Web3 based applications are increasing day by day. This is due to the habit of people moving towards decentralization. Web3 not only promises decentralization but also gives equal importance to user data ownership, privacy, and security.
As of now, the web3 apps are heavily populated in defi, NFT, and Crypto Exchange. When the technological framework for building the web3 is advanced, every industry will make use of the web3 ecosystem. In this blog, we will talk about Web3 Crypto Exchange development, benefits, architecture and its needs.
Web3 Crypto Exchange Architecture
Crypto exchange that is built with decentralization and powered by smart contracts is called Web3 based exchange. No one is responsible for handling the cryptocurrency transactions, user data, and the business logic behind it. The architecture of the web3 exchange is entirely different from web2 based exchange. Let us break down the web3 backend, frontend and database structure and see how it differs from Web2.
Image source - Preethikasireddy.com
- Frontend - The frontend of Web3 is the same as the web2. It can be any software library that the developers used to be. For example, most of the dApps developers use React.Js, Node.Js and Next.Js for building a seamless user interface. The UI programme is written on the web server and connects with the smart contract logic to work synchronously.
- Backend Logic - The smart contract is the functional validator that streamlines how the web3 app is operating. It holds the backend logic and is connected with the frontend to visualize the functions. The smart contract is deployed on the Ethereum virtual machine which is structured using distributed ledger technology(DLT).
- Database storage - Blockchain nodes are the database system in web3 applications. Blockchain nodes are nothing but the users who interact with them. Everyone’s data is entirely stored in the blockchain network and validated by the peer networks. When the backend logic needs data to proceed inside the web3, it interacts with nearby nodes and performs the function.
Related Read - Crypto Exchange Architecture
Why do we need Web3 for Cryptocurrency Exchange?
Technology often mirrors its past… As the global economy went online, we replicated the same social structures that we had before.
- Gavin Wood, Ethereum Cofounder
Web2 had got the paradigm shift when things like Social, Cloud, Mobile came into existence. The database management is relentlessly cheap with the cloud service providers, peer-peer interaction becomes way more easy with social networks and mobile brings the entire world into the pocket.
But things are changing. Web3 is operating on the Open, Trustless and Permissionless networks that the users are loving. The web3 application is built by the open source algorithms that any developers around the world can mutually interact to build.
The trustless nature is the system allows users to interact without a trusted party. The permissionless state is that both content providers and participants can freely get involved without getting censorship or governing authority.
While we discuss Web3, we need to talk about the technological innovations behind Web3. Edge computing, Decentralized data networks and Artificial intelligence make it work.
Web3 Exchange benefits you should know
In earlier days, Centralized web2 exchanges are controlling the user fund through their in-house fund management system. Any issue or internal collapse in their protocol would lead to the massive amount of fund loss. This can’t be retrieved easily as the cryptocurrencies transactions are immutable.
This is where Decentralized Web3 Exchange came into the limelight. In web3 exchange, user funds are maintained in the cold wallet as the users alone have the fund control with the usage of private keys. There is no place for fund loss as the entire system relies on smart contract validation and fund management is more secure.
The scalability is the biggest hurdle every crypto exchanges face when they experience a sudden surge of user volume. The server ability, bandwidth, infrastructure is limited in web2 exchange while comparing to Web3.
The web3 exchange is operated in the blockchain nodes in a peer to peer way hence the scaling is automatically adjusted as the user volume expands.
The security is the crucial part when considering crypto exchange transactions. There is always a place for centralized servers to give hope to hackers. But in web3 exchanges, the data theft & hacking is not possible as the anonymous people can’t locate where the data resides and how to falsify them.
Why choose Hivelance for Web3 Exchange Development?
Hivelance is the right place for developing your web3 crypto exchanges in an affordable way. We have been building web based crypto exchanges since the last few years and have achieved 100% project success ratio.
The recognition we receive and client satisfaction are the significant part of growing ourselves as the best Web3 Exchange Development company. We have experts in all the technology frameworks, managing technical infrastructures, and giving support post launch.
Talk to us and get started your Web3 Exchange