Frequently asked questions

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Frequently asked questions: Definition of used terms

How does the white label work?

White label means that we will host the exchange (if ordered as "exchange hosted as a service") and customize it with your branding, icon and content. Users of the exchange will not notice that you are not the technical operator due to the customizations made. White labeling is explained [1].

How long does it take to set up the exchange?

In general, the exchange with standard functionality can be deployed in 30 days. It is highly advisable to first test all branding customizations in the front end as well as the exchange functionality in the test installation before opening the exchange to the public. If you want to have further customizations done this will delay the Go Live as the customizations need to be developed and tested. If you want to receive information about the estimated implementation time we would be happy to give you an estimation.

What can be traded on the exchange software?

The draglet exchange is very flexible and can handle any fungible goods, such as:

  • ANY Fiat currencies, such as:
    • USD
    • EUR
    • CNY
  • ANY Crypto currencies, such as:
    • Bitcoin
    • Litecoin
    • Dogecoin
    • Ethereum
  • ANY Crypto tokens, such as:
    • Based on Bitcoin (e.g. Colored Coin)
    • Based on Ethereum smart contracts
  • ANY tokens/certificates based on external systems

Do you rent servers exclusively for us?

Yes, every full licensed exchange software is operated on at least 3 servers exclusively rented for your exchange.

Where will the servers be rented?

We usually rent servers in Germany as they are very cost-efficient and reliable. If you want to have the exchange hosted on servers in a different country, this surely can be done. Kindly reach out to our sales/service team and we will organize the hosting in your desired location.


What are the requirements to set up the exchange?

Requirements from business perspective:

  • Banking account (or implementation of payment processor) so your customers can deposit money into the exchange.
  • Support manpower to administer the exchange (such as user support, fiat management for incoming funds, maintenance of cold storage etc.)

Legal requirements:

  • License for operating the exchange as well as knowledge of local compliance regulations (depends on the licensing process in your local region)
  • We send you a signed and printed contract via express mail (about 3-4 days international delivery time) that needs to be signed and sent back (takes about 2 weeks)


Technical requirements:

  • Setting up your exchange installation (3-4 days)
  • Application for SSL Certificate (can be done synchronously, takes some days usually)
  • rerouting the DNS entries of the domain where your exchange should be operated to our DNS servers (some hours)
  • Customization of your exchange to implement your specific business case (this ranges from hours to months depending on the depth of the implementation you wish)
  • Testing and go Live (some days, but also depends on the size of customizations done)

What are the costs for the exchange?

Project cost estimation:

There are 3 pillars of costs that exist for the exchange software:

  • Licensing fees
    • 8530 EUR per year for the hosted option, 4250 EUR for the download option.
    • Add on costs: monthly costs for each module that is activated on your exchange
  • Operative costs:
    • No operative costs - the exchange license comes with unlimited trades. We do not have any profit share or similar.
  • Customization costs:
    • 65 Euro per Hour of software development to implement your customizaitons. Estimations and offers are done each time you request a change in the software.
    • If changes are minor (or elementary such as custom KYC information fields) they will be done free of charge.

Additional SLA: If you want to upgrade the standard gamma SLA, you can do this for additional monthly costs. (between 900 Eur and 4,900 Eur per month)

Checklist

To create an offer for you we would need following information:

  • How many currencies do you want to have implemented? (please also give the information which currencies should be implemented)
  • Which languages should be implemented?
  • What add-ons would you like to have?
    • SendGrid interface
    • CleverReach interface
    • MailChimp interface
    • Market Maker
    • Merchant Plugin
    • Colored Coins
    • Liquidity Provider
    • Distributed Shared Orderbook
    • Mobile application
  • Would you like to have external systems connected over API?
    • Payment processor for instant payment
      • Only for Deposit? or also for
      • Withdraw
    • CRM System for synchonization for user accounts
    • External system to manage user account balances
  • Would you like us to create a webdesign for your exchange site and implement it?
  • Would you like to have the exchange "hosted as a service" or "download license" (so you can operate it on your own servers)?
  • What extra customizations do you need that are DIFFERENT than the showcase.draglet.com functionality?

In regards of the requirements to open a Bitcoin exchange, kindly find following list:


What are the requirements to set up the exchange? Requirements from business perspective:

  • Banking account (or implementation of payment processor) so your customers can deposit money into the exchange.
  • Support manpower to administer the exchange (such as user support, fiat management for incoming funds, maintenance of cold storage etc.)
  • Contract/Business relationship with the attached payment processors and exchanges.


Legal requirements:

  • License for operating the exchange as well as knowledge of local compliance regulations (depends on the licensing process in your local region)
  • We send you a signed and printed contract via express mail (about 3-4 days international delivery time) that needs to be signed and sent back (takes about 2 weeks)
  • Payment for the licensing fees, add ons as well as ticks (ticks are executed orders on your exchange and need to be bought in advance) - depending on payment way (Bitcoin and Paypal instant, Wire 3-7 days)


Technical requirements:

  • Setting up your exchange installation (3-4 days)
  • Application for SSL Certificate (can be done synchronously, takes some days usually)
  • rerouting the DNS entries of the domain where your exchange should be operated to our DNS servers (some hours)
  • Customization of your exchange to implement your specific business case (this ranges from hours to months depending on the depth of the implementation you wish)
  • Testing and go Live (some days, but also depends on the size of customizations done)

API Liquidity

Liquidity from external exchange via API

You can pull liquidity from an external exchange to your local exchange using the API liquidity add-on offered by draglet. Currently the draglet exchange platform is interfaced with Kraken, Bitstamp and Itbit.

Kindly note that draglet only provides the technical interfacing with those exchanges and any business request like getting your account approved, increasing of deposit / trading limits, higher level of KYC, etc. needs to be directly communicated with the respective exchanges.

Once you have an approved account on the external exchange, generate a pair of Public and Private API keys which allow access to your account via API. These keys will be added to your local exchange to facilitate the liquidity flow.


How liquidity flows via API interfacing.

Let’s assume you have an account on Bitstamp and have a deposit of 100,000 USD in your account and you want to pull liquidity for the USD-BTC market on your local exchange.

A positive USD balance on Bitstamp account will allow you execute ASKs orders on Bitstamp orderbook i.e. Buy bitcoins.

Similarly a positive BTC balance on Bitstamp account will allow you to execute BIDs on Bitstamp orderbook i.e. Sell bitcoins.

The nostro account created on you exchange will read the orderbook of Bitstamp and publish orders from Bitstamp orderbook to the orderbook of your local exchange.

Do note that the total value of ASK orders published by Nostro account will be equal to the USD balance on your Bitstamp account.

Similarly, the total value of BID orders published by Nostro account will be equal to the BTC balance on your Bitstamp account.

Also note that when publishing the order from Bitstamp to local exchange the trading fee on Bitstamp is not included in the price reflected on your local exchange. So the exchange admin needs to add a spread on local exchange market to compensate for Bitstamp trading fees.

E.g. The ASK order on Bitstamp is 0.01 BTC @ 9000 USD/BTC and the trading fee on Bitstamp is 0.1%. When this order is executed on the local exchange Your nostro account sells 0.01 BTC @ 9000 USD/BTC i.e. for 90.00 USD but on Bitstamp account you USD balance is deducted 90.00 USD +0.1% fee i.e. 90.09 USD.


There are two ways how you can recover the fees you pay on Bitstamp:

First option is to set your local exchange fee higher than that of Bitstamp i.e. if you intend to earn 0.25% fee then you will have to set 0.25+0.10 = 0.35% fee on your local exchange. This will result in fee increase for all the trades executing on that market. Even for trades where both buyer and seller are local users.

Second option is to add a local spread. This spread will be applicable only to orders coming from Bitstamp. If you add a spread of 0.1% then that order will be published on your local exchange as 0.01 BTC @ 9009 USD/BTC (9000+1%).


Now if that ASK order of 0.01 BTC @ 9009 USD/BTC is executed by an end user of your exchange, then your account on Bitstamp will automatically execute the corresponding order on Bitstamp.

So now the end user account will be credited with 0.01 BTC and debited 90.09 USD The nostro account on your local exchange will be debited 0.01 BTC and credited 90.09 USD Your account on Bitstamp will be debited 90.09 USD (including trading fee) and credited 0.01 BTC

Now you can withdraw these BTC from collected on your Bitstamp to your local exchange. This deposit can be made to the BTC deposit address of the nostro account holder.

All the trades happening on the local exchange will reflect the `Last Trades` section including the trades happening via API liquidity.

The orderbook of the exchange will be a cumulative orderbook of organic local orders as well as orders pulled via API liquidity.

All orders and trades via API liquidity are considered as local orders and trades as these orders are placed by a local user (nostro user account).