Bilal Khan Starting your cryptocurrency or NFT trading platform in 2024 can be a profitable decision since the volume of cryptocurrency trading may reach $40.5 trillion in Europe and $2 trillion in the US by the end of the year. Both simple and full-fledged exchanges (CEX and DEX) are in demand. The gross revenue, for example, of the largest centralized platforms, is up to several million dollars per day due to commissions alone. Binance, if we estimate the average trading volume per day and consider commissions for transactions, receives more than $35 million per day, OKEx – more than $10 million, and Coinbase – more than $500,000. Of course, these are the flagships of the market, and we are not talking about pure profit; even small new projects can bring stable passive income to owners. Let’s talk about the main types of crypto platforms and crypto recovery services ways to make money on them.
Which cryptocurrency platform to start with?
Different types of sites are suitable for opening your own cryptocurrency business: the most straightforward option is a cryptocurrency exchange, and larger-scale projects will be centralized spot exchanges, platforms with margin trading and futures or DEX. Separately, we can highlight web marketplaces where tokens are sold. Let’s consider the main ones.
Futures Trading and Margin Trading
Professional traders are most popular with CEX, which offers spot trading and leveraged and futures trading. With margin trading, the exchange gives the user a loan when placing orders, i.e. not only personal funds are used. This leads to larger trades. This type of trading is considered higher risk, as losses are higher.
Futures contracts, on the other hand, allow you to conclude not instant deals but buy/sell after a specific time. This instrument usually attracts traders with the possibility of hedging risks and speculating on price changes. CEX usually offers a wide range of futures: open, fixed date, index, inverse, USDT margin, and options. The more options, the more CA you can attract. The most commonly used currencies are BTC, ETH and BNB.
The Block: BTC Futures Trading Volume Data for 2024 on Major Exchanges
The demand for derivatives trading in 2024 is higher than for spot trading. For example, CCData’s Exchange report shows that this segment will reach $3.5 trillion in 2024,
The most popular CEXs supporting such trading options are Binance (43.5% of the market), Kraken, Bybit (15.1%), OKX (19%), and Huobi. If we talk about exchanges that prioritize derivatives specifically, then BitMex, Derivit, Bybit, and Phemex are at the top. Statistics on the most popular CEXs with futures and margin trading are in the chart below.
What to consider when launching CEX with margin trading:
Such a platform has more complex functionality and architecture when compared to a spot exchange, so the development of such a project will take more time and cost more;
The functionality of the exchange should include not only different types of contracts but also a wide range of tools for analysis and risk management. This includes trading indicators (MACD, RSI, MA, EMA and others), data on open positions, margin calculation, mechanisms for automatic liquidation of positions;
High performance is required. During periods of big changes in the cryptocurrency market, it is often necessary to process many orders at once, and it is important to liquidate positions instantly when trading on margin;
Additional licenses are often required to operate CEXs with derivatives. For example, in the US, you must obtain authorization from the Commodity Futures Trading Commission (CFTC). The controls for these exchanges are stricter than spot exchanges, as leveraged and futures trading is riskier.
Cryptocurrency exchanges
Cryptocurrency exchanges are platforms for instant exchange of coins/tokens for each other or fiat currencies. This service is more straightforward to develop than an exchange, as it has limited functionality. Exchanges are both centralized and decentralized. In 2024, over 1,600 sites were operating, most of them operated by specific companies.
Exchanges attract users with a simplified interface – you don’t need any trading knowledge to exchange cryptocurrencies. However, they charge higher commission fees than exchanges.
P2P Cryptocurrency Exchanges
Both decentralized and centralized exchanges can be such platforms. However, in the case of P2P crypto, users do not transfer their funds to the company. Through the website, visitors find sellers/buyers and complete transactions on their own. The platform only provides a security guarantee for transactions. The assets are held until both parties meet all terms of the agreement.
Things to consider when launching a cryptocurrency business:
The complexity and nuances of development will differ depending on the type of model chosen: decentralized or centralized. Therefore, the qualifications of programmers, architecture, and other features can vary greatly. It is important to determine which option is more convenient immediately;
It is necessary to set up an escrow service and transaction monitoring system. This is the main feature of these platforms, which ensures the fairness and security of transactions between two users;
Keep in mind that such platforms are often chosen not only for exchanging currencies but also for exchanging currencies for fiat. An important role is played by a large selection of different payment systems that visitors can use: e-wallets, bank cards, and so on;
To resolve controversial situations, it is necessary to create a technical support department. It is essential to provide instant communication.
How do cryptocurrency platform owners make money?
About 80-90% of the income of a cryptocurrency business with the help of a crypto tax accountant is generated by commission fees, which is a good cryptocurrency business model. And this is the simplest method. The size is directly affected by the set cost, the amount, and the number of transfers. Cryptocurrency exchanges have a higher commission than exchanges. The main types of commissions are:
Maker/taker. The size varies depending on the type of transactions, trading volume, user level, and other additional conditions. For example, Binance (CEX) has a range of 0.1% to 0.02% for makers, 0.1% to 0.04% for the taker, SushiSwap (DEX) has 0.3%, and Changelly (cryptocurrency exchange) has 0.25%;
By deposit/withdrawal. The amount varies depending on the type of currency: fiat or crypto. Depositing funds is usually free. Examples of KuCoin withdrawal fees: for Bitcoin – 0.0005 BTC, for Tether (TRC-20) – 1 USDT;
For the use of borrowed funds. It is relevant if the platform supports margin trading. The trader receives a “loan” and pays interest for each hour of use. The commission is usually different for different types of coins and may vary depending on the situation in the cryptocurrency market. The margin level also matters. Average range: 0.01% to 0.05%;
For derivatives and futures. If the exchange provides more complex instruments for trading, there is also a fee for using them. It is called a funding fee. It is usually charged every 8 hours. The amount varies from 0.01% to 0.2%. For example, on Bybit (CEX), it varies from 0.01% to 0.10%. The type of contract plays an important role.
Cryptocurrency exchanges can generate income from other sources besides commissions. For example, listing new coins. Projects pay a one-time fee to the exchange. New or small platforms that do not yet have a reputation and an extensive CA usually charge from $5,000. And on giants like Binance, Coinbase listing fees can reach millions of dollars. But here, it is essential to keep in mind that you should not add any token to your exchange without verification – it is necessary to be sure of the quality of the project and the safety of the investment for traders. Some CEX/DEX also issue their tokens. This is earning for the future since you need to increase your capitalization gradually. To do this, you can involve the token in various giveaways and encourage users to buy it to get additional benefits, such as discounts on transaction fees. Examples of exchange coins:
- BNB (Binance exchange);
- HT (Huobi);
- CRO (Crypto.com).
Another popular option on significant platforms is to conduct ICO/IEO of cryptocurrency projects. In this case, the startup will pay a part of the funds received. Such fundraising, if you look at the statistics of significant CEXs, ranges from 1 time per quarter to 3-4 times per month. In other words, this is not a very frequent income.
Foundico: Statistics on the total number of ICOs per month in 2024
Exchanges often offer staking programs. In them, traders “freeze” a part of their assets on the exchange and receive rewards. Part of the profit earned can be taken by the platform. In addition, the exchange can act as a counterparty in transactions with users and thus earn on the spread.
Conclusion
Cryptocurrency trading offers a profitable solution that will generate a stable income. You can combine different types of earnings, from commissions to stealing. However, the number of ways will vary greatly depending on the kind of platform and functionality. Our Merehead team specializes in crypto projects, so you can contact our managers and get advice. With us, you can order both a simple exchanger and a multifunctional DEX on different blockchains.
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