In recent few times, Defi, or Decentralized finance has exploded. According to statistics by Exploding topics, around 80 billion USD of total value is locked in Defi Applications like decentralized exchanges. Also, it is forecasted that by the end of 2026, the total volume will reach $65 Billion USD.
Decentralized finance is one such aspect, that holds most of the economy of the Blockchain and cryptocurrency industry. With Defi exchanges, People are able to exchange and trade cryptocurrencies without any centralized authority, unlike banks. Hence building a defi exchange like Pnacakeswap could be a good opportunity to contribute to the web3 industry and start your entrepreneurial journey.
What are Decentralised Exchanges or Pancakeswap?
Decentralized exchanges like Pancakeswap are web applications without any centralized authority that allows users to swap different coins or do cryptocurrency trading. It eliminates a lot of trading fees since the transactions are peer-to-peer. If any user wants to do more often trading then users can use such exchanges and do seamless transactions at a low cost.
Is it Worth building and Investing in Defi Exchange like Pancake Swap?
As we have seen, the outburst of defi industry in recent years, it is quite necessary and demanding to have exchanges like Pancakeswap. Being a decentralized exchange platform, there is quite a high TPS or Transaction per second and also all the transactions are processed without any lag. Most of the platforms do not store your funds at a centralized location hence, the user funds are always in their custody.
The key feature of any decentralized finance is lending and borrowing. This leads users to take loans without going through any process like at banks. Therefore, building platforms like Pancakeswap or the defi exchange would be always beneficial and rewarding for different people.
How to build a platform like Pancakeswap?
Some of the common points to build a Defi exchange like Pancakeswsap are the following. These points would help you to get good attraction and a high total value locked or TVL at your decentralized exchange.
- Decide on a theme for the decentralized exchange and create a UI around it. For example, the theme is around food items like pancakes for Pancakeswap
- Study the basic features of the decentralized exchange and do complete research on how to improvise them and build some unique features along with them.
- Hire a team, or a Blockchain Engineer from any Defi and Blockchain development company, if you don’t have any in-house developers.
- Strategize the complete process for building the dex and add the features that you listed in Step2.
- Build a clone script. Such scripts allow you to easily build a decentralized exchange with some basic features. If you want to make the process quicker for your customers, you can provide them with this script to deploy decentralized exchange without any hassle.
- Do proper marketing and build a community for your decentralized exchange.
Security of the decentralized exchange is quite important, as the users would be putting their real money, hence you should be able to get the code auditing so you can fix any bug or vulnerability of the code.
Some of the important features that you should include in your decentralized exchange.
- Liquidity Adding
For any trade, it is quite essential to have liquidity in the market for the asset. A decentralized exchange should allow users to add liquidity for which they can be rewarded with the staking rewards.
- Lottery Events
Pancakeswap has implemented a unique feature called the lottery. People can take part in such lotteries and try their luck to win some Cake tokens. Such a feature is quite good to have as it keeps users engaging with the platform and staking more of their funds.
- Passive Crypto Earning
Most of the defi platforms are specialized and famous for helping users to earn passive income. This feature allows users to either stake some funds or lock them in a smart contract for which they can earn some interest.
- Governance and Voting System
Since a lot of community members would be using the decentralized exchange, hence it is good to include a governance and voting feature. It will allow you to create a proposal and users can vote if they want to integrate any feature written in that proposal.
- Conduct various staking events
With the help of stacking events, you can let your users engage with the platform and stake their tokens in different pools.
- Yield Farming and Staking
Whatever token you launch with your decentralized finance exchange, create some utility around it. For example, the CAKE token by Pancakeswap is used for staking and rewarding users.
How much time and cost does it take to build a decentralized exchange?
When it comes to the time estimation and the cost to build the decentralized exchange, it depends upon the features and integrations.
The average time taken to develop a basic decentralized exchange could range from 4-5 months. Whereas if you want to do end-to-end testing and build a complete application along with the website, it can take some more time. Some of the main components that take time are the following.
Based on the requirements and the competitors, the designers would build the UI and UX for the exchange.
The front end is the complete end-to-end website, for your decentralized exchange. It is the homepage or a page of information about your decentralized exchange.
Based on the logic and the smart contract integration, the developers would structure the complete architecture of the application. This structure is gone through various revisions as per the requirements of any trading company. If an exchange is built end to end then this is the most time-consuming step.
Smart contracts are the most important component of any decentralized exchange. And it requires a complete end-to-end security check so the user’s money is safe and not prone to any hack.
Cryptocurrency Placement and deployment
If you want to launch your own cryptocurrency, then it requires a completely different process. Based on the chain on which you want to deploy the decentralized exchange, the token is developed. Once the token is developed, a huge marketing campaign and public sale are done for the community users for building liquidity.
After complete development of the Application, Quality assurance and due diligence are done. Once testing is completely done, the developers take one step further and deploy it on the main net.
If you are an aspiring entrepreneur and want to build a business in the blockchain space, then decentralized exchanges like Uniswap or Pancakeswap would be quite great to implement. As per the statistics, the dexes are in quite high demand and a lot of people are trying to explore this domain.
Building such an exchange might not be a difficult task as now a lot of Whitelabel solutions are coming up which you can get from the defi development company. But if it needs to be developed from scratch and you are coming from a non-technical background, you can consider consulting with a blockchain development company, that would help you to build an end-to-end solution for decentralized exchange.
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