Are you considering launching your own cryptocurrency exchange? There are two distinct routes available: building one from scratch with proprietary software developed by your tech team or opting for the more convenient white label crypto exchange solution. But which one is more suitable for your specific needs?
This article will delve deep into the contrast between on-premise and white label cryptocurrency exchanges, allowing you to make a knowledgeable choice.
What is a White Label Solution?
Are you familiar with the term “white label”? If not, allow us to explain.
White-labeling is an excellent way for companies to provide their customers with products or services without investing in developing and producing those items. It is a process where one company creates a product, which can then be rebranded by another company. This allows businesses to save resources and time while still delivering quality services to their end customers.
In the financial markets business, a white label cryptocurrency exchange solution means that one company, a provider, offers its own developed software solution to another company, usually a broker. The provider has already created the entire infrastructure, and they also provide all of the updates. This leaves brokers with a fully customized platform that is ready to use right away.
What Does It Take to Develop an In-House Crypto Exchange?
If you want the utmost control over your exchange’s design, features, and functionality, then consider a crypto exchange setup with on-premise software. This requires a hefty investment of time and resources to create from scratch, but after that, it is yours to customize however you want to!
You’ll have complete management and autonomy as all code, back office systems, and user interfaces will be created by your own tech team. If any modifications or updates need making down the line, you can do this yourself as well – no third party is required.
Nevertheless, it is necessary to assemble a well-versed team who knows precisely what they are doing. They must be adequately informed of all regulatory and compliance requirements in order to establish an exchange that operates within the law, as well as have proper technical expertise for constructing a safe trading platform.
Advantages and Disadvantages of White Label Crypto Exchanges
White label solutions are quickly becoming the popular choice for those entrepreneurs who lack either the necessary funds or skills to craft an exchange themselves. But do these services live up to their hype? Let’s explore both sides of this coin and discover their pros and cons.
- Advantages:
Quick and Easy Setup — White label solutions are much faster to get up and running than building an exchange from scratch. This is because the infrastructure, software solution, and updates are all taken care of by the provider.
Easily Customizable — White label software can be tailored to your exact needs.
Little to No Technical Expertise Required — The developer team of the provider will handle all the technical aspects of setting up and running the exchange, which means there is no need for you to have any technical expertise. However, the knowledge of basic programming and blockchain technology is always an advantage.
Reduced Time to Market — It is much faster to start a Bitcoin exchange with a white label approach than to build one from the ground up, which can take months of development and testing to get it up and running.
Regulatory cCompliance & Maintenance Handled by the Provider — By entrusting a reliable provider to take care of all the regulatory and compliance issues, as well as regular maintenance requirements for your exchange, you can rest assured that your platform will operate without any disruptions.
Cost-Effective Solution Over in-House Development — If you are an entrepreneur or a smaller startup, then building an in-house exchange can be too costly and time-consuming. A white label solution is the perfect cost-effective alternative for those who want to launch their own crypto exchange without much effort.
- Disadvantages of WL:
Limited control over the trading platform — The provider will have the ultimate control over your software solution and updates, leaving you with minimal authority to customize the design and features of your exchange.
Customization is still limited — The customizable options for white label crypto exchanges are usually quite limited compared to what you could achieve with an in-house platform.
Advantages and Disadvantages of On-Premise Crypto Exchanges
For larger entities considering a crypto exchange solution, in-house exchanges can be an excellent route to take. Yet it’s essential to assess the pros and cons of this alternative before making your final decision.
- Advantages:
Complete Control & Autonomy Over the Exchange Platform — By building an in-house exchange, you are granted absolute authority over your platform’s design, features and security protocols. This provides your team the opportunity to customize the system according to your business vision.
No Third-Party Service Providers Needed — All the related expenses of establishing and running the platform are managed internally, helping you save money over time.
Better Visibility into Security Protocols — By operating an in-house exchange, you will be able to deeply comprehend and scrutinize the security protocols of your platform. However, this is the case if your venue has robust security measures to hold users’ crypto.
- Disadvantages:
High Upfront Investment Required — Compared to white label solutions, in-house exchanges necessitate a sizable initial investment due to the cost of software development. Additionally, you must construct the necessary infrastructure and employ professional personnel who can see this undertaking through.
Technical Expertise Needed to Develop & Maintain the Platform — Constructing an in-house exchange software requires a wealth of technical skill, programming proficiency, and experience. Additionally, this system needs to be routinely looked after by a knowledgeable group in order to guarantee it is running smoothly at all times.
The Time-Consuming Process of Setting Up and Testing the Exchange — Setting up and testing an in-house exchange is a complex process that can take from weeks to months.
Complicated Regulatory Compliance Process — Your exchange must abide by the pertinent regulations of your jurisdiction. This can be an intimidating and prolonged affair that requires extra attention from professionals with legal expertise in this field.
Final Words
To sum up, the selection between white label crypto exchanges and in-house exchanges is ultimately determined by an entrepreneur’s objectives. If you have the technical know-how and funds to build an in-house platform on your own, then it can be a rewarding choice.
On the other hand, if you’re searching for a fast launch of your own digital currency exchange with minimal commitment and money necessary, then utilizing a white label solution would be best suited to achieve this goal!
