social media? This volume suggests that people are becoming highly familiar with digital currencies and that slow mass adoption is silently brewing. However, with the increasing popularity of crypto trading, centralized exchanges have risen as the gatekeepers.
Because of this, top centralized exchanges, have the capacity to make cryptocurrency or token launches fail or succeed as they control a lot of visibility and access within the industry.
By starting your own crypto exchange, it will be easier to get listed on popular platforms like CoinMarketCap and CoinGecko that typically require that tokens or coins be listed on a minimum of 2 exchanges. The advantage of using a white-label instead of listing on some other exchange in which you have no control over the listing is 2 fold, one you will have much more control and guarantee that your listing will remain online and the cost will likely be much lower, especially over the longer term.
White-label crypto exchanges give power back to entrepreneurs by allowing them to get their business and tokens listed easier on platforms and popular coin listing websites, but also allow crypto startups to be in power and run their own global digital marketplaces.
With ready-made software, any fintech can instantly launch an exchange platform in minutes. The benefits of using a white-label crypto exchange solution boil down to 5 main points:
White-label exchanges have a much lower barrier to entry when compared to creating an exchange from scratch. This is why the upstart costs for a DIY exchange are considerably lower, saving new businesses up to 95% on the initial exchange upstart cost.
The most cost-effective way to get the most out of your white-label solution is to invest the time into researching and testing the white-label options available.
Many white-label solutions can be setup for free (when self-assembled & self-hosted). The innovative DIY exchange option is a great hands-on way to test the software of an exchange in all its glory, and one of the only ways a team can know if the software is right for them to purchase.
With this in mind, there are 3 main types of white-label exchange solutions out there. Here’s what you need to know:
Deciding on the type of white-label exchange comes down to the team’s capabilities to set up and run the software. Generally, the more support needed the higher the costs. Another deciding factor is the importance of generating profits.
For most business use cases, cloud exchange and DIY exchange are usually the best options. A cloud exchange, at an affordable month-by-month payment, is a good way slowly ease into the space without having to make any serious commitment.
In view of this, if you are looking for a long-term growth solution, then you will want a DIY exchange — whereby, you will have to organize the hosting of your exchange yourself. With that in mind, it is important to point out that you will need at least one competent tech member in your team as the exchange will now require a lot of server management.
If you need to launch quickly, then a white-label exchange provider like HollaEx which offers both the cloud and DIY solution is the fastest possible path and sports many affordable options. Simply follow the step-by-step exchange process and get your own branded crypto exchange in minutes.
The cost for white-label exchange software varies from $5,000 on the low-end, to $1,000,000 for enterprise solutions. It also depends if the solution is bought outright, or paid monthly (cloud exchange). However, for simplicity of this article, we will breakdown the costs for buying a white-label outright (cloud or rented exchanges would be cheaper):
When doing a price analysis on a crypto white-label, it is important to ask yourself, is this a business that can be sustained? Do I have enough working capital to sustain it? Similar to any business franchise, a bare minimum of $25,000 to $50,000 for working capital is required in order to operate any business smoothly. Depending on your team composition, this may of course vary.
White-label exchange prices vary, not only, due to the type of solution you choose (cloud exchange or DIY exchange), but also in relation to how much technical assistance you will require.
White-label cloud centralized exchange solutions often encompass additional fees, such as revenue sharing; or monthly fees for other services such as server maintenance.
One method to calculate if using a white-label exchange solution is worth your while is to estimate your team’s ability to build a regular website from scratch. For example, the industry standard for building a commercial website would hinge on the average hourly wage of all team members building the website.
As illustrated above, the typical cost to build a regular e-commerce website from scratch can range from $50,000 to $100,000. And, this is just a ballpark cost. It does not factor in the complexities and skills of programmers (ie. a regular web developer VS a developer with a specialty in blockchain, crypto wallets, and of course cybersecurity).
Crypto exchanges are inherently more complicated due to wallet management and security policies built around the wallets. These factors naturally increase the build costs of an online exchange platform. Generally speaking, it will take 6–8 team members to build a crypto exchange from scratch.
You will need the following people and skills in your team.
And, if you’re hiring people full-time from the UK, US, or Australia — then you could be expected to pay anywhere between $500,000 — $900,000 to hire a full team to build a crypto exchange from scratch.
It is important to note that the $500,000 — $900,000 build cost does not factor in other business aspects such as legal, marketing, crypto liquidity, market making, and server costs. Meaning, that the “hard cost” will exceed $1,000,000.
Depending on which route you take, if you’re hiring a full-time team to build a crypto exchange from scratch it will take a minimum of 4 to 8 months. However, using a white-label exchange software kit makes it possible to launch a cryptocurrency exchange in just 24 hours. These kits are easy-to-use for all sorts of team compositions and can help in getting an exchange up and running with the least complications.
However, it can be difficult to find a white-label solution that you can test in a hands-on way. Most white-label software solutions won’t provide the code to download test and tinker with, however, HollaEx’s white-label crypto kit is an exception with its open-source code freely available for anyone to take it.
Alternatively, you can also use the HollaEx exchange creation wizard on the HollaEx dashboard — zero coding exchange setup flow. After going through the steps you can run the exchange on your machine or you can ask to get your exchange hosted on the cloud automatically for you.
When it comes to the visual style of the exchange, most white-label solutions provide 2 default themes, one light, and the other dark. Much of the customization around the exchange’s visual appearance comes down to the flexibility of the solution. These differ greatly.
The best way to test this is to actually use a trial version of the software and see for yourself how simple it is to customize. Most crypto exchange themes will not allow the customer to try before they buy, but will rather, showcase a static demo that isn’t trading any real money. If this is the case then ask for a working live demo with real-life trades.
Nearly all crypto exchange templates can be obtained for a small cost in the $30-$150 price range. However, implementing these changes on top of an existing white-label isn’t always straightforward. These templates are still a practical way to guide your frontend and design team, however, but careful considerations should be taken when redesigning an exciting white-label orderbook, order entry and crypto wallets. These areas are highly sensitive areas and could lead to your users getting stuck or worse yet making mistakes due to some frontend bug.
One thing to consider when marketing your exchange is to separate the app/exchange part of the exchange and have your main landing page for your exchange's main communication landing page and marketing device. The landing home page can be built separately from your exchange and can be done in either WordPress or other web builders. For example, the trading can be handled on trade.exchange.com, while the home page can simply be exchange.com.
For example, a HollaEx-powered platform Bittilo.com comes complete home page while the inside is where the exchange software is active. This separation will also make it easy to hand off work to others to say build the landing page, while other work can proceed separately on the exchange/app side.
Separating the two main UIs like the home page from the trading page gives teams greater control and flexibility when changing content such as home page messages, articles, videos, etc, and can be done so through a dedicated CMS tool while separating concerns. Normally teams use a dedicated CMS system that can come at extra costs extra depending on your team's skills with tools such as WordPress or Wix.
Launching a white-label exchange should take the shortest time possible. That’s the whole point of using a pre-made crypto exchange kit.
Most white-label exchange kits can be launched in between 1–4 weeks. However, some white-label software kits such as HollaEx’s exchange kit can be set up in 15 minutes (with little tech know-how).
HollaEx is the fastest way to get your crypto exchange up and trading in minutes. First, sign up and log in to the exchange dashboard and complete the 5-step exchange setup wizard.
The HollaEx is not just the fastest white-label exchange launcher but also the most cost-effective since HollaEx has designed the white-label as an open-source and shareable solution from day one with built-in tokenomics. This makes HollaEx the only white-label available that actually uses its own technology to enhance the affordable and long turn viability of the software.
Choosing a cloud exchange or self-hosting exchange has both pros and cons. Here’s what you need to know:
Pros of using a white-label crypto exchange
Cons of using a white-label crypto exchange
If you are self-hosting using a DIY exchange solution, the major benefit is that your business will be much more self-reliant. This means, with little dependence on third parties you can run very lean and minimize overheads.
For teams with some expertise then going down the DIY route is the most cost-effective way with full control and security over the project. The higher skilled your team is the lower the cost to build the exchange.
If you don’t have a huge tech team, then using an exchange cloud solution will require some level of trust in the exchange provider to secure your exchange which is the major trade-off for the added benefit of speed, cost, and convenience.
With enterprise solutions, you gain full support from the exchange white-label solutions provider to expedite your project.
This includes extra labor hours for customization, and integration (payment on-ramp, etc), and will include specialized consultation from a dedicated team to see the exchange platform through to production, and the final handoff stage. This may include hands-on training to get teams up-to-speed with crypto tokenonmics design (staking, etc), security procedures, and best practices.
Enterprise white-label solutions are for a business that knows what they want, want it fast, and are willing to pay upfront for the consultancy, safety, and quality. With a high initial cost setup, you are essentially paying to get full rights to the exchange, which your solution will then be handed over to your team for eventually self-hosted, on-premise crypto exchange.
Today, it is even easier to start your own crypto exchange. However, with that being said, there are so many factors to consider: technology, costs, the quality of code, admin panel comprehensiveness, cloud-based versus remote hosting, and speed.
At HollaEx we’ve built our white-label to reduce the complexity around running a crypto business by creating our streamlined 5-step exchange dashboard setup. The dashboard includes everything from admin and hosting controls, to exchange quick launching and the ability for the platform to update in real-time when making changes.
As a way of showcasing the ease and flexibility of using a white-label exchange software, publicly announced and launched the HollaEx Pro Exchange on the 1st of January 2020 (However the development of HollaEx goes as far back as 2016).
The HollaEx Pro Exchange is a live crypto exchange that uses all of the key components inside of HollaEx’s white-label exchange software kit and is a great working example of the white-label in action.
Anyone can sign up, deposit, and execute live crypto trades on HollaEx Pro, it gives the full experience of what you can get inside of the crypto white-label kit, including your very own exchange crypto wallet and blockchain funds tracking system.
Another way to preview the use of white label HollaEx crypto exchange is to get in touch, and make a request for a live demo or examples from other business using the white label.