Why Companies Must Strike a Balance While Hiring White Label Crypto Exchange
As interest levels of cryptocurrencies continue to surge in the digital world, white label crypto exchange solutions have become the shortcut for creating a robust exchange and capturing the market.
In this article, we will see the benefits as well as some disadvantages of White label solutions
Advantages of White Label solutions
Utilisation of White label solutions enable quicker access to the target audience. Many companies find it more effective than building an exchange from scratch going through the various stages of development in a cumbersome manner. With all core features in-built and pre-testing done before delivery, White label solutions are the go-to for every firm looking to grab a quick position in the fast-evolving Cryptocurrency exchange software industry.
Creates adequate liquidity
Businesses can make use of abundant liquidity rendered through the white-label solutions. Liquidity leads to higher trading volume and improved activity on the firm. It improves the trust imposed on the platform. Companies which are in expansion mode will benefit from access to a greater liquidity pool improving fund management.
Better use of technology
By using the latest technology provided through White label solutions, firms can stay ahead of their competitors. Though significant costs are involved as operations scale up, firms can remove the burden of building technology. It helps in reducing expenses on manpower and maintenance. White label solutions come with bug-free features ensuring greater output and efficiency.
Disadvantages of using White Label solutions
Lack of support in daily operations
While the benefits of not having a dedicated tech team are appreciable, white-label solutions do require assistance in day-to-day operations. Certain modules need to be applied efficiently for Know your Customer (KYC) verification, compliance, administrative support, and Customer relationship management (CRM). Interactive charts and graphs may also be needed for a detailed analysis of competitors and movement in markets. As the scope of expansion grows, white-label solutions need to be updated regularly to keep moving ahead. Experts need to be consulted from time to time.
Poor security practices
Some white label crypto exchange solutions may be provided by companies that do not have adequate knowledge of the cryptocurrency market. So, their solutions may consist of a lot of bugs due to poor coding leading to incidents of hacking, data breach, and identity theft. This can tarnish the reputation of the firm as there are higher chances of swindling of funds which can hamper the confidence of investors and traders. It can also lead to litigation in courts for compensation to be paid. Hiring an external security professional would be helpful for cryptocurrency exchange software companies in such dire circumstances.
Low entry barriers
Not every firm can afford white label solutions initially. Adoption depends on the extent of operations of the firm if it operates regionally or nationally. There are more chances of a firm using White label solutions during an expansion phase. Companies may struggle to decide similarly offering solutions. It is better that firms choose reliable and experienced providers who have delivered a great performance to many clients. Many scammers can pretend to offer great trading engines at low prices, but the results may prove to be below average.
Overall, white-label solutions have captured the imagination of the crypto trading community magnificently. However, their pros and cons must be taken into account seriously by cryptocurrency companies.
July 20, 2020