What is the General Commercial for End to End Operations?
Do you want to know the end to end cost of starting a crypto exchange business? If yes, we can help you. Due to the success of Bitcoin and introduction of all the other cryptocurrencies, many companies are launching their own exchange platform.
An exchange platform is a place where buyers and seller come together to trade crypto. Establishing an exchange platform is not an easy task. You have to go through the various process to launch an exchange platform. You have to apply for a legal license, use the right technology, choose a hosting server, find efficient team members, build an office and use marketing techniques to promote tour exchange business.
If you are planning to launch an Exchange platform, we can help you. In this post, we will discuss about the end to end cost for the operation of an exchange platform.
Crypto Exchange Platform
It is an online platform. Here you can trade one digital currency for another. Exchanges act as a link between buyers and sellers. The buyers and sellers can exchange one cryptocurrency with others on the basis of the market value. While most of the exchanges only deal in crypto, some exchange platforms provide crypto to fiat trading as well.
Exchanges are different from crypto wallets. Wallets are only used for purchasing and storing cryptocurrency. There are two types of crypto exchanges, i.e. centralized and decentralized. While centralized crypto exchanges are managed by a company which is a third party, there is no central authority in decentralized exchanges. This platform works completely on blockchain and smart contracts.
Example:
Binance is one of the popular centralized trading platforms. On the other hand, Binance DEX is a decentralized exchange platform. If you want to start an exchange platform, you can launch your own centralized cryptocurrency exchange platform.
End to End Cost for Crypto Exchange Platform
Here we will show you much does it cost to start your own crypto exchange platform. We will divide the cost as per each component that is required to develop the crypto exchange platform.
Legal License Cost: In some countries, you need to apply for a legal license in order to start your own crypto exchange business. This way, you will be able to launch licensed crypto exchange for trading. It will help you to build trust and create brand awareness. You need to follow the rules and laws of the country where you operate from. The cost of the license is different for each country. In Europe, you need to pay 3000 EUR as a license fee. In the US, you have to pay $500 to $5000 depending upon the types and size of the exchange platform.
· Technology Cost
If you choose a white label cryptocurrency exchange platform, you don’t have to develop your own technology. You will get ready-made software. But id you want to develop the exchange from scratch, you have to develop the exchange website as well as applications. The exchange platform functions on technology. You need to get in touch with exchange software development companies. These companies will help you to develop your exchange platform. It normally takes 4 to 6 months to develop a web-based platform and mobile application. Here is the cost structure.
· Back end development: In the US, the cost is $65 per hour, and in Europe, the cost is $35 per hour.
· Android Development: In the US, the cost is $65 per hour, and in Europe, the cost is $35 per hour.
· iOS Development: In the US, the cost is $70 per hour, and in Europe, the cost is $40 per hour.
· Front-end Web Development: In the US, the cost is $55 per hour, and in Europe, the cost is $35 per hour.
· Graphic Design: In the US, the cost is $40 per hour, and in Europe, the cost is $20 per hour.
· QA Engineer: In the US, the cost is $35 per hour, and in Europe, the cost is $15 per hour.
· Project Management: In the US, the cost is $55 per hour, and in Europe, the cost is $25 per hour.
So the total cost to get the technology in the US is $403,200 and in Europe is $196,800.
· Custody Solution Cost
After getting the right technology, you need to choose a custodian or a custody solution for your exchange business. The Custody Solutions stores all the crypto assets with them. They provide storage and security. All the crypto assets are stored with them for trading. As you cannot store all the crypto with you because of security issues, you need to take the services of custody solutions. Popular custody solutions are Gemini, Coinbase, etc.Coinbase’s fees is0.5% on $1,000,000. Apart from this, they may also charge $0 to $10,000. Gemini charges 0.4%.
· Server Hosting Cost
You also have to pay for server hosting. Once your website and application are ready, you need to use server hosting to make your website and app available for others. The server provider will give you their platform to host your website and app on the internet. Without hosting the traders cannot access to exchange platform. There are many server providers that provide safe and secure infrastructure on which you can run your trading platform. You can also choose a dedicated server hosting. It will help in the speedy transaction. For dedicated server hosting, you will be charged approximately £246per month. You can also choose cheap hosting services which costs less money.
· Team Management Cost
The team management cost is not fixed. It mostly depends on the number of members working in a team. If you need more team members to run your crypto exchange business, the cost will increase. You have to pay monthly salaries to your team members for successful running a crypto exchange platform. You will need legal advisors, website managers, IT team and developers. The cost of the team change depending on the country. It is totally up to you. You can make a budget and then select a management team.
· Office Setup Cost
You need to set up an office where the team can work. Although most of the work is done digitally, you need to set up an office. The normal cost to set up an office, usually depend upon the office space, rent and the furniture and devices you will need. It can cost from $20,000 to $30,000 a year.
· Marketing Cost
When you start a new crypto exchange business, you need heavy marketing. There are already well establish exchanges in the market. If you want to create brand awareness, you need to spend a good amount of money on marketing your exchange website and app. You can use various digital marketing techniques. The cost depends upon you. Some companies spend $1000 to $5000 whereas some spend $10,000 to $15,000 on marketing campaigns.
· Security Solutions Cost
The most important part of a trading platform is its security. Due to recent scams, people have become averse. They will only choose your platform if it provides high security. Security solutions can cost around $2,000 to $20,000 per month. It depends upon the security package you choose.
· Match Engine Cost
A match engine is the heart of a trading platform. It helps to match buyer’s and seller’s order. You have to use a match engine software in your trading system to match the trades. The average cost of match engine development is not known. It depends upon the types of engine you need. You can check with the developers to know the exact piece.
Overall Operations Cost
So, to start a crypto exchange platform, you need to invest at least $100,000. The overall operational cost may go up to $500,000. It depends on the factors you need to include in your trading platform. The type of trading platform also affects the price.
So if you are planning to launch a trading platform, you have to incur all these costs. If you want to avoid all this hassle, you can approach companies who provide white label crypto exchange software development. You don’t have to incur all these costs, you can directly pay for the software.
