What Happens Behind the Scenes of a Crypto Exchange: From Request to Completion
Crypto exchange may seem like a simple process: sеlect a direction, enter an amount, confirm the request — and soon you receive the desired currency. But behind this simplicity lies a complex systеm of actions and checks that ensure security and successful transaction completion. Let’s take a look at what happens inside the exchange process.
1️⃣ Request formation and liquidity check
It all starts when the user submits an exchange request. At this stage, the systеm not only records the entered data (currency pairs, amounts, wallet addresses for sending and receiving) but immediately starts analyzing available liquidity. The exchange checks its reserves and contacts liquidity pools of partners: centralized exchanges (CEX), decentralized platforms (DEX), and aggregators. This is necessary to make sure that the request can be fulfilled in full and at a fair rate. If liquidity is insufficient, the transaction may be declined or another rate may be offered. This stage is important so that the user does not face unexpected delays due to the lack of necessary coins.
2️⃣ Rate search and fixation
When liquidity is confirmed, the systеm selects the best rate. Modern exchanges work with multiple price sources and use aggregators to find the best offers. The systеm compares rates in real time, taking into account the exchange’s fee and network fees. The rate is fixed for a limited time (for example, 5-15 minutes) so the user has time to transfer funds. At the same time, the calculated amount is “locked” so that market price changes do not affect the transaction during this period.
3️⃣ Receiving funds and network verification
Once the user sends the funds, the exchange starts tracking the transaction on the blockchain. The transaction hash, address, and amount are verified. The systеm waits for the required number of network confirmations to exclude the possibility of transaction cancellation or double spending. For popular networks (such as Ethereum or Bitcoin), this may be from 1 to 6 confirmations, while for some altcoins — up to 20. The exchange automatically analyzes the transaction for suspicious signs (for example, if the funds came from an address linked to sanction lists) and, if necessary, suspends processing for additional verification.
4️⃣ Transaction execution and fund transfer
Once funds are received and confirmed, the exchange executes the counter transfer. The requested cryptocurrency is sent to the specified address, taking network fees into account. A control systеm operates here too: it checks the correctness of the address, matches the stated amount, and records the new transaction hash. The exchange logs all steps for reporting and auditing and to comply with AML standards and internal security policies. The user receives a notification about transaction completion and usually a link to a blockchain explorer to track the transfer.
Conclusion
A crypto exchange is not just a button labeled “exchange.” It is an entire technological platform where, in just a few minutes, numerous checks, calculations, and blockchain interactions take place. A good exchange offers not only a favorable rate but also reliability at every stage, from liquidity verification to the final fund transfer. Understanding what happens behind the scenes helps users choose platforms more consciously and make transactions with confidence.