Evaluating The Growing Business Of Hybrid Crypto Exchange Development
- Hybrid Crypto Exchange Development combines the speed of centralized exchanges and the reliability of decentralized ones.
- It will be based on the liquidity of centralized platforms and the confidentiality of decentralized platforms.
- They offer both fiat-to-crypto and crypto-to-crypto trading pairs.
For a long time, Centralized and Decentralized cryptocurrency exchanges have dominated the market. While centralized platforms are known for their sufficient liquidity and enabling fast transactions, decentralized platforms are popular for maintaining a high level of anonymity and being hack-proof.
Centralized exchanges are facing challenges in the form of frequent hacking attacks and charging hefty transaction costs. Decentralized exchanges are incapable of handling high-frequency trading and can become hotspots for malicious activities as they do not follow KYC (Know Your Customer) and AML (Anti Money Laundering) regulations.
A Hybrid Cryptocurrency Exchange combines the positive aspects of both centralized and decentralized platforms and addresses the issues by focussing more on the usability and liquidity of centralized exchanges and the anonymity and protection of decentralized exchanges. They accept payments made in the leading fiat currencies and have numerous coins listed on their platform.
The multiple advantages offered by Hybrid Crypto Exchange Development are
- Users can trade either on centralized or decentralized platforms according to their wish.
- Users will have complete custody of their funds even if third parties may regulate the cryptocurrency exchanges functioning on a hybrid platform.
- Users’ funds or assets are not held in hot wallets but kept in secure cold storage facilities. They have exclusive access to their own private keys. Hence, cyberattacks on hybrid cryptocurrency exchanges are very rare or impossible to occur.
- They ensure the highest level of user privacy and are compliant with different laws laid down for regulating digital currencies.
- They use a highly scalable architecture positioning themselves as the future of cryptocurrency trading.
The operating mechanism of a Hybrid Cryptocurrency Exchange Solution
- A user decides to sell his cryptos and another user wants to buy some cryptos through the platform.
- All the incoming order requests will be processed after encrypting it in a Hybrid Cryptocurrency Exchange.
- The trader can transfer his private keys to the order pool to decode the instructions and send them to the corresponding matching engine.
- The immutable blockchain network will monitor all the paired trades between different users on the platform.
- After the trades have been successfully conducted by the users, their respective cryptocurrency balances will automatically change.
The common features present in a Hybrid Cryptocurrency Exchange
- Liquidity management — To improve the flow of crypto trading on the platform, all the information about the order book will be fetched from a leading third-party exchange in the market.
- Presence of an escrow system — It will act as an unbiased middleman between the buyers and sellers while they close deals and ensure stability while transferring funds.
- Atomic swapping facility — Traders can use a private wallet to exchange digital currencies directly without the intervention of any third parties by using the in-built atomic swapping option.
- Fast execution of transactions — Authentication of the highest standards are incorporated into the platform to ensure seamless processing of transactions in a fully secure environment.
- Availability of a robust admin panel — A customized admin and an intuitive user dashboard will keep close control over the daily operations of the platform.
The other features include a friendly trading interface, the presence of two-factor authentication as an advanced security measure, integration of numerous payment gateways into the platform, real-time notification service to inform any important alerts to the users, and advanced smart contracts.
The process to keep in mind while involving in Hybrid Crypto Exchange Development
- The business requirements have to be analyzed thoroughly and the roadmap of the product in the marketplace should be determined in advance.
- The integration of blockchain technology and smart contracts into the platform needs to be thought of after taking into account the technological feasibility required as it has to combine the functionalities of both centralized and decentralized exchanges.
- The software has to be completely bug-free before deployment on the main network.
- Post rigorous quality testing has been done, it can go live on the production network. Technical support in numerous languages should be provided round the clock to ensure that there are no operational glitches.
The future expectations for a Hybrid Cryptocurrency Exchange Solution
They are slowly gaining popularity and represent the newest form of cryptocurrency trading. It harmoniously blends between the centralized and decentralized elements. It remains to be seen if it becomes a full-fledged player in the growing cryptocurrency market. It needs more cooperation from the investors along with better trust from the users. Many Hybrid cryptocurrency exchanges like Qurrex, Eidoo, and Stoxum are in various stages of implementation and challenging big centralized exchanges by offering lower gas costs, faster transaction processing, and having an aggregated liquidity pool.