How to Launch a Centralized Exchange (CEX) with Minimum Cost: A Study Case of Croinex.com Using Firstbyt Solution
The cryptocurrency industry is booming, and centralized exchanges (CEXs) are at the heart of this growth. However, the perception that launching a CEX requires massive upfront investment and ongoing operational costs has deterred many entrepreneurs. Thanks to modern, modular solutions like Firstbyt, it’s now possible to launch a CEX with minimal costs while maintaining compliance, security, and scalability. In this article, we’ll explore a real-world example of Croinex.com, a CEX that successfully launched using Firstbyt’s solution. We’ll break down their costs, operational setup, and impressive growth trajectory over six months, including the impact of a 0.20% trading fee, a 0.10% liquidity cost (reducing to 0.02% by month 12), and adjusted KYC costs. We’ll also highlight their expected target of $25 million in trading volume by month 12, along with the associated costs and revenues.
What is Firstbyt?
Firstbyt is a turnkey solution provider that enables entrepreneurs to launch their own centralized cryptocurrency exchanges quickly and cost-effectively. Their platform offers a modular approach, allowing users to integrate essential components like KYC (Know Your Customer), KYT (Know Your Transaction), custody, liquidity, and trading engines without the need for extensive technical expertise. By leveraging Firstbyt’s solutions, businesses can focus on growth and customer acquisition while minimizing operational overhead.
Why Launch a CEX with Minimum Cost?
Launching a CEX with minimal cost is not only feasible but also strategically advantageous for several reasons:
- Lower Financial Risk
Reducing upfront and ongoing costs minimizes financial risk, making it easier for startups and small businesses to enter the market. - Faster Time-to-Market
Modular solutions like Firstbyt enable rapid deployment, allowing businesses to capitalize on market opportunities quickly. - Scalability
Starting small with automated processes ensures that the exchange can scale efficiently as the user base grows. - Focus on Core Competencies
By outsourcing technical and regulatory complexities to specialized providers, businesses can focus on marketing, customer service, and strategic growth.
Study Case: Croinex.com
Croinex.com is a centralized cryptocurrency exchange that launched using Firstbyt’s solution. Their goal was to create a user-friendly platform for traders while keeping costs low and ensuring compliance with regulatory requirements. Below, we’ll break down their costs, operational setup, and impressive growth trajectory over six months, as well as their expected target for month 12.
Key Components and Costs for Croinex.com
1. One-Time License Cost
Croinex.com paid a one-time fee of $7,000 for the Firstbyt license, which included access to the platform’s trading engine, customizable interface, and integration with essential providers like KYC, KYT, and custody.
2. Monthly Operational Costs
Here’s a breakdown of Croinex.com’s monthly operational costs:
- KYC (Know Your Customer):
- Month 1-2: $150 per month
- Month 3: $200 per month
- Month 4: $250 per month
- Month 5: $350 per month
- Month 6: $400 per month
- Month 12: $600 per month
Croinex.com used Firstbyt’s integrated KYC solution to verify user identities and ensure compliance with AML regulations. As the user base grew, KYC costs increased to handle higher verification volumes.
- KYT (Know Your Transaction):
- Month 1-5: $800 per month
- Month 6: $900 per month
- Month 12: $1,000 per month
Real-time transaction monitoring was handled by Firstbyt’s KYT provider, ensuring that all transactions were compliant and secure.
- Custody Solutions: $500 per month
Croinex.com integrated Firstbyt’s custody solution to securely store user funds using a combination of hot and cold wallets. - Server Costs:
- Month 1-5: $550 per month
- Month 6: $700 per month
- Month 12: $1,000 per month
Firstbyt provided scalable cloud-based server infrastructure to handle trading activities and ensure high performance.
- Employee Costs:
- Month 1-5: $1,500 per month (one employee)
- Month 6: $3,000 per month (two employees)
- Month 12: $5,000 per month (three employees)
Croinex.com started with a single employee who managed customer support, marketing, and general operations. By month six, they added a second employee, and by month 12, they planned to add a third to handle increased demand.
- Firstbyt Monthly Fee (Starting from Month 4): $999 per month
After the 3-month free maintenance period, Croinex.com began paying Firstbyt’s monthly fee for continued maintenance and support. - Total Monthly Cost:
- Months 1-3: $3,500 (excluding Firstbyt fee)
- Months 4-5: $4,499 (including Firstbyt fee)
- Month 6: $5,999 (including Firstbyt fee and second employee)
- Month 12: $8,599 (including Firstbyt fee, higher KYC/KYT/server costs, and three employees)
Croinex.com’s Growth Trajectory
Croinex.com achieved impressive trading volumes within the first six months of launch, thanks to their user-friendly platform, competitive 0.20% trading fee, and effective marketing. Their fee structure was more attractive than big players like Kraken or Coinbase, as well as local competitors in their target markets. After adjusting for a 0.10% liquidity cost (reducing to 0.08% by month 12), here’s a breakdown of their growth:
Months 1-6:
Month 12 (Expected Target):
- Trading Volume: $25 million
- Revenue (0.20% fee): $50,000
- Liquidity Cost (0.02%): $50,000
- Net Revenue: $45,000
- Operational Costs: $8,599
- Profit: $36,401
How Firstbyt Supported Croinex.com’s Success
- Modular and Scalable Solution
Firstbyt’s modular approach allowed Croinex.com to integrate essential components like KYC, KYT, and custody without the need for costly custom development. The platform’s scalability ensured that Croinex.com could handle increasing trading volumes without performance issues. - Automation for Operational Efficiency
Firstbyt’s automated processes enabled Croinex.com to operate with just one employee for the first five months, significantly reducing labor costs. Tasks like user onboarding, transaction monitoring, and customer support were handled seamlessly by the platform. - 3-Month Free Maintenance Period
The free maintenance period provided by Firstbyt allowed Croinex.com to focus on growth and user acquisition without worrying about additional costs. This was crucial for proving their business model and achieving profitability. - Compliance and Security
Firstbyt’s integration with leading KYC and KYT providers ensured that Croinex.com remained compliant with regulatory requirements. The custody solution provided secure storage for user funds, building trust with traders.
Conclusion
Croinex.com’s success story demonstrates how entrepreneurs can launch a centralized exchange with minimal costs using Firstbyt’s turnkey solution. By leveraging modular components, automation, and scalable infrastructure, Croinex.com achieved impressive trading volumes and profitability within six months, with a clear path to $25 million in monthly trading volume by month 12.
With a one-time license cost of 7,000∗∗and monthly operational costs starting and monthly operational costs starting at∗∗3,500, Croinex.com was able to focus on growth and user acquisition while keeping expenses low. Firstbyt’s 3-month free maintenance period provided the support needed to launch their MVP and prove their business model. By month six, Croinex.com was generating $11,500 in net monthly revenue∗∗,and by month 12,they are expected to generate $ 45 000∗∗far exceeding their operational costs.
Whether you’re a startup, a small business, or an entrepreneur looking to enter the crypto space, Firstbyt’s solution offers an affordable and scalable way to launch your own CEX. By minimizing costs and maximizing efficiency, you can build a successful exchange that meets the needs of your target audience while staying compliant with regulatory requirements.