Are you looking to do the Crypto Platform?
Merehead is a leading software development company. Talk to our experts to get a turn-key solution!
Write to an Expert
is a peer-to-peer cryptocurrency exchange
. The platform has more than 300 payment methods and wide functionality that allows you to trade digital currency with everyone. Due to this, as well as convenience and reliability, the exchanger has become the main competitor of LocalBitcoins, where several thousand transactions totaling over 8000 BTC are made daily.
Next, we’ll show you how to replicate Paxful’s success
using the cloning script - the concept of developing sites or mobile applications
when you “clone” the functionality of a popular product, but at the same time create a unique design
and rely on a different target audience. Cloning allows:
- reduce development time and cost;
- use a proven marketing strategy;
- reduce financial risks.
Paxful Cloning Script Includes Five Steps.
Step 1. Paxful Business Model
How P2P cryptocurrency exchange works
Paxful is an online marketplace
where people buy and sell each other bitcoins, ether, dash and other virtual money
. The platform acts as the only intermediary that brings the buyer and seller together and provides tools for an honest exchange or chat, where you can arrange a personal meeting.
To search for counterparties, Paxful users publish ads in which they indicate the amount of the exchange, rate (course) and acceptable (available) payment methods: cryptocurrency, PayPal, bank transfers, cash and more. Anyone can respond to such an announcement, provided that the transaction does not imply restrictions on location.
The crypto buying and selling process is quite simple:
Online cryptocurrency exchange
- We are looking for an ad with the right cryptocurrency and an acceptable rate.
- We contact the counterparty and agree on the transaction amount and method of payment. There is a possibility of escrow funds.
- We are making a deal. Write a review about the second side.
takes place on the Paxful platform. If payment is made through third-party payment systems, this also happens on the website or the parties agree on an acceptable exchange algorithm via chat. Atomic swaps are used to exchange one cryptocurrency
To guarantee an honest exchange on the website,
smart contracts with escrow are used. To reduce fraud, with other methods of exchange on the site, a system of reviews and reputation ratings has been introduced.
Step 2. Key Exchange Features
To create an account on Paxful you need to specify an email address, come up with a username and password, accept the Terms of Service and confirm that you are not a robot. There is no registration via social networks and phone, because the crypto community prefers to work anonymously.
. You can add an avatar (photo or any image), indicate the phone number, main currency and very briefly tell about yourself. In addition, you can configure notification settings in your profile. For example, whether to inform about viewing an ad, completion of a transaction or a new chat message and how to do it: notification on the site, email or sms.
Verification, Know Your Customer (KYC)
. The Paxful platform recommends that all participants undergo an identity verification process that is accessible through their user profile. Paxful verification required:
- If wallet activity or transaction volume exceeds $ 1,500, the user must provide an identification card.
- If the wallet activity or the volume of transactions exceeded $ 10,000, an identity card and address confirmation are required.
- If the wallet activity or the volume of transactions reaches “large volumes” (the exact amount is not indicated), users can undergo an extensive financial audit. What is included in it is not indicated.
- If cryptocurrency buyers want to pay the transaction by bank transfer, you need an identity card and proof of address.
Users who fail to verify their identity can continue to use the exchanger,
but a limit on the volume of transactions will be set for them.
The rules for verifying the identity on your site should be determined based on the jurisdiction of business registration and the jurisdiction of your users.
. Everyone who has registered on the Paxful website automatically receives a cryptocurrency online wallet for storing bitcoins. Wallet balance is displayed in BTC and the selected fiat currency. Such wallets can be implemented in the form of real crypto-wallets or in the form of an internal wallet of a site, the funds on which are actually stored on a common platform wallet.
. When creating a cryptocurrency exchange like Paxful, it is important to ensure the maximum security of information storage and exchange, since your site will operate not only with personal data, but also with big money. For this we need:
Cryptocurrency purchase, sale and exchange
- Two-factor authentication. Typically, on cryptocurrency exchanges, for each authorization to the site, they double-check by sending an email or sms with a unique verification code or connect services such as Authy or Google Authenticator.
- Data and system protection from hacking. For more reliable site protection, you can distribute it to several physical servers, implement protection against XSS (Cross- Site Scripting) and CSRF (Cross-Site Request Forgery) attacks, and integrate incoming data filtering to protect against SQL Injection.
- Additional security measures. You can also realize the possibility of holding funds, confirmation with the help of pin codes and tracking IP-addresses during user authorization.
- Compliance with GDPR (General Data Protection Regulation). If your service will be used by EU citizens, then you also need to ensure compliance with the General Regulation on the Protection of Personal Data, which entered into force in March 2018.
. This is the main reason why users will come to your site. For the possibility of exchanging cryptocurrency for another cryptocurrency, cash, fiat and digital money are needed:
- P2P exchanger. Tools for informing the buyer with the seller and providing exchange via the Internet and offline. To do this, you need a book of orders, a match system and other functions. For convenience and speed, it is recommended to implement an automatic exchange system.
- Live chat. It is necessary to discuss the conditions, the possibility of additional verification of the parties, the appointment of a meeting place and other things. Chat can be built into the site or it can be integration with popular managers: WhatsApp, Telegram, Viber or Facebook Messenger.
- Payment instruments. Integration with PayPal, Alipay, online banking systems, etc. Paxful also has the ability to use gift cards Amazon, eBay, Steam and many others.
- For convenience and speed of exchange, the system should bring together counterparties located in one region and / or country. So there’s a better chance that people will make an exchange, since they are likely to use the same currency and payment systems.
. A smart contract guaranteeing the honesty of an exchange transaction. Such a contract first accepts funds from both parties, and then makes an exchange at the agreed rate. It is best if it is open source software so that users can verify the integrity of the smart contract and the absence of errors in the code.
Reviews and rating system
. Allow users to distinguish reliable counterparties from unscrupulous (or scammers). On the Paxful website, such a system is implemented using reviews. They can be positive, neutral or negative. You can leave a response immediately after the successful completion of the transaction (or its failure). The number of positive and negative reviews is reflected in the profile of each participant in the form of green and red numbers, respectively.
. It is needed for information support and solving technical problems. Technical support should work around the clock, since your site will work 24/7. To do this, you need to hire special employees and implement the admin panel. In addition, you need high-quality content for the reference section with photo and video instructions.
Admin Panel Functionality:
- Customizable dashboard. It enables real-time monitoring of buy-sell and send-receive transactions, as well as monitoring user activity.
- The ability to view site statistics (activity, trading volume, etc.), as well as tools for resolving disputes between users with the ability to cancel and / or complete transactions. The rules of intervention should be clearly stated in the User Agreement.
- View user profiles. Shows information about the user ID, his nickname, email, phone, verification status (and the documents by which it was conducted) for each participant.
- Buy-Sell tab. It contains information about a specific transaction: identifier, timestamps, amount, rate, information about the sender and recipient, etc.
- General information about the platform, starting with daily trading volumes and ending with the number of positive and negative reviews. The more data that is monitored, the better, because it contributes to better decision-making on the development of the platform.
Step 3. Monetization of the cryptocurrency exchange
. The site can receive a commission or a fixed amount for each cast for cryptocurrency exchange. The fee should be small so that users do not feel discomfort from its loss. Money can be charged immediately if the funds are already placed on the site’s wallet
or you can use the virtual deposit option when money is collected at the end of the transaction.
. Charged for successful transactions in the form of a specific amount or percentage of the transaction. Payment can be taken both from purchase-sale-exchange transactions, and from operations of deposit and withdrawal of funds.
At Paxful, the commissions are:
- 1 dollar to replenish the wallet. The first 5 transactions per month are free.
- % of Bitcoin sellers. The size of the commission depends on the method of payment: cash deposit - 1%, bank transfers - 0.1%, digital currencies - 1%, bank cards - 1%. Gift card fees vary by vendor. For example, for Google Play and iTunes, the commission is 2%.
- 0,0005 BTC for withdrawing funds to external wallets.
. Advertising promotion fees, banners, contextual advertising and paid links - all this is used on the site and in the Paxful application to increase the profitability of the platform.
Step 4. Marketing Strategy
The Paxful cryptocurrency exchange
was launched in 2014 (the original name was EasyBitz). This is an American startup targeted at the African market, where at that time practically no P2P cryptocurrency exchangers, for example LocalBitcoins, were used. The project positions itself as an international payment platform of the future (PayPal + Uber), which makes cryptocurrency easier and more accessible.
promoted mainly through contextual advertising on search engines and social networks in countries such as Nigeria, Ghana, South Africa, Zimbabwe, Kenya, Egypt, Rwanda, Algeria, Mauritius and Mozambique. Nigeria and Ghana are Paxful's Top Three Markets.
In addition to advertising, the company also used a referral program with two levels of cooperation:
- Level 1. Referrals receive 50% of the commission from the escrow of funds that are collected from traders attracted directly from the referral link.