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.

[Josefjix]

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.

This sounds interesting and seamless to be honest, because there is no much things on those easy swapping exchange. Now, I would love to ask.

How much would it cost to develop and operate this kind of seamless exchange? Can it take up to $10,000?

[prp-e]

This sounds interesting and seamless to be honest, because there is no much things on those easy swapping exchange. Now, I would love to ask.

How much would it cost to develop and operate this kind of seamless exchange? Can it take up to $10,000?

I am currently doing research for something like this. I guess it can even cost much less.

[RGBTC]

Currently working on a way to help users find the best deal seamlessly.

However, they can confiscate user deposits under their strict rules. If you decide to integrate this service into your site, display a clear and easily accessible disclaimer that the exchange process is beyond your control and that you are not responsible for the risks of failure, confiscation, and fraud.

[TastyChillySauce00]

This sounds interesting and seamless to be honest, because there is no much things on those easy swapping exchange. Now, I would love to ask.

How much would it cost to develop and operate this kind of seamless exchange? Can it take up to $10,000?

I am currently doing research for something like this. I guess it can even cost much less.

It costs way less than $10,000 using existing AMM pools with abundant liquidity. Aggregator works by quoting many pools at once and give their user the best route, usually the one with lesser slippage or positive slippage. Every AMM pools expose API for anyone to use permissionless because doesn't matter where the request come from, they make money regardless and you can also give a fee markup.

You can either build the aggregator by creating your own backend quoting hundreds of pools or simply use unified API like li.fi sdk. They usually deduct transaction fee from user directly. It might even cost less than $50 if you're creating small scale swap aggregate app but a good app might cost more than that.

[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.

This sounds interesting and seamless to be honest, because there is no much things on those easy swapping exchange. Now, I would love to ask.

How much would it cost to develop and operate this kind of seamless exchange? Can it take up to $10,000?

building something like that usually costs more on integrations and ops than the swap UI.
basic quoting, 2-3 on-chain dex integrations, simple routing logic, custodied or non-custodied flow, minimal risk checks can land around that ballpark, but it’s tight.
I was also interested in making a service like that but eventually I learned that the costs can add up very quick.
you must include: dev time (backend quoting/routing + smart contract interaction layer + frontend), infrastructure (RPC/provider costs, job queue for quotes, analytics/logging), security (audits, basic threat modeling, rate limiting), and ongoing operations (market-maker/otc integrations, liquidity partnerships or internal inventory handling, incident response).
if you include compliance/legal and custody/accounting complexity, then 10k is rarely enough.

[Murat]

How much would it cost to develop and operate this kind of seamless exchange? Can it take up to $10,000?

I built mine (tokensfund.xyz) with less than $500 but the time i am spending to fix bugs and marketing is huge. overall crypto market traffic is at all time low & I think this is perfect time to build stuffs.