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What Is a White-Label Crypto Exchange & How Does It Work?

If you’ve always wanted to create your own cryptocurrency exchange but are plagued by worries about the amount of money required in doing so, you’ll be glad to know that white-label products exist. A white-label cryptocurrency exchange platform will save you plenty of time and millions of dollars in expenses. This article offers an overview of the market including helpful tips to get you started right away.

What Is White-Label?

A white-label is any product or service manufactured or pre-configured by a third party but sold by retailers with their own branding and logo.

In simple terms, a white-label is when you take someone else’s product and put your name on it. It’s often a win-win situation for the product manufacturer and the seller. In this partnership, the product manufacturer focuses on building and improving the product while the seller concentrates on marketing and selling the product.

There are lots of successful stories in this niche. For instance, 365 Everyday Value is a well-known trademark for Whole Foods Market. An entire range of food products is sold under this white-label concept. Similarly, Wiko is a world-famous mobile phone brand that has established itself in more than 30 countries using the same methodology.

Today, some of the most popular food items, phone accessories, and fitness equipment are sold using the white-label concept. The main benefit of white-abel branding is that it saves you time, cost, and research expenses.

Sometimes, the two similar terms, white-label and private label, are used interchangeably. However, they are not the same. A white-label product is often sold to multiple retailers based on their requirements and niche market. On the other hand, a private label product is manufactured and designed exclusively for a specific retailer.

While both white-label and private label have advantages, building a private label product is expensive and involves the same risks associated with any new product. Therefore, most businesses and retailers stick to the white-label solution.

What Is a White-Label Crypto Exchange?

A white-label crypto exchange is a preconfigured, ready-to-deploy crypto platform that can be customized and launched in the market as an independent brand.

It’s a turnkey solution for anyone interested in launching a new crypto exchange business, whether you’re a forex trading company venturing into the crypto space or an existing crypto exchange on the lookout for a better solution. Among a variety of features, the trading platform may include a powerful matching engine, user-friendly interface, digital assets, APIs, enterprise-class wallet, and advanced payment processing capabilities.

As you may have guessed, a white-label crypto exchange is just like any other non-branded white-label product. If you want to launch your own platform, the only thing you need to do is to put your name on it.

Besides operating as a full-service exchange, the white-label service can also address a specific requirement. For instance, the service can be fine-tuned as an investment platform letting users invest in specific crypto assets. Likewise, the solution can be turned into a wallet custody business. It's sometimes used as a liquidity solution.

So, why should you choose a white-label crypto exchange instead of building your own? Here are some answers:

  • A white-label crypto exchange will speed up your entry into the market without the huge learning curve involved in designing such a system.

  • It will prevent costly mistakes due to trial and error. The product is already tested to guard against such uncertainties.

  • You will not waste time developing tools that already exist in other formats.

  • A white-label crypto exchange will enable you to enjoy the shared liquidity provided by the software provider; liquidity is a key feature that many crypto exchange users look out for when choosing a crypto exchange to use.

How Does a White-Label Crypto Exchange Work?

The main purpose of a white-label crypto exchange is to offer a ready-to-launch platform that is customized according to your requirements. To run the trading platform, you must agree to a white-label software license. The white-label software package usually contains all the important features needed to trade different kinds of cryptocurrencies and run all the typical functions of a crypto exchange.

The Technical Aspect

A typical business model is composed of two distinct elements: technical and sales. The white-label crypto software primarily handles the technical aspects. It will manage the platform technology as well as help handle security, finance, and operations. Here is how it may look:

  • Technology: Backend and frontend components, user interface, matching engine, and wallets.

  • Security: Fraud prevention technologies, security and DDoS protection.

  • Finance: Payment processing solutions, banking transactions, and cold wallets.

  • Operations: Dealing desk, technical maintenance and access to market insights.

The Sales Aspect

While technology is critical to running a white-label solution, there are important sales aspects that you will either need to do independently or ask your provider to assist you. For instance, customer relationship management and marketing are something that you will need to do yourself.

A customer relationship management program can include listening to calls, offering promotions, and acquiring customers. Similarly, business marketing includes search engine optimization, PR, and referral programs.

There are other sales aspects that you will need assistance with. Talk to your service provider about the legal aspects, contracts, and compliance. If you want to operate in multiple countries, you can take advantage of your partner's experience in getting compliant in different jurisdictions.

Liquidity is another important factor that will impact your overall sales. As a first step, try to see if your partner can offer enough liquidity to accommodate your goals. If there aren't enough liquidity pools, then you may have to look to external liquidity providers and deploy a bridge to other exchanges.

Benefits of Using a White-Label Crypto Exchange Software

A white-label crypto exchange software is a complete package that lets you run, configure, and change different components of the platform. All of these different components are designed to work together, which helps streamline business operations. Modifying one component will automatically adjust the functions of the related modules.

The software is an all-in-one instant solution for all your needs. Here's what it can do for you:

Boosts Visibility

A traditional crypto exchange requires a lot of research and development, particularly when you need to continuously tweak different elements during the initial stages of its launch. In contrast, a white-label solution is pre-tested, which can give an immediate boost to your brand without the usual risk associated with the pre-launch phase.

Fastest Way to Enter the Crypto Market

It can take years to build a viable crypto exchange. Instead of delaying your ambition, it's better to use white-label crypto software to enter the market. In some cases, the entire system can be deployed in less than a month.

Strengthens Customer Loyalty

A reliable system without any major glitches will ultimately define your brand. This is precisely what a preconfigured white-label crypto exchange solution gives you, so you can focus on customer relations.

Greater Flexibility

You need maximum flexibility to succeed in a competitive environment, and going white-label is precisely what you should do. It will let you customize your platform according to your niche. Furthermore, there is no need to build or pay for a module that you will never use. This is also a great way to scale your business because you can add advanced functionalities as the need arises.

24/7 Support

Any white-label crypto exchange should come with 24/7 support. Some of the best solutions have an army of teams at your disposal. If there is a problem, you know who to turn to. This is not entirely feasible when you're working on your own product because developing a new crypto exchange has its ups and downs. At that time, you need to wait to find a solution that may not work in the end.

Reduced Cost

The cost of launching a crypto exchange is a challenging process, which often requires funding from venture capital firms and investors. Sometimes, you need to dig in your own pockets to find additional revenue streams needed to break even. This is why so many budding entrepreneurs fail. A white-label crypto exchange reduces such risks because it's cost-effective, and you can break even much quicker than traditional setups.

Enhanced Security

The security of a crypto exchange remains a prime concern for founding members. According to CipherTrace, hackers stole nearly $1.9 billion from various crypto exchanges in 2020. To safeguard your assets, a white-label solution will give you enough time to critically think about different security measures. If required, you can also opt to use DoS, HTTP parameters, CSRF, two-factor authentication, biometrics, data encryption, and SQL injection.

Taps on Expertise of Others

If you're partnering with a reputable provider who has extensive market experience in running a crypto exchange, you can rely on their product expertise. It also means that you don't need to set up your own R&D because there is always someone to guide you along the way.

How to Choose The Best White-Label Crypto Exchange Software Provider

Recently, the word "white-label" has almost become a buzzword in the DeFi space as entrepreneurs want to cash in on this opportunity. Despite the appeal, it's not a one-size-fits-all solution. This also means that what is good for you may not suit the requirements of others.

An easier way to deal with the selection dilemma is to seek a feature-rich software like Bybit Cloud that is easy to customize. Here is a brief list of five important features to look for when it comes to choosing the best white-label crypto exchange software provider:

Security

Security is paramount to your long-term success in the business. Take a good look at the security protocols and backend features offered. If the white-label solution looks good on paper, don't hesitate to pick up the phone and talk to the technical team about the security provisions.

Depending on the business model, you may want to discuss KYC (know your client) and KYT  (know your transaction) protocols. Similarly, it's a good idea to discuss any AML (anti-money laundering) requirements.

Liquidity

You can't impress your clients if you can't offer them access to their desired liquidity. Traders love liquidity because it translates into instant trade execution, less volatility, and tight spreads. High liquidity also means that your clients can easily turn their digital assets into cash.

Take a good look at the liquidity provision. It will give you important clues regarding the depth of the market. Some white-label exchanges work with an external vendor to provide Tier 1 liquidity, while others may use a non-bank liquidity provider.

User Experience

When designing a crypto exchange, it's quite common to forget that your success doesn't depend on what you think is important; instead, it's the other way round. Success depends on how your clients perceive your product offering. This is why you should pay special attention to user experience and customer support.

Under these circumstances, make sure that the user interface is straightforward to navigate. Since many of your clients may be new to crypto, keeping everything simple will entice them to open an account. Also, review the customer support tool to ensure that you have got the right tools to meet your customer service goals.

Regulation

If you want clients from multiple jurisdictions, don't forget to review how the software affects the regulatory affairs in different jurisdictions. Most white-label crypto platforms and their customers don't correlate regulations with the technical aspects.

In reality, different software features such as KYC, AML and the provision of incentives are often aligned with regulations and laws of respective countries. This is why the team behind the software must have the experience and knowledge of the interrelation between their product and how it impacts their clients.

Variety of Digital Assets

The rapid evolution of crypto is a result of new projects. It's also the reason why so many new customers flock to crypto exchanges looking for the next big thing in the crypto sphere.

Let's agree that the capitalist mindset will continue to push investors to seek new revenue sources. Therefore, to keep everyone interested, your white-label solution should provide your clients access to a variety of coins and tokens. The greater the number of digital assets, the better your chances of success.

Bybit Cloud: Bybit’s White-Label Crypto Exchange Solution

Bybit Cloud is a white-label crypto exchange solution offered by Bybit - the leading crypto exchange in the world. It's a highly flexible feature-rich solution that can be deployed within a matter of days. You can use Bybit Cloud to create a powerful white-label product backed by world-class infrastructure and have an experienced team located in different regions guide you through the entire process.

Bybit Cloud is a unique concept that is trusted by trading brokers, blockchain enterprises, digital asset platforms, and digital asset holders. It will let you reach new opportunities in the crypto asset market through a comprehensive suite of services. Using the crypto cloud, you can quickly establish a crypto exchange, build a trading ecosystem, leverage the best-in-class market depth, and provide comprehensive data analytics capabilities.

Whether you're a forex trading platform looking for a simple crypto white-label solution or a team intending to set out on your first crypto venture, Bybit Cloud has got your back.

If you’re interested to get started, here is how we can help:

Contact Us: Reach out to us with your business goals and needs.

Preparation: After initial talks, you will get a fully customized preliminary solution within five working days, along with fundamental assets such as domain name, logo, developer account, and other important tools to manage your brand identity.

Delivery: We will deliver comprehensive product training and business operational guidance. You will be provided with timely assistance every step along the way as you launch your own crypto trading platform.

Important Features of Bybit Cloud

  • Bybit's crypto cloud is a one-stop shop for building crypto products. You can integrate asset payments, liquidity, and almost any desirable feature into your final product using the Bybit Cloud API.

  • Bybit Cloud has expanded product data analysis and asset management capabilities. The crypto cloud solution provides an easy and secure way to manage your backend and blockchain functional interaction. You can also build multi-functional applications faster, standardize the integration authority between blockchain and encryption services, and leverage the industry-leading data analytics capabilities.

  • Bybit Cloud simplifies interaction and transaction data. You can use it to quickly build applications as well as standardize the integration between blockchain and user services.

Important Features of Bybit

  • Bybit has over $10 billion in daily crypto asset transactions.

  • It has a strong market presence in 150+ countries and regions.

  • Your clients can access 200+ assets and 500+ trading pairs.

  • Its services are available in more than 150 countries backed by a world-class development team from around the world.

  • You will get continuous support in the later stages of development and delivery.

  • Bybit Cloud can save you tens of millions of potential R&D expenses.

The Bottom Line

Crypto cloud is a full-featured software that can help you reach your goals in a very short time. If everything goes according to the plan, you can be running a fully functional brand in less than 30 days.

This is a huge opportunity to tap into a multi-billion dollar market and compete with the big boys without using extravagant amounts of money.

Excited to get started? Contact us directly on our Bybit Cloud website now.