What Is the Architecture of Web 3 Exchange Development?

The advent of Web 3.0 is among the most noteworthy changes of our generation. Web 3.0 is the next generation of the internet and will be token-based and data-decentralized. Web 3 may seem like a straightforward progression from Web 2, but in reality, the underlying infrastructure of the apps that run on it is very different from Web 2. This separates Web3 cryptocurrency exchange development from a standard Web 2.0 financial app.

What a Web 2.0 App Looks Like

To set the stage for how Web3 marketplace development differs from Web 2 architecture, I’ll first provide a brief overview of Web 2 application design. For the sake of clarity, I will divide the development of a Web 2 financial application into three distinct but related stages:

  • The first component is the database, a central repository for all the critical information about users, transactions, transaction history, etc. Users will routinely revise this information.
  • The next step is to write the server-side code that will ultimately define the financial app’s core functionality. Node.js, Java, and Python are frequently used for the backend’s coding.
  • The front-end code is the last piece and is where the user engages with the app’s business logic. JavaScript, HTML, and Cascading Style Sheets are the usual languages for this.

How Is the Web 3.0 Exchange App Architecturally Different?

Advances in Cryptocurrency Trading Platforms The use of a go-between is unnecessary on Web3. This means the application state is not stored in a centralized database, as with Web 2.0. In addition, the backend logic will not be stored in a centralized web server. It’s natural to wonder where and how a Web 3 dApp stores information about its users and their transactions.

The blockchain technology used by Web 3.0 exchanges is responsible for storing the current state of the application across a distributed network of anonymous nodes. Then, the blockchain’s consensus protocol is used to determine possible transitions. Due to blockchain’s decentralized nature, no central authority can manipulate the state of a Web 3 exchange. Every node in a Web 3 exchange contributes to the upkeep of the network.

In our experience as a company providing services for creating Web 3 exchanges, we’ve found that blockchain is the engine at the base of such an ecosystem. In reality, smart contracts define the logic of the trading processes and serve as the backend logic. After that, these smart contracts are implemented on a blockchain or distributed ledger.

Web 3.0 Exchange Architecture: A Closer Look

Now let’s delve a bit further:


A web 3 exchange development services provider can create globally accessible web 3 exchanges using a blockchain like Ethereum. Since blockchain technology allows state machines to be managed across a decentralized network of nodes, anyone can utilize the machine’s state data. All financial information is protected because it can only be written once.

Smart Contracts

A Web 3.0 application replaces traditional server-side logic with a smart contract hosted on the Ethereum blockchain. The smart contracts contain all the logic for the transitions between states. These are typically developed in high-level programming languages like Solidity or Vyper. A smart contract is an open-source software that anybody can read and use, but only the intended parties can change it.

Virtual Machine for Ethereum (EVM)

The Ethereum Virtual Machine comes next in the architecture. This architecture section is responsible for putting the rules established by the smart contracts into action. After the code runs, the EVM updates the blockchain with the results.

Compiling smart contract code into bytecode, which the EVM can understand and execute, reveals the contract’s intended logic to the EVM.


The front end specifies the reasoning behind the UI. On the other hand, this code must talk to smart contracts. Since we specialize in web 3 exchange development software, we know how tricky it can be to coordinate information sharing between the front end and the smart contract. The front-end transaction request on a web 3 exchange can originate from any node. Either running your node on the Ethereum blockchain software or using a third-party solution is required to broadcast a new transaction.

Best Blockchain for Cryptocurrency Exchange Development on Web3?

Most developers working on Web 3.0 exchanges have opted to create their dapps on the Ethereum blockchain because:

  • The cryptocurrency exchange app can be used by anyone connected to the Ethereum network.
  • No one can prevent a user from using the exchange or prevent them from using the service.
  • The ETH token is used to pay the exchange app’s fees.
  • Given that Ethereum is Turing-complete, we can implement any functionality our clients desire as a web 3.0 exchange development services provider.


Understanding the nuances between Web 2.0 app development and Web 3.0 exchange development can take a lot of time and effort for most people. I hope you found the answer to this important question in this article and are now prepared to begin developing cryptocurrency exchanges on Web3. 

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