The Ins and Outs of Decentralized Exchanges DEXs

Native coins, which by definition have their own blockchains, are considered as superior to tokens, which are digital currencies that operate on other blockchain networks. Your cryptocurrency decentralized exchange platform should be easy to use and accessible for a wide audience of users. UI/UX solutions have a critical impact on how well your users interact with the system.

how to create a decentralized cryptocurrency exchange

Analysts at DEX Metrics report that as of July 2021, decentralized exchanges like Uniswap, PancakeSwap, and Binance DEX are handling about $15 billion in transactions each week. That’s less than 10% of overall crypto transaction volume, but the technology’s rapid growth and market acceptance are impressive. In principle, cryptocurrency exchanges are broadly distinguished as either centralized exchanges or decentralized exchanges .

What is the Safest Decentralized Crypto Exchange?

Under this mechanism investors lock funds in exchange for interest-like rewards which facilitate trades smoothly and any sort of transaction is settled directly on the Blockchain. DApps (also called “dapps”) are outside the purview and control of a single authority. Fully on-chain order book DEXs have been historically less common in DeFi, as they require every interaction within the order book to be posted on the blockchain. This requires either far higher throughput than most current blockchains can handle or significant compromises in network security and decentralization. As such, early examples of order book DEXs on Ethereum had low liquidity and suboptimal user experience.

how to create a decentralized cryptocurrency exchange

The main aim is to design a user-friendly and easy-to-navigate user interface with the help of experienced UX/UI designers and front-end developers. You may start by selecting a development company to build your centralized and decentralized exchange. Then you and the development company talk about the overall concept of the bitcoin exchange, which is used to produce the technical description of the project. Following that, you agree on the timeline, cost, KPI, and communication methods and sign a collaboration agreement. With a centralized crypto exchange, you entrust your cash to a third party who runs the exchange.

Cryptocurrency Exchange Design Best Practices

Crypto exchanges also support a range of fiat (government-issued) currencies. Crypto exchanges, even the top crypto exchanges, are largely unregulated by the U.S. Cryptocurrency exchanges in the U.S. must comply with the Bank Secrecy Act, which has requirements for registration, reporting, and customer data collection. Decentralized exchanges have become an integral part of many blockchain ecosystems. Inherently, blockchains are built for infrastructure that favors decentralization and power to the end user. Now more than ever, users are interested in self-custody and other benefits that arise from staying on-chain.

  • Is an off-chain, peer-to-peer decentralized crypto trading platform for buying and selling BTC in exchange for fiat and other cryptocurrencies.
  • Then this structure is modified according to your requirements and an individual trading engine is created.
  • They consider its goals and requirements like the expected performance and scalability.
  • Uniswap lets users lend their tokens to Uniswap’s liquidity pools and earn profits in exchange.
  • SpookySwap is one of the first Decentralized Exchanges running on Fantom using an Automated Market-Making protocol.

Cryptocurrency exchanges are the critical source of liquidity in the worldwide market. It allows buying cryptocurrency through direct peer-to-peer cryptocurrency transactions due to a secure internet platform without intermediaries. It is a departure from common centralized exchanges where, in a typical transaction, a third party takes over the people’s funds and controls the anonymity and transfer of assets through the two sides. Since decentralized exchanges have no governing body looking over the functioning of the exchanges, all funds and currency that moves over the network is controlled by the users themselves. The participants in the platform have complete control over their funds.

#How to Create a DEX

Documentation of the work performed is stored online and delivered to customers’ inboxes for always-on access to service history. Online communication and coordination between field technicians, the home office, and the customer make each appointment more professional. The Binance API allows exchange users to transact on the platform using third-party apps.

how to create a decentralized cryptocurrency exchange

Each of these components is a crucial part of creating your own crypto exchange. And each of them matters both separately and in interaction with the others. So the way you define the connections between those layers affects data processing speed, page loading, the maximum possible number of orders, and the platform’s capacity. The cost of their services will vary significantly depending on several factors.

Option 1: Create your own blockchain and native cryptocurrency

They allow users to instantly exchange one cryptocurrency for another thanks to access to the best rates of trading pairs. Instant crypto exchanges typically aggregate prices and liquidity from multiple custodial trading platforms. These platforms offer easy registration with a simple exchange UX. Instant crypto exchangers receive and deposit funds directly to users’ wallets. Thus, whenever you think about how to build a decentralized cryptocurrency exchange, you must look into adding all of the aforementioned features into your exchange.

how to create a decentralized cryptocurrency exchange

So, thanks to decentralized exchanges, we can execute financial transactions without banks, brokers, payment processors, or any other type of traditional intermediary. Is a decentralized exchange that has 8 supported blockchains, including Bitcoin. Based on the Cosmos software development kit , it uses an automated market maker model to swap digital assets across blockchain networks in a non-custodial manner. By enabling cross-chain swaps, THORChain empowers crypto traders to move digital assets across ecosystems without relying on centralized entities. There are several interfaces that integrate with THORChain’s technology, including THORWallet. On a decentralized crypto exchange, liquidity is dependent on the amount of tokens locked within a liquidity pool.

What are some popular DEX features?

In an industry where being first to market is critical, speed is essential. Rejolut’s rapid prototyping framework is the fastest, most effective way to take an idea to development. It is choreographed to ensure we gather an in-depth understanding of your idea in the shortest time possible. This is one of the most sought-after features found in DEX, where users are not required to fill out any know-your-customer forms.


Fintech software developers have vast experience building fintech solutions that prioritize security and convenient user experience. Let’s talk about your fintech idea, the most suitable technologies for your project, and the scope of the work to create a clear roadmap for building a champion crypto trading solution. Whatever type of crypto trading application you are planning to create, the development of the front-end part will be almost the same.

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