June 21, 2022

MobiDAX: White Label or Custom Software SaaS for Cryptocurrency Exchange Platform?

Comparing a 'White Label Cryptocurrency Exchange Platform' vs developing a 'Custom Exchange Platform SaaS' is a business critical decision. We decided to draw this simple analogy to help you visualize see the difference between these options.

In our analogy, we compare Cryptocurrency Exchange Software to what we all know and understand - cars, and car ownership. Lets introduce the players and their counterparts:

White Label Exchange Platform
Software = Rental Car
Software Provider = Rental Car Service Provider
Upkeep and Maintenance: Performed by the Software Provider

Custom Software Exchange Platform
Software = Car you purchased and own
Dealership = Software Development Company and/or Opensource Code
Upkeep and Maintenance: Performed by In-house Developer or Software Development Company

White Label 'Rental' Overview:
To gain access to this software, all you have to do is confirm your company's identity and pay for gaining access to the solution. Provider is responsible for servicing your rental and keeping it running. Another huge plus is the White Label Provider, already supports an entire fleet of customers using the same software. So their level of responsibility for maintaining the up-time and availability of this software is relevant to this entire group and not just your instance.

Typically the service provider, will have different platform options available to you, and you can choose to upgrade and downgrade based on your needs. They work with a number of 3rd party services that you can integrate into your software, but you're limited to these services and the prices dictated by the providers.
Software Provider is responsible for software maintenance, and keeping the fleet up to date. Typically the first is done well and the latter is entirely based on the provider's vision of what they consider competitive for the marketplace. Software Provider takes full responsibility to fix the software in the event of break down, assuming the break down is not your, or 3rd party's fault.

White Label PROS:

  • Fast time to market. Basically pay the invoice. Provider will embed your logo, add your colors and within 3 days to a couple of weeks your cryptocurrency exchange is live.
  • No need to employ a software developer or a software development team for upkeep and maintenance.
  • Typically no cloud hosting fees, but this varies from one provider to another and is normally restricted in your contract.
  • Typically other services already supported by the White Label can gradually be added as you come to terms and sign the agreements with these 3rd party service providers.
  • Some White Labels offering in depth customization to the Front-end UX/UI.

White Label CONS:

  • You do not and cannot own the software. When being evaluated this cannot be added as a company asset, rather marked as an expense.
  • You do not control the software. In some regulated jurisdictions it is a requirement for you to own and be responsible for the software. In such scenario you would be limited from registering your company and provisioning your services in these geographic locations.
  • Customization is very limited. Front end can be customized within the provider range of customization defined by the White Label Provider.
  • Back-end Customization is not possible.
  • Integration of unsupported 3rd party services is nearly impossible. This means that if the White Label Provider doesn't support the service, the likely-hood of getting this service integrated into your platform is close to none.
  • Revenue share on exchange profit.
  • Monthly Rental Fee.
  • Contract based restrictions and corresponding fees.
  • High cost of customization, coin integration and other development services. White Label Providers charge a premium hourly fee because they are the one and only specialist and the only ones to have access to the software. Closed source.
  • Inability to directly impact platform performance.
  • Inability for regional scaling to impact local platform performance.
  • Inability to directly impact platform features and usability for both users and admins.

Custom Software Exchange Overview:
Just like the cars you buy from different manufacturers, from Ford to Honda to Tesla to Lamborghini, Custom Exchange Platforms differ from one software provider to another. Software development companies and their software vary in quality of service, software performance and reliability. Whilst the 'Lamborghini' segment of Custom Software Solutions, comes with a hefty price tag, there is another option software based on Opensource code. For example, back-end components of MobiDAX are based on Opensource Software Peatio and Barong.

Using Opensource has some obvious advantages, including: software ownership, liberty to customize the software for supporting the features outlined in your business plan and regulatory requirements and the ability to choose and integrate 3rd party services, among other similar benefits. In general, the only limit is the budget you can allocate to customization, but even then, with a good Product Owner, and an experienced development team, you can still expect to gain Lamborghini like performance from a customized Honda, at a fraction of the price.

Custom Exchange Platform PROS:

  • Software Ownership is on your company books and counts as a company asset
  • Varying time to market depending on the provider. With MobiDAX, for example, you can have an exchange supporting BTC, ETH and ERC20 up as fast as it takes to synchronize Ethereum node - typically 5 days
  • Front-end customization friendly
  • Back-end customization friendly
  • 3rd party service friendly - integrate all the services you want via API or develop your own on top of the code base
  • Add your own Blockchains, coins, assets, indices, security and utility tokens
  • Develop and customize your affiliate and marketing programs
  • Add social elements, leaderboards, ranking and reward systems
  • Add more language options
  • Customize your admin panel and add features for your Operations team
  • Flexible hosting options - cloud and bare metal hybrids
  • Control and improve service performance
  • Ability to control feature release and establish dialogue with the user base around the topic

Custom Exchange Platform CONS:

  • Hosting costs. Athough this is something that can be optimized with infrastructure scaling, this is an existing overhead and scaling must be done by an experienced DevOps engineer, otherwise the selection of your hosting provider and hosting costs can become a substantial expense.
  • Monitoring and software maintenance
  • Employment of, or taking on the role of Product Owner
  • Employment of, or outsourcing a part time DevOps team for Platform Maintenance.
  • Platform customization and QA, or employing a 3rd party team requires a careful approach and will carry an overhead.

Generally speaking, our vote goes to the Custom Exchange Platform option as the preferred solution. Our team, MobiDAX, has both Custom and White Label options available, but our preference for customization flexibility, coupled with code ownership is typically the preferred option for our customers.  Most of the cons mentioned for Custom Exchange Platform SaaS are normally outweighed by the packaged pricing, revenue share on exchange fees, high cost of customization and other limitations set in place by White Label Providers. Although different business needs require different solutions, so there's no such thing as one size fits all.

Today, Financial Technology evolves at a tremendous rate with so much attention directed to the sector with Bitcoin and Ethereum paving the way. The most sensible approach for any FinTech business today, is to connect with knowledgeable teams willing to share their experiences and absorb the shared information to educate themselves, before making business critical decisions.

MobiDAX team is composed of Architects, Developers, Business Analysts, Product Owners, Project Managers and Quality Assurance specialists. Our team has been building custom Exchange Platforms for trading digital assets over the past 4 years. From Enterprise Solutions to a myriad of random features for regional and local exchanges. Our consultation is free and we think that you will enjoy the knowledge base and experience we gladly share with you.

Andy Smith

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