8 Must-Have Features of a Cryptocurrency Exchange

KEY TAKEAWAYS

Since every crypto exchange platform is different, it's crucial that traders select platforms based on their trading needs or on the specific features of the platforms.

A cryptocurrency exchange allows users to store, buy, and sell tokens and coins. People use these because they consider them secure and reliable for safe cryptocurrency trading.

However, since every platform is different, it is important that users select them based on their trading needs or on the specific features of the platforms.

Types of Cryptocurrency Exchanges

  • Centralized Crypto Exchange (CEX)

The CEX platform enables users to quickly trade different cryptocurrencies. These are controlled by central authorities that manage their operations, so users have to trust that the exchange will keep their digital assets secure. The platforms offer crypto-to-crypto and fiat-to-crypto trading.

CEX platforms offer familiar and user-friendly trading interfaces and, as such, are generally easier to use than decentralized crypto exchange platforms.

  • Decentralized Crypto Exchange (DEX)

With the DEX platform, there is no central authority managing funds. Rather, crypto traders complete transactions with each other directly. DEX platforms rely on blockchain technology as well as smart contracts to allow peer-to-peer crypto asset trading.

  • Peer-to-Peer (P2P) Crypto Exchange

The P2P exchange platform also eliminates the need for a central authority and, as such, allows traders to buy and sell crypto with each other directly. Some of the top P2P crypto exchange platforms offer buyers and sellers a safe experience.

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Transactions on P2P exchanges may be slower than on other exchanges because they use escrow services to ensure funds are secure.

  • Hybrid Crypto Exchange

These exchanges combine the benefits of CEX and DEX platforms. Hybrid crypto exchanges let users trade crypto assets on centralized platforms. They also provide the benefits of decentralized trading, including control over funds and enhanced security.

Eight Must-Have Features of a Cryptocurrency Exchange App

There are some features that every successful cryptocurrency exchange app should include. These features improve the functionality of the platform and the trading experiences of the users.

1. Trading Engine

At the core of the cryptocurrency exchange app is the trading engine. A trading engine tracks the bids and opens orders, generates new trades, manages access to order books, balances calculations, matches offers and bids on the cryptocurrency exchange platform, executes crypto transactions, and more.

2. Administrative Console

The administrative console allows exchange owners and operators to handle various operations of the crypto exchange platform. Any exchange can customize the admin console with different capabilities; however, features should include addressing issues related to support, editing trading fees, debit or credit funds, adding new currencies, and handling crypto listings.

3. User Authorization and Verification

Every crypto exchange platform should make the user onboarding experience simple and interactive. Verification is also a key feature of cryptocurrency exchange apps as it helps to minimize fraud and ensures the transparency of transactions. Crypto exchange apps should integrate with anti-bot verification and two-factor authentication so users are sure that their data is secure.

4. Accessibility

One of the main features users should consider when they choose a cryptocurrency exchange app is accessibility, as they may be able to access some more easily than others because their use isn’t limited to a specific region or country.

Although some platforms operate without banking regulations or local government regulations, others may not be available, or they not have the legal authorization to work in users’ locations.

Consequently, users must be sure the exchanges they select can legally operate in their areas.

5. Crypto Wallet

A cryptocurrency wallet is a necessary feature of any crypto exchange platform because it allows users to send, receive, and store a variety of cryptocurrencies. The platforms can create hot or cold crypto wallets.

  • Hot wallets are available online. As such, they’re faster and more convenient to use, but they are also susceptible to online attacks.
  • Cold wallets are only available offline, so they are more secure than hot wallets but not as convenient.

6. Analytics

Crypto exchange platforms should include dedicated analytics tools that allow traders to make data-backed decisions about various trading opportunities so they can boost their profits by making better decisions about their investments in real-time.

Traders could use the following technical indicators to make their decisions:

  • Moving Average (MA) offers the average price over a certain period;
  • Moving Average Convergence Divergence (MACD) helps predict changes in prices;
  • Relative Strength Index (RSI) measures how fast the price of a specific cryptocurrency is changing;
  • Stochastic RSI identifies if the cryptocurrency is oversold or overbought.

7. Currency Availability

There are more than 22K cryptocurrencies in existence; however, they don’t all have the same value or stability. Because of that, some may not be offered on cryptocurrency exchange platforms. That means users need to be sure the coins or tokens they need are available on the apps they plan to use.

8. Push Notifications

Using push notifications enables the platforms to more easily communicate with their users. Push notifications allow exchanges to notify their users about the latest trends in the market, new listings, and special offers.

The Bottom Line

Before trading, users should conduct thorough research and select the crypto exchange apps that include the features that will enable them to navigate the exchanges more easily and efficiently.

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Linda Rosencrance

Linda Rosencrance is a freelance writer and editor based in the Boston area, with expertise ranging from AI and machine learning to cybersecurity and DevOps. She has been covering IT topics since 1999 as an investigative reporter working for several newspapers in the Boston metro area. Before joining Techopedia in 2022, her articles have appeared in TechTarget, MSDynamicsworld.com, TechBeacon, IoT World Today, Computerworld, CIO magazine, and many other publications. She also writes white papers, case studies, ebooks, and blog posts for many corporate clients, interviewing key players, including CIOs, CISOs, and other C-suite execs.