How to Make a Cryptocurrency Exchange App like Coinbase: Features, Monetization, Cost

It's cryptocurrency market time. With more and more users using platforms like Coinbase, the total market cap of these digital currencies has increased past $1.2 trillion. Over the past couple of years, the number of active users globally has increased by over 200 million, and decentralized finance is seeing massive mainstream interest.

This is a time of a surge in the user base adopting a Coinbase-like platform development. The trends behind this give fintech startups a rare chance to create secure, scalable cryptocurrency exchange apps dedicated to the current users' needs and tastes.

Cryptocurrency Exchange Market Overview

This is a big real global cryptocurrency market that simply will not end. 2023 it attained a 12.8% CAGR; by 2025, it is expected to cross over $2 million in valuation. This growth is driven by several factors: The use of blockchain technology within the wider industry, the recognition of cryptocurrencies as a payment medium, and the rise in institutional investors are the reasons for this.

Another thing, user adoption is coming soon. In 2024 over 420 million users worldwide traded cryptos. What is interesting is that most of the new users come from the emerging markets. Where there is no traditional financial infrastructure, cryptocurrencies are giving people an opportunity to pay, send remittances, save, and more. The demand for crypto exchange MVP development for platforms that provide reliable, safe, and very easy-of-use service is driven by it.

Emerging Trends in the Crypto Market

• Institutional Investment: The endorser of cryptocurrencies with the capital of big corporations and financial institutions seems to increase market confidence.
• Regulation Evolution: Governments now are creating regulatory frameworks governing crypto trading, clearing the muddy waters for businesses around the globe.
• New Use Cases: Beyond trading, cryptocurrency is now used for decentralized finance (DeFi), NFTs, and smart contract development which makes its value spread out through the digital economy.

Fintech app development for startups stands to benefit from these trends which are reshaping the market and defining new opportunities. Starting a cryptocurrency exchange software solutions allows startups to cater to an increasing number of users looking for more secure and feature-rich platforms, an alternative to giants such as Coinbase.

Types of Cryptocurrency Exchange Platforms

The myriad types of exchange platforms for cryptocurrency exchange app development services are something you need to be aware of when building it. There are differing types and, with each type, there are a set of features, security models, and target audience. Below are the primary types of crypto exchanges.

Centralized Exchanges for cryptocurrencies (CEX or crypto exchanges)

Centralized exchanges are common and popular. The platform’s users are divided and operate under a central authority or company that controls the platform, processes transactions, and holds users’ funds. These include Coinbase, Binance, Kraken, etc. And, these platforms give high liquidity and have advanced trading features as well as customer support, suitable for beginners and professionals. Yet, they are also subject to hacking because users’ assets stored on centralized servers are at risk.

Key Features:

• High liquidity and large trade volume
• User-friendly interfaces
• Advanced trading tools
• Regulated and secure but exposed to risks for centralized control

Decentralized Exchanges (DEX)

These are decentralized exchanges, meaning there’s no central authority and you can trade directly from your wallet. DEX examples are Uniswap and PancakeSwap. By removing the need for intermediaries, however, these exchanges allow increased privacy and security. But CEXs are usually more liquid and have more features.

Main Characteristics:

• User-controlled; no intermediaries present, user controls the spending of funds
• More privacy and safety
• Lower liquidity and fewer trading options
• No customer support, especially for the new users

Hybrid Exchanges

Hybrid exchanges leverage the best features of both worlds. They bring crypto exchange security implementation and control of decentralized exchanges whilst still maintaining the liquidity and ease of use of centralized ones. They are still young but promising. For instance, Nash Exchange hopes to combine the coins of decentralized and centralized exchange.

Key Characteristics:

• DEX with CEX-level liquidity
• Improved user control over assets
• Scalable infrastructure
• Still in the early stages of development

With so many ways of skinning so many cats—there are just so many ways to develop an app and what works in one place may not in others—you need to pick what works for your business goals, user needs, and regulatory needs. Let’s say you are a newcomer to trading and a centralized service could be a simpler place to begin your journey. But if you value privacy, this is something you'll want on a decentralized platform. Hybrid models could one day become a future standard. Take your time and carefully choose the necessary features for your future product.

Top 5 Alternative Applications Compared to Coinbase

Coinbase is probably the best-known cryptocurrency exchange, but others provide distinctive features that could be suited to particular user needs better. You should always set other cross-platform crypto exchange solutions as an example to successfully build your own. Below are five leading Coinbase alternatives:

Binance

As it is, Binance is the largest cryptocurrency exchange by trading volume. It’s offering a lot of cryptocurrencies, advanced trading tools, and low fees. But it’s much less accessible to beginners and has fallen foul to regulators in multiple countries.

Pros and Cons:

• Lesser trading fees than Coinbase
• Professional trading tools
• A large number of cryptocurrencies
• Regulatory challenges in some regions

Kraken

Kraken is a popular exchange known for its solid security features and is one of the oldest exchanges. It has many coins support and advanced tools for the traders who know what they are doing. Its interface is more complex than Coinbase but that doesn’t matter if you’re motivated by the need for security and fancy features.

Benefits and Flaws:

• High-security standards
• A wide variety of cryptocurrencies
• Staking services
• More steep learning curve for beginners

Gate.io

If you can keep any gate.io news, here are just some of the cryptocurrencies and trading pairs at gate.io, which is a very established centralized exchange (CEX). Secondly, this platform is also predicated on novice and even experienced traders like spot trading, futures contracts, and margin trading, for example. Gate.io has also done many things to make security to protect users’ assets: multi-signiture tech and cold wallet storage. Besides that, you also receive 2FA and anti-phishing features to keep your account safe.

Advantages and Disadvantages:

• Emerging cryptocurrencies, and extensive coin offerings
• Professional trading tools
• Security measures such as cold wallet storage and multi-signature protection
• Low trading fees compared to large exchanges such as Coinbase

Crypto.com

Apart from being an exchange, Crypto.com is a full-blown ecosystem providing its users with crypto debit cards, staking, and lending. Users will find that its app is very easy to use, but its advanced features can be confusing to new users.

Strengths and Weaknesses:

• Crypto services ecosystem
• Availability of crypto debit card
• Trades at competitive prices
• The complexity of making its features approachable by beginners

KuCoin

If you are searching for an altcoin or currency that isn’t available on FTX or Binance, you may be best off checking out KuCoin, which usually tends to be one of the best alternatives to choose if you are seeking comprehensive access to a lot less staid altcoins. It is a lower trading fee exchange with services like staking and lending but has a less-than-clear-cut regulatory stance compared to established services like Coinbase or Gemini.

Opportunities and Obstacles:

• A major number of altcoins
• Low trading fees
• Provides staking and lending services.
• Uncertain regulatory position in some regions

With a lot of features that various categories of traders could need, these five exchanges can diversify their services according to the convenience of traders that differ from beginners to advanced users. In Idealogic we developed the platform Glue through user experience, educational support, and the introduction of unique trading solutions. You must choose the exchange that fits well with your needs and priorities, whether it’s lower fees, more cryptocurrency options, or more robust security. Also, don’t forget about mobile app development for crypto trading, be prepared for any users’ needs.

[Also Read: MVP Development Services for Startups: Launch Faster with Our Software Solutions]

Key Features of a Cryptocurrency Exchange like Coinbase

To build a good cryptocurrency exchange app like Coinbase you will need to integrate some features that secure it and make it usable, and scalable. Below are the key components every cryptocurrency exchange must have:

User Account Management

Account management systems must be both user-friendly and secure. Users must be able to swiftly create accounts, or set up two-factor authentication (2FA), along with the capacity to handle their data. Secondly, the platform should also have KYC/AML (Know Your Customer/Anti Money Laundering) integration, to represent regulatory compliance and build user trust.

Key points:

• Easy to register and onboard
• Two Factors Authentication (2FA)
• KYC/AML integration services
• Profile and wallet management

Trading Functionalities

The core of any cryptocurrency exchange app will always be its trading engine. Custom crypto trading platform creation can provide fast, reliable, and high transaction volume that must be completed in real time. Different types of orders like market, limit, and stop orders should be allowed. Besides these advanced trading options like margin trading and staking, you can trade and it is very easy with the use of easy platform of Coinbase.

Key aspects:

• Real-time order execution
• Multiple order types: market, limit, stop
• Margin and staking advanced trading options
• A complete transaction history

Security Protocols

The security of agile development for crypto exchanges cannot be compromised. And, for example, in a platform like Coinbase or something similar, you would find high security such as cold storage for most of the funds, multi-signature wallets, and encryption protocols. The need for integrating the features of secure trading engine implementation, user verification, and regular security audits is always important to ensure the safety of the platform and its user's assets.

Essential points:

• Most of the assets are stored in a cold wallet
• Multi-signature wallets
• Secure API integration services for crypto platforms for transactions.
• Penetration and security audits are respected regularly

Crypto Wallet and Payment Gateways Integration

To allow purchasing cryptocurrencies and withdrawals, fiat deposits and withdrawals have to have seamless integration with exchanges and payment gateways. Moreover, a well-developed, secure cryptocurrency wallet must be integrated to enable users to store and keep their digital assets safe. Coinbase accepts a variety of wallets and supports everything from hardware and software wallets.

Important aspects:

• Support multiple payment gateways
• Storage and management of integral crypto wallets
• Fiat-to-crypto and crypto-to-crypto conversions

Analytics Reporting Tools

Thus, providing users with advanced analytics gives users the ability to make informed trading decisions. Price charts, real-time market data, or portfolio tracking features add a new dimension to the trading experience. Users can easily track their investments because Coinbase provides step-by-step transaction histories, performance reports, and market trend monitoring tools.

Important items:

• Includes real-time price charts and market data
• Performance reports and Portfolio tracking
• Transactions information and analytics

These are what make any robust cryptocurrency exchange. The key to implementing them effectively means a user-friendly, secure, scalable platform that can compete with market leaders like Coinbase. And last but not least, don’t forget about maintenance and support for crypto platforms to always keep them up to date.

7 Tips for Creating a Successful Cryptocurrency Exchange App

If you are building a cryptocurrency exchange app like Coinbase, you need to put in a great deal of effort, be detailed, and attention to user needs. In this part of the article, we’ll go through some key tips to follow from MVP development through to marketing, and user engagement.

#1 Start with an MVP Approach

You need to test the market and get early user feedback before developing a minimum viable product (MVP). Instead of focusing on everything, focus on the only things you need to do; user registration, trading, and wallet integration. For the initial version, leave it simple, and scale it, so that you can add more features based on the user's needs later.

Key steps:

• Identify core features like trading engine, user account management, and security protocols
• Prioritize scalability to accommodate growth
• Gather feedback early to refine the product

#2 Begin with Security

Any cryptocurrency platform has to be secure. From day one implement secure trading engine implementation protocols, two-factor authentication (2FA), cold wallet storage, and encryption. Maintaining a regular security audit keeps your organization up to speed.

Best practices:

• Protect sensitive data in  encryption
• The majority of assets should exist in cold storage
• Added security with multi-signature wallets
• Regular security audit updates

#3 Regulatory Compliance

Cryptocurrency exchange platform comes under both local and international regulations. Building KYC (Know Your Customer), and AML (Anti Money Laundering) processes from the start means you get compliance and lessen your legal risk as you scale.

Tips for compliance:

• Target markets research regulations
• Integrate KYC/AML early on.
• Stay compliant by working with legal advisors

#4 Optimize User Experience

User engagement needs an intuitive user interface to build scalable fintech solutions. Ease navigation, fast page load times, and excellent customer support. For example, Coinbase pays a lot of attention to being an easy-to-use gateway for beginners and veterans alike.

Tips for user engagement:

• Keep the interface clean and easy to navigate
• Offer resources for new users to get educated
• Invest in responsive customer support

#5 Create a Strong Marketing Strategy

Affiliation is important to develop awareness and interest in using services. Deploy your content marketing, social media, and partnerships with crypto space influencers. Focus on the one thing that sets your platform apart from others – like security or low fees.

Marketing tips:

• Build a content marketing strategy to educate users
• Collaborate with Crypto influencers
• Attract early users with promotions and reduced fees

#6 Community building is key

Gaining user engagement and loyalty will help you build a strong community around your platform. Send out regular newsletters and communicate with users regularly via social media. If you’re creating a decentralized model then offer incentives for referrals or participation in the platform’s governance.

Engagement tips:

• Host webinars or art educational events
• Create referral programs to incentivize growth
• Take user feedback for a continual improvement approach

#7 Analyzing and Monitoring User Data

Your analytics can be used to track the behavior of users and make data-driven decisions. Find out what features are most popular, where users are dropping off, and what edits can be made. It will assist with continuous platform optimization as well as user retention.

Best practices:

• Use analytics tools to monitor user activity
• Use data for measuring A/B testing of new features
• Continuously refine based on user feedback 

Work on your cryptocurrency exchange app in such a way that it will be secure, will be user friendly, will be scalable by taking market penetration and user retention into account. Also don’t forget about cryptocurrency exchange testing and QA to improve your app.

Data Protection in Cryptocurrency Exchanges

Cryptocurrency exchanges are all about sensitive user information and handling large amounts of assets, so data protection is their number one priority. A single breach can not only cost you financially but can severely dent the platform's reputation. With that being said, here are some key steps to ensure that user data and assets are kept secure.

Data encryption

Sensitive user data, such as personal and financial details, should be encrypted. Even if data is intercepted, unauthorized parties cannot read or misuse it. This is one of the things Coinbase uses end-to-end encryption for—protecting both stored and in transit data.

Key practices:

• Encryption for user data from end-to-end
• Secure communication with SSL/TLS protocols
• Anonymization of user data

Cold Wallet Storage

Cold wallets are offline and inaccessible to hackers and typically should account for the majority of funds on a cryptocurrency exchange. Hot wallets — that is, connected to the internet — should have a very limited stock of assets used for daily trading. It lowers the chance of massive theft from a breach.

Basic Routines:

• Upwards of 95% or more assets are located in cold storage
• Regular transfers to maintain liquidity hot wallets can afford to take part in transactions
• The use of multi-signature wallets to grant cold storage access

Two-Factor Authentication (2FA)

This brings an extra layer of security in the shape of two-factor authentication (2FA), where users must verify themselves using two types of information before accessing their accounts. It could potentially be a combination of their password and a unique number they receive on their mobile device. SMS-based 2FA and platforms that have app-based 2FA options such as Google Authenticator should be offered by the platforms.

Primary Procedures:

• SMS and app-based 2FA
• Ease of setup to encourage adoption
• Needed for sensitive actions/account logins

KYC/AML Compliance

This KYC and AML prevent any fraud involving the platform while only verified users can access the platform. Strict KYC/AML implementation itself creates trust, but additionally, it prevents the platform from being used for illegal activity, for instance, for money laundering or financing of terrorism.

Important Customs:

• User identity verification
• Suspicious activity transactions continuous monitoring
• KYC documents data storage protocols are strictly ordered

Periodical Security Audits and Penetration Testing

To protect yourself from evolving threats, cryptocurrency exchanges should be regularly audited and tested regularly for vulnerabilities in your website infrastructure. Action taken in an active, proactive manner allows such vulnerabilities to be identified before they become exploited. Having a trusted third-party audit firm take on the analysis of the security posture of the platform can give an objective view of what is going on.

Vital Protocols:

• Carry out frequent penetration testing to find weaknesses
• Unbiased second-party audits by a third party
• Continuously updated with fixes to issues as soon as they are known to exist

User Education and Awareness

Users who aren’t educated on best practices to protect their accounts can even attack the most secure platform. Exchanges should provide the necessary resources so that users know what to do to protect their personal information, how to avoid phishing scams, and how to use strong passwords.

Central Behaviors:

• A set of educational resources on security best practices
• Alerts to users regarding their security updates
• To add extra protection, it will encourage the use of hardware wallets

Whether it’s the user data or assets cryptocurrency exchanges want to protect, the implementation of these security measures is the way to go. Coinbase has set the bar exceptionally high in terms of data security, and any new exchange that wants to compete must invest heavily in user protection to build trust in its longevity. Don’t be afraid to use blockchain MVP consulting services, professional help will only help you create a successful platform.

How Coinbase Makes Money and Other Ways of Monetization?

Multi-revenue models are used by Coinbase, like many other exchanges that trade cryptocurrencies. Below are the main ways in which Coinbase and similar platforms use their strategies of monetization and how they can be applied to a new cryptocurrency exchange.

Trading Fees

Coinbase makes its money by charging fees on trades. The platform collects a percentage-based fee for each purchase or sale of cryptocurrency made by the user and can vary based on the transaction size and type of user. Usually, retail traders pay more fees, while higher volume traders get discounts. This is a typical way for an exchange to do this, and startups could mimic it to make money.

Key revenue stream:

• Trading fees based on percentage
• Fee structure formed across tiers for different types of users
• Lower fees for high-volume traders

Subscription Services

In addition, Coinbase offers subscription-based services like Coinbase One, a service providing zero-fee trading, priority customer support, and digital asset coverage under insurance. A subscription model can generate recurring (steady) revenue for you and provide users with premium features on the platform that make their experience on it better.

Monetization tips:

• Subscription plan on a monthly/bi-annually or annual basis
• Zero-fee trades or enhanced security
• Tailored trading tips and educational materials

Yield services and Staking

Among the exchanges that let people stake cryptocurrency and earn rewards, Coinbase is the only one. These rewards are taken by the platform as a fee. Staking service is a way to get users to keep their portfolios growing while making extra money for the platform.

Revenue model:

• Reward earnings stake fees
• Share of the yield farming options, while some of the returns go to the platform
• Interest on crypto loans through lending services

Premium and Basic Features

If you are a more experienced trader, Coinbase has Coinbase Pro with advanced chart tools lower fees, and even API trading. This allows exchanges to provide a tiered platform that can cater to both the beginner and the professional trader. That is to say, a crypto exchange architecture design can combine features and add advanced tools that yield income from user growth who require more than the exchange considers normal.

Monetization strategies:

• Professional analysis API and advanced charting tools
• Analytics and dashboards customized to your business
• Lower fees for premium account holders

Crypto Wallet Fees

Then, Coinbase gives its crypto wallet development, so you can keep digital assets safely. Charging small transaction fees for sending or receiving funds through the wallet will earn the platform money. It also makes sense to begin to integrate a white-label wallet service for businesses, thus getting new revenue streams for startups.

Revenue potential:

• Wallet service transaction fees
• Integration for premium wallet features like better-enhanced security and cold storage
• White-label wallets for the corporate and startup world

Custodial and Institutional Services

Coinbase provides custodial service for the storing of cryptocurrencies securely for large investors and institutions. Generally, these services charge for asset management or safe storage. If they are new exchanges and see that they can target high-net-worth individuals or institutional clients to diversify their revenue streams, then they can pursue that.

Revenue opportunities:

• Custodial fees for institutional asset management
• Asset insurance and protection services
• Custom trading solutions for large investors

Affiliate and Referral Programs.

Affiliate and referral programs are run by many exchanges including Coinbase and it is quite common. Incentives in the form of personal rewards, a percentage of the trading fee, or a bonus are provided to the users to invite others to join the platform. The reason this model is so good is that it not only attracts new users but also keeps existing ones active.

Monetization strategy:

• New signups will get referral bonuses
• Affiliate marketing partnerships
• User engagement incentives to increase trading volume

With this monetization strategy, cryptocurrency exchanges can make revenue out of valuable services rendered to users. Startups can collect these revenues whether through trading fees, premium services, or institutional offerings so they can stay growing and profitable. Actively involve the experience of DevOps for blockchain applications to make them useful and easy to monetize.

[Also Read: Top MVP Development Challenges and How to Overcome Them]

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^{What Does It Cost to Create a Cryptocurrency Exchange Coinbase-like App?}

The cost of creating a cryptocurrency exchange app like Coinbase depends entirely on factors including features, complex platform, security, and development time. To deliver the highest quality at the most cost-efficient rate, Idealogic provides a structured approach to creating a cryptocurrency platform in three MVP packages.

1. Basic MVP Package: It includes all of the essential features such as user registration, a simple trading engine, integration with a wallet, and required security protocols such as two-factor user authentication system development. For startups who want to test the waters with a minimal feature set before scaling, it’s perfect. Such a project can cost in the $50,000 to $100,000 range, depending on how custom you want it to be.
2. Intermediate MVP Package: At this tier, more sophisticated features such as KYC/AML compliance, and secure payment gateways come together they also integrate with other advanced trading tools like limit and stop orders. Businesses who want to reach a wider audience but with mid-level trading capabilities can use this package. Most cost between $100,000 to $200,000 to strike a balance between big features and scalability.
3. Advanced MVP Package: The advanced package for enterprises and startups who want to compete with top exchanges including Coinbase features staking options, margin trading, real-time analytics, and cold wallet storage for enhanced security. This tier comprises a fully baked-up market-ready platform with good architecture. Considering that a solution like this would begin at $250,000 and potentially go up more if you want customization according to your specific needs or if they add in additional features, such as an app for mobile, or even a decentralized exchange (DEX) option.

Through Idealogic’s expertise and knowledge in blockchain application development, your platform will be developed with high-performance backend systems that can handle high volume throughput of data. For example, Idealogic aimed at creating an experience that can be satisfactory and simple for both old traders and beginners for the platform EVERSE. Our solution is also offered as a white-label crypto exchange development alongside continuous post-launch support to help you market and scale it up, depending on the market demands.

This structured approach gives startups options to choose the package they can afford and aspire for.

Closing remarks

The cryptocurrency exchange market is quickly growing, providing companies and starting with great opportunities. Never has there been a time more ripe for entry into this space than now, as the adoption of digital currencies continues to grow and its users require safe, scalable platforms. By having a narrow focus on user account management, robust security, and a high-performance trading engine, you can build a competitive platform for Coinbase.

When choosing a platform, it’s important to pick the right development partner to make sure your platform meets industry standards and doesn’t send your budget through the roof. Idealogic provides tailored MVP packages that are basic to advanced packages and can be offered in flexibilities depending on the development stage of the business. With their blockchain developer expertise and security protocols along with supporting your platform to evolve in line with the market demand, you won’t need to worry about your platform not launching or will launch but die eventually.

If you’re ready to take advantage of the increasing interest in cryptocurrency and create your own Coinbase-type application schedule a consultation with Idealogic to discuss your business goals and get started for no charge!