The Definitive Guide To White-Label Crypto Exchange Solutions
Fidelity has over $9.6 trillion of assets under management, serves 40 million investors, and is one of the largest managers of wealth. Recently, the company shared opened up commission-free retail trading for Bitcoin and Ethereum. They even allow as little as 1 dollar trades. If this isn’t a sign of things to come then I don’t know what is. The fact that Fidelity, after all the turmoil with FTX, turned around and opened up for Bitcoin retail trading of all things just shows the appetite for the crypto business.
Fidelity also harbors some big views on money itself and here’s what they had to say:
“...bitcoin will be the currency to obsolete all others [monies].”, with that being said, you could say that Fidelity, one of the biggest money managers, probably would know a thing or two about money and its future.
The tweet shared by Fidelity was in response to an article published by Unchained Capital, a group that put forward an argument that bitcoin and cryptocurrencies will naturally make money (fiat) obsolete.
Unchained Capital’s flowchart representation of crypto world domination
If bitcoin is the next evolution of money and trade, then this begs to question who will be the greatest beneficiaries of this technology? Naturally, the answer lies within crypto exchanges that are capitalizing on cryptocurrency trading by investors.
Think about this for a second, if bitcoin and crypto are able to replace money (fiat) and make it obsolete as Unchained Cap thinks, then in effect, crypto exchanges have the potential to make banks obsolete and dominate the world financial markets.
“And this is despite market headwinds. Institutional investors surveyed in the U.S. and Europe reported increased familiarity, improved perception, and more digital asset investments.”
This is why more crypto exchanges exist today. And, this trend will only continue to rise due to the increased familiarity, improved perception, and more mature investment opportunities in the space. If you’re considering opening up your own white-label crypto exchange, our in-depth guide covers everything. Here’s what you need to know.
What is a white-label exchange?
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.
A few of the key components of a white-label include:
- Various trading pages:
Orderbook, price history chart and a list of tradable crypto markets.
- An admin dashboard:
Or back office central control panel system.
- User wallets:
The heart of any exchange is a crypto wallet which stores all the digital assets and helps monitor various blockchains to track incoming deposits and outgoing withdrawals.
- Trading pair market setup:
A means to connect digital asset with one another for the purpose of pricing and market creation. For example BTC/USDT or YOUR-COIN/USDT.
- A trading engine:
Should be able to execute market and limit buy/sell orders, and source the crypto liquidity accurately on the backend. The engine could be connected to an orderbook and/or OTC style system.
- Third-party KYC/AML systems:
Built-in user identity system to obtain and safely store personal user info for Know Your Custom and Anti-money Laundering business protection and regional compliance.
- In-built affiliate and referral systems:
Allow userbase to easily share and referee their friends and family through incentives. System to track and monitor each user's referral count and their expected reward. This can be rewarded through trading fee profits generated by each user they invited that is generating activity.
Provide extensive language optionality through the platform. Users should be able to select their own language preferences through the setting. Custom localization features could also include the ability to adjust the content of the platform pages and forms to fit the target local audience.
- Fiat on/off ramping and other integrations:
The white-label crypto system should allow also allowed for traditional fiat currency systems (fiat on/off ramps) to be integrated and connected. This could come in the form of access to Bank or payment-provider API access, and/or even other blockchain services.
- Hosting and server management:
Many white-label crypto system will also include a cloud service (server hosting) with easy-to-use domain name and email connection dashboard allow you to launch quickly on a website you control.
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:
- Finding/hiring quality programmers familiar with trading
- Finding programmers with real blockchain development experience
- Debugging code issues
- Project management
- UX/UI design
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.
Why are cryptocurrency projects launching their own exchanges?
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:
- As a new business:
Having a critical piece of the crypto-financial infrastructure can be a good long-term bet as the industry is still growing and in its nascent stages. Starting early and garnering trust with your customer base when it comes to crypto is a long-term investment that can only be done by establishing yourself as a reliable crypto broker over time.
- To get a coin/token listed:
For projects that have a token or coin, they can use a white-label exchange solution like HollaEx to immediately run your own exchange. This helps new cryptocurrencies increase their chances of being listed on popular sites like CoinMarketCap (CMC).
- Avoid exchange fees:
To list a new cryptocurrency on an exchange can cost as little as $5,000, or, for more well-known exchanges, the cost can be anywhere between $100,000 up to $500,000 on premium exchanges. As a result, opening up your own crypto platform for listing your exchange is the only sure way to bypass expensive exchange fees. This has the added benefit of more control over your token and makes for easier tokenomics planning and design.
- Launch and distribute an internal exchange token that is not on the blockchain:
This type of exchange can manage all of your accounting and thus defer the complications of dealing with a blockchain. This is also known as an internal virtual token and can be a good place to start without having to deal with the inimitability of blockchains.
- Expand an existing business:
One way to look at an exchange is that it is like having your own Excel spreadsheet with real money running through it, and many traditional financial or even non-financial businesses are upgrading their existing infrastructure to take advantage of this powerful fact. By using crypto and blockchain-powered white-label tools, this business can begin crafting and offering new services to their customers and thus open new business opportunities.
- Serve the underserved:
There are still many countries with limited digital asset access. Many countries are suffering from world record-breaking inflation and simply offering an exchange where they can store their wealth in other stable assets like USDT or even Bitcoin is a valuable service with high business growth opportunities.
Is a crypto exchange a good investment?
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.
Why does it make sense to create your own crypto exchange?
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.
What are the benefits if you buy white-label crypto exchange software?
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:
- Time & cost: You can avoid spending endless hours assembling a development team to build your exchange and put the funds saved towards legal and business operations.
- Speed: You can instantly get the exchange up and live. The very best white-label exchanges can be deployed via the cloud in minutes.
- Security: The most important part of an exchange is security. Unless your team has cybersecurity experience, then outsourcing it to experts is a no-brainer.
- Focus: White-label exchange solutions allow teams to spend less energy on technicalities and teams to refocus on sales, growth strategies and important marketing decisions.
- Support: white-label exchange provided have the added benefit of tech support. This can be the saving grace of many businesses that lack a tech team.
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.
What are the best types of white-label crypto exchange solutions?
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:
- Cloud Centralized Exchange: Your typical cloud exchange is where the exchange is hosted and the servers are managed by the white-label provider or another party. Cloud exchanges will charge a cloud hosting fee and may even have a one-time initial server setup fee, and ongoing server fees. Cloud exchanges come in all shapes and sizes, but typically can run $1,000s to $10,000s a month depending on the complexity of the system.
- Do-it-yourself Exchanges (DIY exchange): DIY centralized exchanges provides you with all of the parts and tools that are required to launch and run the exchange. This means that you’ll have complete hosting control over your exchange business and you will have to manage the servers like (eg. Amazon Web Services). Prepacked DIY exchange kits can already be conveniently found buddled with the exchange software on AWS and DigitialOcean, making for easy work.
- Do-it-yourself Decentralized Exchanges (DIY DEX): Decentralized exchanges run on smart contracts. Many startups start by forking exciting DEX code like Uniswap. A DEX will also automate trade matching and wallet management in a decentralized way, however, will require a lot of tech setup in order to be customer-facing ready.
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.
How much does a white-label crypto exchange cost?
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):
- $5,000 for low-end (may exclude certain blockchains)
- $100,000s mid-range
- $1,000,000s enterprise solution (may include payment-provided integrations for fiat or other assets, and other advanced features)
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.
Technical assistance & price
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.
- Cloud Centralized Exchange: Prices can run as low as $700 a month to $10,000s. On the high end, prices can exceed $10,000 monthly, depending on how much your business requires technical assistance. It is important to note that cheaper options tend to have some sort of revenue share model added on top of the monthly cost, this is typically geared towards targeting an exchange operator that already has a large userbase and brand, opting into a business deal to make a percentage from future revenue generated from the future growth.
- Do-it-yourself Centralized Exchanges (DIY CEX): Ranging from free to $10,000 for extremely basic, to $100,000 for mid-range to $1,000,000 for high range well integrated exchange. As prices do vary, it can be tricky to know what you are getting and so it is always good practice to check if the exchange software is open-source or not, this generally means that the software has been battle-tested and is of high-grade quality code.
Cloud centralized exchange fees
White-label cloud centralized exchange solutions often encompass additional fees, such as revenue sharing; or monthly fees for other services such as server maintenance.
- Revenue sharing: Some exchange cloud services may include a revenue-sharing model in which a percentage of your profits generated from trading fees will go to the white-label provider.
- Monthly fees: For server maintenance, which may have a 6-month or 1-year upfront cost.
Is it cost-effective to use a white-label solution?
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).
How many programmers are required to build a crypto exchange?
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.
- Front-end dev + designer: 1–2 people
- Back-end developers: 3 people
- Dev-ops engineer: 1 person
- Cybersecurity expert: 1–2 people
- Agile project manager: 1 person (optional)
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.
How long will it take to build a crypto exchange?
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.
What types of crypto exchange themes are available?
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.
How long does it take to launch a white-label crypto exchange?
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: A step-by-step guide to getting your crypto exchange up and running in minutes
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.
What are the pros and cons of a white-label crypto exchange software solution?
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
- Speed: Rapid deployment and getting to market faster.
- Convenient: Greater convenience and flexibility.
- ROI: Higher return on investment for not having to rebuild the wheel again. Continues tech upgrades.
- Lower costs: Reduces labor costs when compared to building the tech from scratch.
- Security: Building on battle-tested software that is secured by a team of tech specialists.
Cons of using a white-label crypto exchange
- Design options: The design options can be limited within the exchange kit. Some exchange white-labels will require teams to invest significantly in a front end and a design in order to have their brand through default white-label exchange appearance.
- Long-term support: Depending on what solution you use the provider may not provide support. This however can be nullified with open-source solutions which will continue to operate and can be built upon indefinitely.
- License: There can be complicated licenses and compliance (depending on the country).
- Control: Since the tech is outsourced there will naturally be areas where control has to be given up.
- Flexibility & high switch cost: There can be difficulty changing from one white-label exchange to another after building the business. This is why it is important for you to select the best, most open white-label exchange software.
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.
What do you need to know about the white label HollaEx exchange system?
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.
Want to start your own crypto exchange today?
Sign up and set up your exchange for free here, or schedule a live demo walkthrough.
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