Did you know that developing cryptocurrency exchanges has now become a profitable business for startups and entrepreneurs? The reason for the hype surrounding the development of these cryptocurrency exchanges is the massive growth in market size. According to cryptocurrency statistics, the market size of cryptocurrency platforms will reach $118.12 billion in 2028.
This has encouraged numerous potential startups to enter the cryptocurrency space through cryptocurrency exchange businesses. However, many new startups are confused about the execution and development process. Additionally, some are unclear about the revenue generation streams of the exchange itself. Right now, if you too are in this great mess, you have arrived at the perfect place.
Is owning a cryptocurrency exchange profitable?
Great yes to your question! Before we dive into the business benefits of cryptocurrency exchanges, let’s be clear about this. A cryptocurrency exchange is a platform where you can safely buy, sell, and trade blockchain-based cryptocurrency. The need for feature-rich cryptocurrency exchanges has grown rapidly for various cryptocurrency purposes.
But you might ask how a startup can earn enough revenue simply by enabling cryptocurrency trading features.
Owning a cryptocurrency exchange platform allows you to make money through a variety of means. Your revenue streams will vary depending on your business needs and marketing strategy. Some of the common profit harvesting streams are:
Through transaction activation
For each transaction, the cryptocurrency exchange deducts a certain amount from users and buyers. Transaction fees are calculated based on the cryptocurrency selected by the user and the trading function mode. The average transaction fee is 0.1-0.2%. This may seem small, but this small amount brings huge profits to cryptocurrency exchange owners.
For cryptocurrency listing
New ICO, STO and IEO cryptocurrency projects are launched every day. And they introduce new cryptocurrencies to the market. Cryptocurrency exchange platforms list new tokens for liquidity purposes. Listing fees may vary depending on the token’s reputation, value, and future price predictions. Startups launching cryptocurrency projects are always ready to offer millions of dollars to list new cryptocurrency tokens.
Through cryptocurrency withdrawal
If a cryptocurrency user wants to withdraw their cryptocurrency and store it in a cryptocurrency wallet, they must pay a certain amount. Due to these withdrawal fees, cryptocurrency exchanges are earning higher profits every day.
IEO Launchpad
An IEO (initial exchange offering) is almost identical to an ICO (initial coin offering). However, the only difference is that IEO distributes tokens on the cryptocurrency exchange market. The cryptocurrency exchange itself is responsible for selling the corresponding cryptocurrency tokens. To carry out this project, the cryptocurrency exchange gets enough money. In addition to profits, cryptocurrency exchanges can also gain a large user base.
Currently, IEO has become a potential alternative to the ICO crowdfunding method. IEOs are completely transparent and risk-free in terms of profit generation. Therefore, the demand for IEO launchpads is greater among startups.
To recommend new users
One of the best marketing strategies for cryptocurrency exchanges is to pay existing users to refer new users. Through this, the exchange collects lifetime listing, trading, deposit and withdrawal fees. So you get users and revenue at the same time.
Simply put, each referring user will bring in potential cryptocurrency users. Through this, lifetime listing, trading, deposit and withdrawal fees are collected. This generates users and revenue.
Cryptocurrency staking and lending
Just like banks and other traditional finance, cryptocurrency exchanges also help you borrow and stake your cryptocurrencies. To securely stake crypto coins and crypto tokens. Through this, the exchange collects a fee. Staking fees vary depending on the cryptocurrency coins, amount of tokens, and staking period.
In contrast, a loan refers to providing a loan using cryptocurrency as collateral. The borrower’s cryptocurrency can be accepted as collateral. If the borrower fails to repay the debt, the lender can seize the cryptocurrency.
Profit through yield farming
Yield farming is an ideal function that is slightly different from the staking function. Here, cryptocurrency users can stake or lock their cryptocurrencies and receive rewards. This feature quickly increases trading volume on cryptocurrency exchange platforms. Additionally, the liquidity of cryptocurrency has increased.
advertising
Cryptocurrency exchanges display ads related to different cryptocurrencies to generate sufficient revenue. Private advertising also plays a big role in generating profits.
premium service
Premium subscription allows users to enjoy some additional features, benefits, and other features of the cryptocurrency exchange platform. Users pay a premium service subscription fee on a monthly or annual basis.
Cryptocurrency exchanges make huge profits through these factors that help take their cryptocurrency business to the next level. Therefore, this is living proof that developing a cryptocurrency exchange is profitable. Therefore, developing a cryptocurrency exchange with various features would be an ideal business idea. But you might have your doubts…
Where should an exemplary cryptocurrency exchange platform be developed?
Coinclone Cryptocurrency exchange development company We help you create your own custom cryptocurrency exchange. Our developer team has ample experience in developing full-fledged cryptocurrency exchange platforms, so you can contact our team without regret. Our team of developers, blockchain experts, UI/UX designers and technical experts are always ready to meet your needs.
You can create an exchange from scratch or purchase a cryptocurrency exchange clone script from us. We provide the best of both services. Our exchange replication scripts are affordable, reliable, and customizable. In addition to exchange development, we also provide cryptocurrency token development, cryptocurrency payment gateway development, and other blockchain-related services. Don’t waste your precious time. Talk to an expert and get a live demo!