How To Develop A Cryptocurrency Token?

If you are thinking about creating a crypto token, only having knowledge about the basic process and legislation won’t be enough. You’ll also have to be an expert of token standards, such as ERC-20 and BEP-20, in order to define how your currencies are going to be – 

• Created  

• Transferred  

• Managed 

But why am I focusing on ERP-20 and BEP-20 more compared to the other options? Because these are much more tangible, easy to use, and help you facilitate the coin creation process in a more structured manner. Also, as these two standards are based on Ethereum and Binance Smart Chain, respectively, you’ll get access to different tools and software to scale your crypto tokens better. 

But before we discuss more about ERP-20 and BEP-20, let’s introduce you to token standards first.  

What Are Token Standards? 

A token standard is a protocol or a system that looks over the crypto token creation, issuance, and management-related processes. You can also use them to establish guidelines for interchangeability, uniqueness, and transferability of your own cryptocurrency. 

And how does it help you in the process of token creation? 

Well, firstly, it can help you with decentralized application integration. For example, by using blockchain token standards, you can make your coin flexible enough to be traded in different exchanges, such as Kraken, Bitfinex, Binance, and Coinbase. If your coin can integrate with more than ten popular exchanges, the number of people trading it will increase as well. 

Also, token standards can help improve the interoperability of crypto tokens. For instance, a token created under the ERC-20 standards can be easily transferred and exchanged between different dApps in Ethereum, even if they’re following different rules or guidelines. 

If a token’s functionalities are well-organized, they will move much more securely through the blockchain network. And most traders usually trust a token that follows a trusted framework instead of something that is too ‘independent’ and has no jurisdiction whatsoever. 

Should You Choose ERC-20 For Ethereum Token Creation? 

If you are using the Ethereum platform to create crypto tokens, then yes, you have to use ERC-20. Otherwise, it’s a toss-up between this standard and BEP-20. So, let’s focus on ERC-20 first. 

• Every ERC-20 token follows the same standard functions, whether you are transferring a token or approving a transaction. This improves the interoperability of a token between different services while keeping them decentralized. 

• As a crypto token developer, you should always be looking to be a part of a large and active community, which only Ethereum can offer. So, you’ll get to use lots of libraries, open-source tools, and documentation to make the crypto token deployment much easier. 

ERC-20 tokens have also powered various decentralized finance protocols and initial coin offerings. So, if you are planning to impose either of these strategies for promoting your crypto, you’ll find different strategies related to these in the online communities. 

Is BEP-20 Really A Worse Alternative To ERC-20? 

No, absolutely not. 

While Binance doesn’t have a community as large as Ethereum, it makes up for it by offering loads of other advantages. Here’s what this may include –  

• Tokens created by BEP-20 standards usually have lower transaction fees, thanks to how low Binance’s gas expenses are. So, if you want your users to make microtransactions or create a high-frequency trading ecosystem in your blockchain, these standards will be perfect for you. 

• Binance Smart Chain is extremely flexible and allows for quicker block times, which makes transaction-related confirmations much faster and more efficient. Also, if needed, you can bridge ERP-20 and BEP-20 tokens, which makes cross-chain operations easier. 

However, before you choose BEP-20, it’s important to remember that the ERC-20 contract functions differently. Hence, whatever you choose, it’ll be used until you discontinue the creation of this set of crypto tokens.  

So, How Do You Use These Standards To Create Tokens? 

The process of creating tokens by using BEP-20 and ERC-20 is quite similar, barring some different types of tools that you may have to use depending on your choice. Here’s how it works – 

• If you are using ERC-20, it’ll be important to install npm and Node.js first, as these can help manage dependencies and run scripts. However, for BEP-20, you’ll need to use an additional development framework, like Hardhat or Truffle, along with npm and Node.js. 

• The next step is to write a smart contract, and this is applicable for both token standards. In this stage, you must specify important details like the token name, total supply, its symbol, and decimals first. And once that’s done, you must include the required functions, such as approve, transfer, transferFrom, etc.  

• After you have tested the smart contract, you can deploy it on a testnet first to check if it’s working as intended or not. If it looks right, you can write a deployment script by using a development framework, execute it, and then deploy the contracts on the blockchain network. For BEP-20, you have to verify your contracts in BscScan as well. 

Will There Be Any Challenges? 

Of course.  

The process of crypto token deployment and integrating tokenomics design principles in them will be extremely difficult, especially if you’ve never developed digital assets before. Also, managing the cryptocurrency token lifecycle can sometimes be quite expensive and difficult to maintain if there’s only one developer working on it.  

Finally, developing Ethereum network smart contracts can also be a tricky affair, as if you make even a single mistake – it’ll be exploited by hackers, who might steal everything altogether. So, before you start creating a new token, it’s important to build a good team first and govern every step of the creation and token minting process. Also, before you choose a standard, don’t forget to make a gas fee estimation first so that you can calculate the overall expenses of your project beforehand. 

The Final Say 

Developing a crypto token is a difficult job if you don’t set up a proper process beforehand for it. So, plan everything from the beginning and stick to it till the very end. Even if your token deployment process was successful, don’t forget to perform a token contract audit at least once every three months. The more careful you are, the better.