How "non custodial" exchange system works?

[prp-e]

I recently found the websites fixedfloat and swapspace and used them in order to convert different coins to each other (I mostly jump between TON/GRAM and Polygon, because TON is easy to obtain for me and Polygon is something I can use on most of websites accepting crypto like OpenRouter or the ones with Stripe gateway activating crypto option).
Now, I just want to know how they work in a technical level? For implementation of something like those websites, I can simply use FixedFloat API and limit it to some certain currencies, but I just want to know how they work in their core. Do they buy my desired coin from a CEX in their wait time? Do they rely on people who want to do quick exchange? or do they send requests to a lower level API or service for doing the swaps?
Also in a more economic/business side of things, FixedFloat has a rate, but if I use their API's to make my own service, how can it be a money generating business? (not thinking about huge profits, just thinking how this potentially can make money and nothing more).

[OmegaStarScream]

Different swap services do it differently. A lot buy from a CEX like you said, others do have their own liquidity. According to Kycnot.me, ff.io use their own:

https://kycnot.me/service/fixedfloat

AFAIK, if you're planning to implement them (or any swap service), you could probably apply for the affiliate program and then use their API to earn the commission:

https://ff.io/en/affiliate-program-terms

[prp-e]

Different swap services do it differently. A lot buy from a CEX like you said, others do have their own liquidity. According to Kycnot.me, ff.io use their own:

https://kycnot.me/service/fixedfloat

AFAIK, if you're planning to implement them (or any swap service), you could probably apply for the affiliate program and then use their API to earn the commission:

https://ff.io/en/affiliate-program-terms

Thanks. First part of your answer, explains why they usually are out of less popular coins in a lot of times (I assume TON is not that popular outside Iran, Russia or just around where I live).
And about affiliate program, I just do a litte more research. I guess it can be some sort of good entry point to make something useful.

[The Cryptovator]

Now, I just want to know how they work in a technical level? For implementation of something like those websites, I can simply use FixedFloat API and limit it to some certain currencies, but I just want to know how they work in their core. Do they buy my desired coin from a CEX in their wait time? Do they rely on people who want to do quick exchange? or do they send requests to a lower level API or service for doing the swaps?

Most probably you are talking about instant swap, they aren’t non custodial exchanges. The liquidity holding by the swap or exchange, if you looking for a noncustodial exchange then it’s called decentralised exchanges. So the instant swap collect their own liquidity from various exchanges or other sources. When users place swap orders they complete it from their liquidity.

There are many exchanges that use liquidity from some other exchanges or platform as well through API. So you have to read their terms to know how their swap have been working. Also you have to understand different between centralised exchanges and decentralised exchanges as well. Remember, most of the instant swap or exchange are centralised, they are controlled by a company.

[Solarmesh]

swapspace type sites are usually an “aggregation + routing” layer, not a magic internal swapper. at a high level they take your input (from/to, amount), then they route through whichever liquidity source is cheapest/fastest: an on-chain DEX route (swap + liquidity pools), and/or an OTC/market-maker/liquidity provider route, and sometimes internal inventory if they have it.

[prp-e]

Most probably you are talking about instant swap, they aren’t non custodial exchanges. The liquidity holding by the swap or exchange, if you looking for a noncustodial exchange then it’s called decentralised exchanges. So the instant swap collect their own liquidity from various exchanges or other sources. When users place swap orders they complete it from their liquidity.

There are many exchanges that use liquidity from some other exchanges or platform as well through API. So you have to read their terms to know how their swap have been working. Also you have to understand different between centralised exchanges and decentralised exchanges as well. Remember, most of the instant swap or exchange are centralised, they are controlled by a company.

I see. I just studied a few more of these instant swap exchanges, they're basically easier to use centralized exchanges which are using other CEX/DEX services underneath. Since I was thinking about it as some sort of startup project, I just found that aggregation system the best for someone like myself. Currently working on a way to help users find the best deal seamlessly.

swapspace type sites are usually an “aggregation + routing” layer, not a magic internal swapper. at a high level they take your input (from/to, amount), then they route through whichever liquidity source is cheapest/fastest: an on-chain DEX route (swap + liquidity pools), and/or an OTC/market-maker/liquidity provider route, and sometimes internal inventory if they have it.

Exactly. Learning about it is so much fun.