Boasting 6 million users, WazirX is India’s fastest growing crypto exchange. Know how it gets the competitive edge as we uncover its business model.
The way WazirX has picked up momentum in terms of soaring ROI is no less than a feat. And the numbers reveal that this flight is only going to increase with even more turbulence.
In 2021 itself, the platform had an exchange volume of more than $7.7 million. This generated as much as $20 billion as revenue for the behemoth crypto exchange platform — Binance (WazirX is owned by Binance).
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The Indian cryptocurrency exchange has a daily trade volume of around $100 million (highest in the country). Since its launch in December 2020, it has crossed a daily trading volume of $500 million.
WazirX generates revenue by charging traders a trading fee varying from 0.15% to 0.2% (taker & maker fees).
There are two stages to creating a crypto exchange platform like WazirX:
This deals with incorporating all the features that make your platform similar to WazirX. It also involves getting all the legal sanctions required to build a platform like WazirX. Once this stage is complete, your crypto exchange platform like WazirX is ready for launch.
No matter how great a product or service is, it is practically of no value if nobody knows about it. So, ensure that your target audience is aware that your crypto exchange platform like WazirX is there in the market. Once they are aware of it, only then will they be able to tap into its money-minting potential.
So when you are deciding the budget, make sure that you keep a part of it for the purpose of advertising your platform on various channels.
Here’s the breakdown of these two stages:
Focus on coming up with a solution that gives all the possible benefits to everyone involved in the blockchain ecosystem. Accordingly, devise an effective strategy that rules over the market.
A market analysis helps you identify the core requirements of the prospects; what are their pain points? It will help to list down features/functionalities that aren’t available on other crypto exchange platforms.
This way, your crypto exchange platform like WazirX will stand out from the competition.
Various factors affect the cost of building a crypto exchange platform like WazirX. This includes the business model, cost of technology, hosting, some initial legal counsel, government registration and initial advertising. Though not all funds are required up front, ensure that the venture has access to enough capital to allow a proper runway.
The more features integrated into your cryptocurrency exchange, the higher is the cost. Features like sign up/sign in and crypto wallets are a must. List down the additional features to make the product richer.
Also, integrate multilingual support in your platform for everyone to use it efficiently, primarily the target audiences. Finally, all your chosen features will determine your budget.
If you want the platform to have a massive user base, ensure that it has a user-friendly interface. Omit complex entities and integrate more self-explanatory aspects to make your platform easier to understand and popular among users.
Further, fix the extent of navigable entities you incorporate in your cryptocurrency exchange platform. All such aspects decide the exact budget you need to set aside to develop a crypto exchange platform like Wazirx.
You also need to consider the location where your developers reside. Building your crypto exchange at a place having a higher per-hour cost of crypto exchange platform development will fall heavier on your pockets. However, the rate will be minimal if you approach the developers residing in an inexpensive region.
Before you set your plan into action, it is important to understand the regulatory demands of your new venture. Only then can you ensure that the licensing requirements are met. Proper licensing needs to be obtained in all jurisdictions where the company plans to operate.
As exchanges fall into the currency exchange umbrella, these must adhere to Know Your Customer (KYC) regulations. All states keep strict vigilance regarding this as a best practice to combat money laundering. As regulations vary by jurisdiction, consult with an attorney familiar with the industry.
The cornerstone of any successful exchange is liquidity. If there is no order book and trading activity, potential customers will view your new venture with suspicion. So, connect with a network of existing exchanges to enhance the liquidity of your crypto exchange. The larger the network of exchanges, the lesser will liquidity be an issue for your new exchange.
Fee structures, among other things, vary widely between different payment processors. You need to have the lowest transaction rate in order to be competitive with other exchanges. Some processors incorporate hidden fees into their contracts. So, be sure you understand the contract you’re signing.
Other differences between processors include settlement time and compliance with PCI DSS, a set of best practices to ensure cyber security. Be sure that your payment processor is PCI-compliant.
After you’ve decided the kind of crypto exchange you want, consult a turnkey cryptocurrency exchange provider who builds custom-made feature-rich platforms. Such providers charge a one-time license fee without royalties or commission structures.
They finalize a design with a smooth UI/UX. Moreover, they make sure that the front-end design is well aligned with the blockchain platform ideology. By taking their services, you can host the exchange yourself as you receive the entire source code. This will also help your auditors during inspection by regulators.
Once a crypto exchange platform like WazirX is built, ensure that it is working to the user’s satisfaction. At this stage, the testers check if there’s any issue with the platform’s functionality. Ultimately, the idea is to make the crypto exchange error-free.
Exchanges built by reliable crypto exchange platform providers are secure as they utilize offline cold storage wallets, two-factor authentication and encrypted databases. Also, they follow the standard industry practice of not storing passwords.
You’ve got your exchange built and set up a contract with a payment processing firm. And, you’ve taken great pains to ensure your exchange is following all rules and regulations. Now, right before launching your exchange, test its full range of capabilities in beta. Be ready in advance with all the marketing & promotional activities you will be carrying out in launching your WazirX-Like Platform.
Once your exchange has launched, it is time to connect with crypto news outlets like Coindesk for example. Adequately plan your marketing activities along with their costs to ensure your initial raise doesn’t leave you needing additional funding. A safe bet is to first focus on free social media marketing. Get to paid marketing only after a critical mass of traders is reached.
Remember, there’s no better way than product optimization as per user needs to make your blockchain product stand out and stay relevant in the market. So, set a launch date and get things going.
Now is your time in the limelight. Officially announce the launch date of your crypto exchange platform like WazirX on all digital channels.
Your team must attentively and satisfactorily deal with consumers to resolve their complaints and technical issues. Customers should be responded to in a timely manner. So, make sure that the representatives are available 24/7 (cryptocurrencies never stop trading).
Cryptocurrency laws are rapidly evolving across the globe. So, it is important to hire a full-time, in-house legal compliance team. If that is turning out to be costly, outsource to reputable law firms in order to keep your exchange legal in all geographies where you will conduct business.
Follow all these steps in the order above to get the best out of your efforts towards creating a crypto exchange platform like WazirX.
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