Crypto exchanges’ architecture can be built using various models, depending on factors like centralized, decentralized, hybrid, and peer-to-peer architecture.
Centralized Architecture: In a Centralized exchange, a central authority controls the platform, user accounts, and funds. Users trade through the exchange, which handles everything from matching orders to storing crypto.
Decentralized Architecture: A Decentralized architecture lets users trade directly from their own wallets using smart contracts. There is no central authority, and the exchange does not hold users’ funds.
Hybrid Architecture: A hybrid architecture combines the speed and features of centralized exchanges with the security of decentralized ones. Users keep control of their funds while still enjoying fast and efficient trading.
Peer-to-Peer Architecture: In a Peer-to-peer network, users trade directly with each other without a middleman. The platform helps connect buyers and sellers and may use escrow to keep trades safe.