Add3, Content
August 1, 2023
13.2 min reading
If you’ve never created a cryptocurrency before, it may seem daunting. Many people still don’t know exactly how to buy crypto, let alone launch their own token. But luckily, it’s not as difficult as it may seem. In this guide, you’ll learn how to make a customized token in 5 steps.
The first thing to do is choose a blockchain layer to launch your new cryptocurrency. There are several ways to go about this:
Making a new blockchain and launching your own native cryptocurrency can be extremely difficult. You’ll likely need more than a 5-step guide to succeed. You’ll also need a blockchain developer or two. But maybe you’re determined to carve your place in the crypto ecosystem. If you want features that don’t exist elsewhere, you may be up to tackling this.
Alternatively, you could modify an existing chain if you don’t want to build a blockchain from the ground up. To do this, you’ll need the source code of an existing blockchain and, if you aren’t one, a cryptocurrency developer.
Many clone projects take existing code and modify it to launch a new project. First, however, it’s essential to audit and test your new chain, ensuring it’s compliant with existing regulations.
The easiest way to make a new crypto is to establish a coin on an existing blockchain. However, some popular chains have many tokens on them. Examples are the Ethereum blockchain, Binance Smart Chain (BSC), and TRON, all of which offer customized tokens. If you choose one of these chains, you’ll likely be minting ERC-20 tokens, BEP-20 tokens, or TRC-20 tokens.
Many factors may lead you to choose one blockchain over another for your token. The Ethereum platform is the most popular, and most crypto holders are happy to hold Ethereum’s ERC-20 tokens.
A benefit of alternate chains like BSC and TRON is that they have lower gas fees. Depending on how you plan to use your token, make sure to consider what type of chain they should exit on.
Once you’ve chosen a blockchain, you’ll need to name your token. Most crypto coins have both a name and a ticker symbol. For example, Bitcoin is the most well-known token, and its ticker is BTC.
To help your token stand out, you must make it unique and memorable. Some popular token names are:
Some token names are completely made up, like Ethereum (ETH). Others have some meaning to them. Tether, for example, alludes to the fact that USDT is a stablecoin that’s pegged (or tethered) to the price of the dollar. Of course, it’s also possible to name your token for the meme value. That’s what Dogecoin (DOGE) is famous for.
There aren’t many rules when it comes to naming digital currencies. The main requirements are that it’s recognizable and unique. Don’t forget to choose your token symbol as well. The token symbol should be a short combination of letters – usually three or four.
After you’ve named the token, define the parameters for the token. Like with choosing a blockchain, many variables can change depending on the purpose of your token. For example, you’ll need to consider:
The supply is the number of tokens that it’s possible to mint. Some tokens, like Bitcoin, have a fixed supply. A fixed supply means there is a cap on the total number of tokens that is possible to mint. In the case of Bitcoin, there’s a cap of 21 million bitcoins.
A dynamic supply allows for a flexible number of tokens. For example, Dogecoin has no cap, meaning DOGE can continuously mint new tokens. It would help if you chose a fixed or dynamic supply depending on the purpose of your token.
Fixed supply tokens allow you to retain greater value over time because of scarcity. And unlimited supply tokens are helpful for utility tokens that need wide availability.
Tokens that do not have a fixed supply are mintable. If tokens are mintable, it means users can mint new tokens whenever they need to. A burnable token will allow users to remove tokens from circulation by reducing the supply. A mintable and burnable token will enable you to manipulate the total supply – much like the way the Fed controls the dollar supply.
A token utility adds a purpose or function to a token within the ecosystem. These utilities can perform tasks on the blockchain according to the smart contract parameters. Some examples of token utility are accessing services, participating in governance, or as a means of value transfer. Creating utility is useful when you want to add to the token’s value proposition.
A token vesting and distribution schedule sets the number of tokens released over a predetermined period. Usually, a set amount of tokens remain locked up during the vesting period. Then, they only get released when certain conditions you place have occurred.
Distribution refers to allocating tokens to different parties like project contributors, investors, or the community.
The lockup period is the length of time you lock your token during vesting. Token holders can’t sell during the lockup period, and tokens are only released when certain conditions have been met. For example, you can’t sell a token with a 24-month cliff until you’ve held it for two years.
A rewards token is a secondary token that gets distributed to active users. For example, token holders of a base token could receive rewards tokens for things like staking, providing liquidity, or participating in governance. The purpose of a rewards token is to incentivize users to join with the base token. They also keep the distribution or supply of rewards separate from the base token.
It’s essential to make sure when you create a token smart contract that it’s secure. Security means getting a contract audit and doing testing. You don’t want vulnerabilities that will make your token easy to hack or exploit. During this process, you should choose a blockchain auditor or use a platform like Add3 that provides pre-audited contracts.
The token standard defines rules and functionality that tokens on that standard must follow. Different blockchains have different token standards. For example, if you’re launching a token on Ethereum, you may choose an ERC-20 standard or an ERC-721 standard.
It’s time to create your new cryptocurrency by creating a token smart contract.
Let’s say you decide to build your own blockchain architecture and create the blockchain’s code. Then, you’ll be able to custom-code the smart contract and launch native coins on it.
But when you launch on an existing blockchain, you can use blockchain-as-a-service (BaaS) providers or token management platforms. For example, Add3 is a platform where you can create a cryptocurrency without computer coding expertise or technical knowledge.
Handling the smart contracts for a new token can be daunting if you’ve never done it before. If this is your first token, creating your contracts using a service will likely be much easier. Using a platform will also help ensure your contracts are legally compliant with federal security laws.
If you’re in the USA, ensure your contracts do not violate U.S. Securities and Exchange Commission regulations. Unfortunately, multiple crypto founders have discovered that breaching securities regulations is a deadly mistake.
After creating a smart contract, ensuring legal compliance, and designating wallet addresses, you can start to mint new cryptocurrency. This is where actual tokens are minted on the blockchain, and users can begin to hold and exchange them.
You can do this through an initial coin offering (ICO) or simply launching the token. And ICO is a way of raising money by issuing digital currencies in exchange for other crypto assets or fiat currency. Many crypto project founders first generate interest and support for their projects. Then, using an ICO, sell newly minted tokens to investors to generate startup capital.
ICOs not only bring in token holders, but they also pull in funds for the project.
After you launch, don’t neglect cryptocurrency maintenance and management. This includes managing cryptocurrency transactions and monitoring whether the blockchain operating protocol remains secure. You should also continuously comply with cryptocurrency legal regulation updates.
As the token owner, it’s critical that you stay engaged with the administration, operation, and control of the cryptocurrency. From issuance to overseeing distribution and allocation, the job isn’t done when you deploy contracts and mint coins. You can add utility to keep your users engaged or implement staking and other DeFi features. Over time, work to integrate your token into the Web3 ecosystem.
When you use a token management platform like Add3, you can view token analytics and user statistics. You can also white-label and manage a user dashboard with your token’s brand. Nothing kills a cryptocurrency faster than its founder disappearing into thin air. So, ensure you don’t neglect token management once you launch your brand-new, shiny crypto.
There are thousands of cryptocurrencies in existence today. Some are valuable, like Bitcoin; others are what the industry calls “shitcoins” or “meme-coins.” Depending on your goal, your token can be any of these. First, however, ensure you’re not violating laws, rug-pulling, or scamming investors out of money.
A memecoin or a shitcoin can be a great project to practice and understand creating cryptocurrencies. For example, Dogecoin was created as a satirical joke by its founders. Over time, Elon Musk became an avid DOGE supporter.
If you’re ready to launch a cryptocurrency, don’t feel intimidated. Take some time to understand how it works but don’t be afraid to dive in and try things for yourself. Today, with platforms like Add3, it’s easier than ever to launch a digital currency. You can launch a token in five minutes. Try it for yourself by signing up or contact us for a demo. Your new cryptocurrency is just a few clicks away.
