Cryptocurrency exchanges are one of the successful and most popular products of the crypto ecosystem. Crypto exchange owners are making billion-dollar profits by launching a cryptocurrency exchange platform.
A Bloomberg report says that top-ten cryptocurrency exchanges are generating million-dollar profits daily. The first cryptocurrency named bitcoin was introduced in 2009 and it is offering massive earning opportunities to investors.
Top 6 revenue generating schemes of a cryptocurrency exchange
There are multiple ways by which crypto exchange owners can earn profits from their exchange platform, including the following:
1. Deposit and Withdrawal fees
The most basic earning model for an exchange owner is deposit and withdrawal fees. Whenever users withdraw or transfer cryptocurrency from an exchange platform, they need to pay a predefined fee to the platform. Deposit and withdrawal fees vary from one platform to another and there are no set guidelines for the amount of fees.
2. Listing a new cryptocurrency or IEO
Earlier, crypto projects were launched on their own platforms and the process was known as Initial Coin Offering (ICO). Today, the trend has shifted to IEO (Initial Exchange Offering). With IEO, project owners launch their projects on crypto exchange platforms with a larger user base. IEO benefits both – project owners and exchange owners. While project owners can leverage the already-existing users of exchange platforms to get investors for their projects, exchange owners can earn income in the form of a listing fee for listing such projects on their platforms. Here is an insight into the IEO listing fee charged by crypto exchange owners:
Average exchanges charge between 5BTC – 10 BTC per listing
Medium-size exchanges may charge between 10BTC – 50 BTC per listing
Large and top crypto exchanges may charge up to $2 million per listing
3. Launching your own crypto token on an exchange
Crypto exchange owners usually launch their own crypto coin or token on their cryptocurrency exchange.
For instance, Binance launched its own token named Binance Coin (BNB) and is making huge profits out of it. The price of one BNB reached an all-time high of $39.68 in June 2019. It was all achieved by providing an incentive to traders. Investors were offered a 50% discount on a trading fee if they traded using BNB coin. This not only resulted in an increase in the trading volume of BNB coin but also generated revenue for the company.
4. Trading Commission
For trading on white label cryptocurrency exchange software, traders have to pay a certain amount of trading fee for each successful transaction. The fee may vary from 1% – 3% depending on the platform that the users are using.
Coinbase, for example, has a trading fee on a higher side, which is approximately 2.9%. On the other hand, Binance charges just 0.1% for each transaction and this fee can further be reduced by using BNB token. According to the annual Binance report of 2019, the average trading daily volume on the platform is around $2.8 billion. Thus, only the daily trading commission looks like a lucrative option for anyone to start their own exchange.
5. Cryptocurrency staking schemes
Cryptocurrency staking is a scheme where a specific number of crypto coins or tokens are locked in the platform for a specific time and in return, crypto asset owners can earn a commission. In this way, sufficient liquidity is maintained on the platform and a diversification plan is also routed out. As a result of stacking activity, the exchange owner gets hold on to a huge funding amount that is further used to re-invest in another industry like real estate or stock market. This allows exchange owners to diversify their funds and multiply their earnings.
6. Consultancy fees
Cryptocurrency exchange owners also earn revenue by providing consultancy to traders or investors. They guide them on which crypto coins or tokens they should hold or sell off or on which coins they should take a short position. It is like a one-to-one consultation and they also may set up trading bots for investors.
There are immense business and earning opportunities of launching a cryptocurrency exchange platform. If you are planning for white label crypto exchange software development to create revenue streams for yourself, partner with a reliable technical team.
We, at Antier Solutions, offer white label crypto exchange fortified with multi-layer security and market-leading features contributing to high-speed and performance of the platform. Our white label solution can help you launch your exchange in just 7 days. Additionally, we can build a custom exchange for you as per your business needs.
Schedule a free demo of our white label cryptocurrency exchange or connect with our subject matter experts to share your business needs.