Decentralization is a concept which can be implemented anywhere. If one has an idea, decentralization is always there to make it more powerful.
Melanie Swan rightly said, “Cryptocurrencies are just one example of decentralized technologies.”
In the world of digital currency, decentralized exchanges play a major role and having a platform to support decentralized exchange business is a great pearl to hustle for. But what’s the perfect recipe to get a platform which gives tastes of successful decentralized business exchange.
The most crucial is to reach to first base and hindrance is the team. Getting a solid team is what defines the success of the platform. The team can be the owners or workers, or an experienced and specialized agency. No matter which members define the team but it should have all the aspects of the business; technical, legal, brand and customer engagement.
If the team lacks any of the crucial pillars the platform build will have a parallel impact; becoming just one more poor exchange with no demand and business. The team should accommodate a passionate person from every related field; whether a trader, application developer or blockchain enthusiasts; so as to have a product which customers want and not what business wants to give.
With perfect team along, the things move on swiftly to have legality concerns resolved and get customer onboarding a delightful experience. It’s important to have a quick and simple regulation complaint procedure in a place like KYC and AML, which rightly balances the compliance and user experience.
Decentralized exchange business requires a model in which nothing should be controlled by anyone; and this requires extensive research and some amount of creativity to find a model which is beyond good and have something exceptional from the currently available options. It is must have, all the great and not so great cryptocurrency on the exchange which must be decided on the basis of volume and the uses it has in its bucket.
Also, decentralized exchange should always be peer-to-peer and even the exchange should not become the third party. The decentralized exchange should provide a well-developed and easy to handle platform to bring buyers and sellers together.
In addition to this, the exchange should only act as a holder of value until and unless a trade happens. This makes a true decentralized exchange, everything happens between buyer and seller, exchange just support and provide safety to both the parties.
An order book represents the demand and success of exchange business. If the exchange is decentralized, then transparency is must and exchange should have open order book revealing some key data like volume, buy price, sell price and trade details along with open orders and completed orders. This not only increases reliability but also supports the idea of decentralization.
In this method, the buyer and seller have the option to select the trade offer that is most suitable and enter into it to get it completed; maintaining transparency and decentralization.
To be a successful exchange, there should be a system and cautious plans should be made to remove as many intermediaries as possible, including the exchange itself. The common exchange mechanism like having a stable coin as an exchange medium would boost the platform business and allow freedom to all.
Additionally, providing a solution to buy USDT or TUSD against legal tender money and having an exchange rate based on stable coins remove barriers of dependency on the banking system and allow avoiding intermediaries.
Also, getting the fastest of all is necessary and of great importance when thinking to scale the crypto exchange business. Not only the speed and P2P model but the continuous tweaks, trading fees and offering the optimum deposit and withdrawal rates allow drilling deep in the market. Tweaks should include managing available options of cryptocurrencies, enhancing technological aspects and making more and more payment options available.
In spite of being at the peak, just a bug or a security flaw could rule out the exchange business out of the market. To avoid such scenario, the bug should have no place and security should be top-notch.
A decentralized exchange should always have a decentralized bug and error reporting system, which should be seriously and wisely handled so that the platform remains bug-free. A proper security policy should always have a seat reserved for security audit - internal as well as external. Even a small loophole can give an irrevocable mark on the heart of the business – the customers, which even an astonishing service quality cannot remove.
The decentralized exchange is a good idea but restriction like limited areas could turn it into the worst idea. A decentralized exchange should be supported with accessibility across platforms and devices.
A best-decentralized exchange should have an application for mobile devices, supporting the best major operating system so should be the case with a desktop application and the platform should be accessible through web application as well.
Everything in place makes no change until and unless there is a descriptive website which covers most of the queries; and a supporting blog having key aspects like product description, additional functionality and articles for community engagement.
It is a great tool to know more about customers’ choices and to set up the dispute redressal system to find and resolve the disputes between users in the exchange economy. The things get more easy and transparent as well as decentralized.
Decentralized exchange only works with the motive to get buyers and sellers deal with each other directly. It acts as a holder of assets or cryptocurrency during the whole exchange takes place, which should be relieved as soon as seller confirms receipt of money. This model of exchanges is not only decentralized but is a way to play safe. This not only sidelines all the middle persons but also shred the volatility risk of cryptocurrency.
It’s a great way to achieve both centralization and decentralization which Karl E. Weick showed interest to, through his quote – “The real trick in highly reliable systems is somehow to achieve simultaneous centralization and decentralization.”