DeFi Exchange Development Company

Decentralized finance, or DeFi, has become one of the hottest trends in the cryptocurrency industry. Every day more and more users are attracted by the ability to conduct financial transactions without intermediaries and government regulation. This article will discuss decentralized exchanges, a new DeFi trading platform based on blockchain and smart contracts, and how to develop such an exchange. In addition, we will advise on how to choose the best company to develop DeFi exchanges.

What is a DeFi Exchange?

DeFi is an acronym for Decentralized Finance. The abbreviation refers to individual projects and an ecosystem of financial instruments and services based on decentralized blockchain technologies, such as Ethereum or Polkadot, that allow users to access financial services without the involvement of centralized organizations, such as the government, banks, and brokers.
Accordingly, DeFi Exchange is a new type of cryptocurrency exchange that operates based on decentralized blockchain technologies and allows users to change tokens without centralized management and intermediaries. On DeFi-platforms, all transactions are conducted directly between exchange members using blockchain technology, smart contracts, and other DeFi protocols.

The key benefits of trading on DeFi exchanges are:

• Security. DeFi exchanges use smart contracts that secure transactions and protect against fraud.


• Transparency. All cryptocurrency transactions on decentralized exchanges are open and available for verification on the blockchain, ensuring full transparency and transparency of the trading process.


• Privacy. DeFi crypto exchanges do not require users to provide personal information such as name, email, phone number, or address so users can trade tokens anonymously.


• Passive income. Decentralized exchanges provide many opportunities to make money from cryptocurrency through staking, lotteries, predictions, income farming, cryptocurrency lending, etc.


• Low commissions. Trading on DeFi exchanges is cheaper for the user than on centralized exchanges, as there is no need to pay commissions to intermediaries and other centralized services.

How do DeFi exchanges function?

Three types of decentralized cryptocurrency exchanges exist, automated market makers, order books, and aggregators. All of them allow investors and traders to trade directly with each other through special smart contracts. Here's a brief description of each type of DeFi exchange.



DeFi exchanges with order book (Order-Book-Based-Exchange). This is the most common decentralized crypto exchange type that uses a traditional order system based on a market cap. When a seller places a buy order, his order goes into the market and is matched against buyers' orders based on price and volume. When two buy and sell orders match, assets are automatically exchanged through special smart contracts that act as escrows.

There are two types of DeFi exchanges:

• On-chain order book. Such exchanges record all transactions for each asset in a blockchain. This makes the platform more secure and transparent, but it may run slower if the blockchain has low bandwidth or the network is overloaded.


• Off-chain order book. Such platforms process order book trades off the blockchain. Only cryptocurrency deposit/withdrawal transactions from the exchange are recorded on the blockchain. In other words, the blockchain in the scheme is used for settlement but not clearing. This speeds up transactions but makes the platform less secure and confidential.

Automated Market Makers (AMM). This kind of DeFi exchange abandoned traditional orders and the stock market. Instead of them, AMM exchanges use special pools of liquidity, working based on smart contracts. Users fill these pools with their tokens in exchange for the right to receive a share of trading commissions, and the rate is formed based on supply and demand: the fewer tokens A in the pool and the more tokens B, the higher the price of token A will be. Examples of AMM exchanges are Uniswap, Balancer, and Curve.

DeFi aggregators. These platforms aggregate liquidity from many platforms at once. They allow users to conduct cryptocurrency transactions on other platforms for a small fee. This avoids liquidity problems, reduces the likelihood of slippage in large orders, and can offer traders the best possible price in the shortest possible time. But the cost of all these perks will be the increased possibility of failed transactions and the higher cost. Examples of DeFi aggregators: 1inch, 0x, and Coin98.

How to develop a DeFi crypto exchange?

Step 1: Choose a business model. The primary sources of income for all crypto exchanges are transaction fees. Commissions can be charged on the creation of limit orders and the execution of market transactions. Charging additional commissions for transactions using specific tokens or accessing VIP features is also possible.

However, the DeFi exchange business model is not limited to commissions from trading. For example, there is a model in which the exchange can charge a small fee for the ability to participate in various DeFi protocols and generate revenue from steaking, liquidity, etc. In addition, the exchange can issue its token, which will give access to VIP features and generate income from commissions.

Step 2: Hire a development team. Choosing the right development company to launch your DeFi exchange is critical to the success of your future project. The developer must have the knowledge, experience, and competencies to develop DeFi projects and use advanced technologies and best practices to create a secure, influential platform. In addition, the developer should provide a full range of services, including consulting, development, testing, startup, and support, to ensure the project is successful on a long-term basis.

The article's next section will describe how to choose such a developer.

Step 3: Decide on the functions of the DeFi exchange. At this step, you must define the core features and the specific features and tools provided to your users. The right functionality helps you create a unique product that meets the needs of your target audience on competitive terms.



Step 4: Design the architecture of the DeFi platform. Initially, you need to determine the type of architecture best suited for the project, such as microservices or monolithic architecture. Then there will be database design, choice of tools and technologies, definition of security requirements, and creation of infrastructure for development, as well as testing and deployment of the application. An important step is creating a blockchain schema, selecting a suitable protocol and developing smart contracts to implement the platform's core functionality.



Step 5: Develop the UX/UI design of the crypto exchange. This includes the development of user interfaces (UIs) and user experience (UX) that ensure the ease of use and efficiency of the DeFi exchange. This requires a competitor analysis, end-user needs and behavior, and consideration of the platform's security and functionality requirements. The design of the future DeFi exchange should be focused on user-friendliness and a high conversion rate, which contributes to the growth of the user base and profitability of the exchange.



Step 6: Write the backend and frontend code. This is a complicated and time-consuming process requiring special knowledge and skills. Backend developers are responsible for creating the server part of the crypto exchange, which processes and stores data about users, trading pairs, and orders. Whereas front-end developers create the interface for users through which they can interact with the exchange. These two components interact with each other, ensuring the operation and usability of the exchange.

The technology stack for DeFi exchange backend development:

• Programming languages: Solidity, Rust, JavaScript, Python, Go.


• Blockchain: Ethereum, Binance Smart Chain, Polkadot.


• Infrastructure: IPFS, Swarm, AWS, Azure, Google Cloud.


• Protocols: 0x, Uniswap, Kyber Network, Bancor, Curve.


• Databases: MongoDB, PostgreSQL, MySQL, Redis, IPFS, BigchainDB.


• Protocols: IPFS, Web3, 0x Protocol, Loopring Protocol.


• Frameworks: Truffle, Hardhat, Brownie, OpenZeppelin, Waffle.


• Cryptography: zk-SNARKs, hash functions, signatures.

Technology stack for DeFi exchange front-end development:

• Programming languages: HTML, CSS, JavaScript, TypeScript.


• System design: Material UI, Ant Design, Bootstrap.


• Frameworks: React, Vue.js, Angular, Svelte.


• Libraries: Redux, MobX, Web3.js, Ethers.js.


• UI-components: Material-UI, Ant Design, Bootstrap, Tailwind CSS.


• Mobile app development: React Native, Flutter.


• Infrastructure: AWS, Azure, Google Cloud.

Step 7: Test the created product. When developing a DeFi Exchange, you need to test at different stages of development, starting with unit testing of individual components and ending with testing the system as a whole. In testing, you must ensure the entire platform's functionality, security, and performance are working correctly. It is also necessary to verify compatibility with different browsers and operating systems. Various approaches, such as manual testing, automated testing, functional testing, load testing, etc., can be used for verification.

Step 8: Run the help desk. This includes creating communication channels with customers, such as email, phone, online chat, etc. You must also identify and train employees who will answer traders' questions and solve possible problems. In addition, you need to develop a knowledge base and instructions for users so that they can quickly find answers to their questions and solve problems on their own.

 How to select a DeFi exchange developer?

Choosing the right development company is critical to successfully developing a DeFi Exchange. A wrong choice can cause code bugs, security holes, unreliability, and insufficient functionality. On the other hand, qualified developers can create a secure, fast, and convenient platform for cryptocurrency trading with a full set of necessary features. Also, a good development team can speed up the development process and help avoid problems in the future.

To select a DeFi exchange development team, you must choose carefully, read their portfolio and work experience, ask questions, conduct interviews, and look at their professionalism and approach to work. Firstly you need to pay attention to the following points:

• Experience. Make sure the team has experience in developing DeFi projects. Research their past work and find out what solutions they used, what technology they used, and what difficulties they solved.


• Qualification. Find out what skills and knowledge each team member has. Developers must be familiar with development technologies such as Solidity, JavaScript, React, Node.js, and others used to develop decentralized cryptocurrencies.


• Communication. Your DeFi project development company should be open and willing to communicate. It is vital that you can communicate freely with them, ask questions and get prompt and complete answers.


• Level of service. Ensure your development team is ready to provide you with a full range of services, including analysis, prototyping, development, testing, support, and product updates.


• Reputation. Research the team's reputation online. Find out what others say about them in reviews, forums, and social media.


• Price. Of course, the cost of developer services plays a significant role. However, you should not choose a team only because of the low price. Selecting a company that provides the best value for money is better.

Why should you choose Merehead?

Developing a cryptocurrency exchange is quite a complex process that requires experience and competencies in various fields. A successful launch of such a project requires in-depth knowledge of blockchain technology, cryptocurrencies, and decentralized finance and extensive experience in developing secure and high-performance crypto trading platforms.

Merehead has experience and competencies in all of the above areas, which allows us to develop sophisticated DeFi solutions, including exchanges, at a high level. We provide the full range of services from business requirements analysis and architecture design to backend, frontend, and help desk development. We guarantee the high quality and security of the product, as well as meeting project deadlines and budgets.

The advantages of working with Merehead.

Extensive experience. Our development team has extensive experience in DeFi protocol development. Merehead works with various technologies and tools, allowing us to offer individual solutions and approaches to each project. Thanks to our extensive experience, we can develop exchanges quickly and efficiently, taking into account customer requirements and market peculiarities.

High qualification. Every Merehead developer has experience working with the latest technologies and tools, which allows us to create high-quality and innovative products. Besides, our team constantly learns new technologies and development methods to keep abreast of the latest trends and practices in DeFi exchange development. This allows us to create awesome products that meet all modern standards and requirements.

Integrity and transparency. Our company strives for a long-term relationship with our clients, and we are always ready to discuss any issues openly. We follow deadlines and commitments and are always prepared to give recommendations and advice to customers based on their experience and knowledge. This creates a trusting relationship with clients and ensures that the project will be completed to the requirements and expectations of the client.

Individual approach. The development team is willing to listen to the needs and requirements of the customer to create a unique and optimal product. We also continuously work closely with the customer at all stages of project development, from planning and design to testing and implementation. This allows us to achieve the best results and satisfy each customer's needs to the fullest extent possible.

Security. Merehead follows cybersecurity best practices. We thoroughly check the code for vulnerabilities and regularly update our libraries and frameworks. In addition, our team follows the "security by default" principle to ensure the security of user data and protect the exchange from hacker attacks. This makes Merehead a reliable partner for DeFi exchange development, where security is one of the most critical aspects.

Cost. We offer competitive prices for our services and flexible payment terms, making cooperation with us affordable for many clients. Our company is also ready to provide discounts and bonuses depending on the complexity and volume of the project, which will save money when developing a DeFi market.

Services offered by Merehead

DeFi Exchange Development.

Merehead offers DeFi cryptocurrency exchange development services that include a complete development cycle: from requirements analysis and architecture design to backend, frontend, testing, launch, and further support. The created crypto platform can be used for trading, borrowing/lending, income farming, betting, etc.

DeFi Token Development.

Merehead provides a comprehensive solution for creating unique tokens that can be used in applications and exchanges. The service includes a detailed market and competitor analysis, definition of token requirements and functionality, development of technical specifications, creation and auditing of smart contracts, and provision of post-launch support and maintenance. Merehead also advises selecting a blockchain platform and setting up the infrastructure for token deployment.

DeFi Cryptocurrency Wallet Development.

Our development team offers services for creating a wallet for storing various types of cryptocurrencies, including tokens created on the Ethereum blockchain, BNB Chain, Cardano, Polkadot, Solana, Tron, and others. In addition, Merehead also offers integration with other payment systems and the ability to transfer cryptocurrencies between blockchains.

DeFi Smart Contracts Development.

The Merehead team can create different types of smart contracts, such as contracts for liquidity, tokens distribution, contracts for trade automation, etc. During the development process, Merehead adheres to all standards and meets all requirements to ensure the reliability and security of the created smart contracts.

Development of DeFi Yield protocols.

These protocols allow users to generate income by participating in liquidity on DeFi-platforms and providing credits. Development of such protocols includes the creation of smart contracts and integration with blockchain networks such as Ethereum, BNB Chain, Polygon, and others. Our company Merehead can develop DeFi Yield protocols tailored to each client's specific requirements and needs, ensuring the high security and reliability of the developed protocols.

DeFi Lottery Development.

This service includes developing smart contracts to create a lottery system and payout of winnings, integrating with cryptocurrencies and blockchain databases, creating the user interface and application design, and testing and support of the application. Merehead provides flexible customization of lottery rules, including setting winning odds and payouts and implementing unique solutions.

Staking system development.

The service includes creating software solutions that allow users to earn additional cryptocurrency by participating in confirming transactions on the blockchain. The company offers the creation of customized staking platforms, rewards management, the connection of various protocols, and much more. The development is carried out by the requirements and wishes of the client and can be adapted to work on different blockchains.

Our experiences in DeFi development

Our recent projects

Sport NFT Marketplace  - it is a platform for selling sports NFTs using ERC-1155. All tokens are issued in cooperation with sports teams and players or their official representatives. Study the case.

Coinbird/CEX - cryptocurrency exchange with high-level security and safety. Furthermore, it supports operations with fiat currencies. Study the case.

AltcoinsHub - it is a P2P exchange that helps to trade all popular cryptocurrencies.

Summary

DeFi exchange development is a complex and time-consuming process that requires experience and qualification. Merehead specializes in DeFi product development, offering DeFi exchange, tokens, cryptocurrencies, and smart contracts development services. Our development team has many years of experience in blockchain, has high qualifications, and provides individual approaches to each client. In addition, we guarantee the security of the developed software and honesty in our work.