Crypto Venture Capital

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What are the key features of your white-label cryptocurrency exchange software solution?

Our white-label crypto exchange software solution includes key features such as a matching engine for efficient trade execution, a variety of digital assets available for trading, APIs for integration with other platforms, an enterprise-class wallet for secure fund storage, a user-friendly interface for easy navigation, and liquidity solutions to facilitate trades on your platform or service.

How does a white-label exchange platform work?

Velvet Formula provides preconfigured software solutions of our partners for building crypto exchanges. As a licensed entity, you can choose from a selection of necessary software components to create your efficient crypto exchange.

How much does a white-label cryptocurrency exchange cost?

The cost of a White Label Cryptocurrency Exchange can vary greatly, from tens to hundreds of thousands of dollars, depending on the features offered and the level of customization required.

What is a white-label crypto exchange?

A white-label crypto exchange is a preconfigured, ready-to-deploy crypto platform that can be customized according to customer preferences and then launched under the customer’s brand.

What are the pros and cons of VC funding for crypto projects?

Pros of going for venture capital (VC) in crypto:

  • Improved reputation in the eyes of retail investors
  • Building solid connections with other industry participants
  • No need to pay back capital spent, even if business fails
  • Access to advisory and marketing support from some of the most experienced players in the industry

Cons of going for venture capital (VC) in crypto:

  • Losing some control of the project to VCs as they take on equity
  • Pressure to deliver fast results due to venture capital for crypto investment
  • Need to pass thorough due diligence
  • VCs prefer refraining from investing in risky early-stage projects

How does venture capital funding work in the crypto/blockchain industry?

The process begins with the project's founders seeking venture capital firms specialized in blockchain projects. These firms evaluate the potential success of each project before deciding to invest. After that, the venture capital firm negotiates with the startup regarding the amount of investment, equity or tokens required, as well as the investment duration. Once an agreement is reached, the investment funds are transferred from the venture capital firm to the company's bank account. The startup can then use said venture capital investment in crypto for various purposes, such as hiring new team members, developing new products, and marketing campaigns. The venture capital firm also provides guidance and advice to ensure the company's success, as well as connects the startup to other industry experts.

What are the types of crypto VC funding?

There are 3 main types of VC investment in crypto or crypto VC funding — early stage financing (which includes seed financing, startup financing, and first-stage financing); expansion financing —given to companies so that they can start expanding; and acquisition financing —when a company needs funds to buy out another company or parts of a company. It depends on the stage in which a project is.

What is a VC fundraising in a crypto market?

Crypto venture funding is a type of financing used to invest in early-stage blockchain projects, which involves buying equity or tokens in the project, giving investors a share in the project's future success.

What are smart contract security risks?

  • Reentrancy
  • Takes place when a smart contract calls another smart contract in its code and, when the new call is finished, continues with execution. This action requires the vulnerable contract to submit an external call. Scammers steal these external calls and make a recursive call back to the contract. The scammer can then continuously call the withdraw function of the vulnerable contract, stealing funds
  • Integer Overflow & Underflow
  • Both underflow and overflow issues cause significant differences between the calculation’s actual outcome and expected results, thus undermining the smart contract’s inherent logic, and leading to funds being lost
  • Simple Logic Error
  • Typographical errors, misinterpretation of specifications, and other programming errors

When does a crypto project need a smart contract audit?

A crypto audit is a must, as all smart-contract-based projects are attractive to hackers. A good example of this is the DAO hack on the Ethereum blockchain, which took approximately 60 million dollars worth of ETH and led to a hard fork of the Ethereum network. A reliable smart contract security audit ensures that all possible contract vulnerabilities are dealt with, and users’ personal information and funds are kept safe, hence creating more trust not only for the project itself, but for the blockchain industry as a whole.

How do smart contract audits work?

The process of cryptocurrency audit begins with gathering documentation, such as the codebase, the white paper etc. Then they proceed to run a number of automated tests with smart contract audit tools, which help test for security vulnerabilities. Once this step is complete, it’s time for a manual review of the code, which is a must to avoid false readings. Once the auditor has found issues in the code, they work with the project team to resolve the issues, and finish the process off with a hopefully positive blockchain auditing report. A cryptocurrency audit certification is then issued.

What is a smart contract security audit?

A smart contract audit is the process of reviewing and testing the code of a smart contract to identify potential vulnerabilities and ensure that it functions as intended. A cryptocurrency audit is a very important step in the development of a smart contract-based project, as smart contracts are immutable, meaning that any errors or bugs in the code cannot be easily fixed once deployed.

What is a major con of a centralized crypto exchange?

A major con of a centralized crypto exchange (CEX) is the security risk associated with holding assets on the exchange. Because CEXs control the trading and holding of assets on behalf of their users, users are forced to trust the exchange with the custody of their assets.

It is worth noting that CEX in crypto are centralized and so they are more vulnerable to hacking and theft and also, users are forced to trust the exchange with the custody of their assets, which may pose a risk if the exchange doesn't have enough security measures. Moreover, CEXs can be shut down or censored by governments or other organizations, which can lead to loss of access to funds and assets.

How does centralized crypto exchange work?

A centralized crypto exchange (CEX) works by allowing users to buy, sell, and trade cryptocurrencies through a central platform that is controlled by a central authority.

The process of trading on a CEX crypto exchange typically involves the following steps:

  1. Account Creation: Users create an account on the CEX crypto exchange, which requires personal information such as name, email, and proof of identity.
  2. Verification: Users go through a verification process, which can include providing proof of identity and/or proof of residence. This process is designed to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations.
  3. Deposit: Users deposit their assets, such as cryptocurrencies or fiat currency, into the exchange's wallets. This can be done through a variety of methods, such as bank transfer or credit card.
  4. Trading: Once their account is funded, users can place orders to buy or sell CEX cryptocurrency on the exchange. These orders are matched by the exchange's central matching engine, which finds the best available price for the user.
  5. Execution: Once an order is matched, the trade is executed automatically and the assets are transferred to the exchange's wallets.
  6. Withdrawal: Users can then withdraw their assets from the exchange's wallets to their own personal wallets.

What is a centralized cryptocurrency exchange?

A centralized cryptocurrency exchange (CEX) is a platform that allows users to buy, sell, and trade cryptocurrencies. The main characteristic of a CEX in crypto is that it is controlled by a central authority, which manages the trading and holding of assets on behalf of its users.

How To Do Crypto Project Management Efficiently?

Here are some best practices for efficiently managing a crypto project:

  1. Clearly define the project's goals and objectives: This will help to ensure that everyone on the team is working towards the same objectives and can measure progress.
  2. Create a detailed project plan: This should include milestones, timelines, and deliverables, as well as a clear allocation of responsibilities and resources.
  3. Prioritize and manage risks: Identify and evaluate potential risks and implement risk management strategies to mitigate them.
  4. Utilize agile methodologies: Agile methodologies such as Scrum, Kanban, and Lean can help to increase efficiency and flexibility, as they allow for continuous iteration and improvement.
  5. Use tools and platforms: Use of tools like Github, Trello, Jira, Asana, etc can help to manage the project effectively and also to keep track of the progress and issues.
  6. Continuously monitor and evaluate performance: Monitor the project's progress and performance regularly, and make adjustments as needed to ensure that it stays on track and meets its goals and objectives.
  7. Be flexible and adaptable

How Does Crypto Market Making Work?

Market making in crypto uses market making software for crypto exchanges, that is, advanced algorithms to analyze market data and then place orders accordingly. Market makers for crypto then monitor the order book and adjust their orders in response to changes in the market, benefiting their clients, and contributing to a healthy market.

Who Are Market Makers in Crypto?

Market makers in crypto are a diverse group that varies from professional traders and trading firms, to algorithmic market makers (AMM), liquidity mining pools, over-the-counter (OTC) traders, high-frequency traders and more.

What is Crypto Market Making?

Market making in crypto (also known as crypto market making for token projects) is the process of providing liquidity for a specific token or cryptocurrency on a crypto exchange by placing both buy and sell orders.

What is a Non-Custodial Exchange?

A non-custodial exchange is a cryptocurrency exchange that does not hold the users’ assets, or "custody," on their behalf. Instead, the user retains full control of their own assets and holds them in their wallet. Non-custodial exchanges can be centralized or decentralized, depending on whether they have a central authority. They can also be hybrid exchange crypto, for centralized and decentralized exchange cryptocurrency trading, based on some decentralized crypto exchange software and equipped with decentralized crypto exchange analytics, but with the performance perk of centralized exchanges.

What are the benefits of DEX cryptocurrency?

Custody one of the criticaldefining features of centralized exchanges is that they are custodial. When you want to trade on a cex, you keep your funds in a wallet tied to the exchange, which creates a security risk for traders and investors. With the dex – your funds remain in your own custody.

Assets & features given that cexs have decision-making power over which coins and tokens to include, options might not always reflect what users want to see and interact with, and likely won’t give users any early-bird advantage on new projects. Dexs absolutely will.

Government control since cexs exist as distinct legal entities, they’re susceptible to sanctions and limitations from states. Dexs don’t hold the risk of being shut down tomorrow by external authorities, resulting in clients losing access to their funds.

How Does a Decentralized Crypto Exchange Work?

Decentralized exchange cryptocurrency trades logically occur on dedicated decentralized exchanges for crypto. They are autonomous financial protocols powered by smart contracts that enable crypto traders to trade one digital asset for another with no central authority. Multiple DEX tool crypto is currently available, as decentralized exchanges gain acceptance among users worldwide. And just like numerous DEXs are born each day, so are DEX-specific services, including DEX tracker crypto, and many more.

What is DeFi in Crypto?

To truly grasp what decentralized cryptocurrency is, we need to start with understanding DeFi. DeFi – short for “decentralized finance” refers to a financial system that operates on a blockchain, typically using smart contracts to execute financial transactions and manage assets. The main idea is that centralized systems and human middlemen can limit the speed and sophistication of transactions, while offering users less direct control over their money. This is where DeFi and DEX for token trading come in.

What is VelvetFormula?

VelvetFormula is institutional level platform to provide liquidity for crypto exchanges and best execution services for digital asset managers.

Is VelvetFormula an Exchange?

No. VelvetFormula is helping Exchanges to build and manage solid order books. Connect to multiple trading venues, including our own liquidity pool and as a result increase liquidity on particular crypto exchange.

Is Market Making legal?

Yes. Market Making has been around for many years in the classic financial markets. Most recognized stocks like Facebook or Tesla were traded by market makers in the beginning. There is no legislation that requires licence for liquidity provision services or somehow prohibits it. We are Portuguese company and comply with EU legislation.

Does VelvetFormula employ any Proprietary Trading on it’s Platform?

No. We do not employ any Proprietary Trading on our platform.

For whom VelvetFormula is Most Effective?

A sophisticated financial holding or organization looking for better liquidity on their cryptocurrency exchange
An institution which expect a high level of trade execution and compliance

Does VelvetFormula have any AML/KYC protocol?

Yes. According with regulations, we will identify every client and go through onboarding process.

Can you identify clients or share performance?

VelvetFormula was established back in 2018 and we have experience riding all ups and downs of the crypto market. The contract we sign with our clients is protected with NDA that prevents us from disclosing any specific information or price performance. However we are here to address your concerns and share our rich experience insights.

Does VelvetFormula operate own funds to provide liquidity?

Over time we became confident that the most efficient way is when exchanges use their user's deposits to improve liquidity on their trading platform. Thus we can make sure all price change risks are under control and cost of our service is competitive. While funds are under full control of a client. Nontheless we have an option for clients with legal restrictions — in that case we may use our own funds, however this is an additional service and comes with separate pricing.

What is the price for your services?

Our price depends on the amount of complexity and time VelvetFormula needs to put into each specific project. This approach allows us to tailor our pricing to specific client’s needs.

How do I get connected?

Request access to VelvetFormula Liquidity by filling out this form