When discussing the process of developing and launching tokens, it’s important to begin with the history of their emergence to provide context within the world of digital assets, which have become an integral part of the modern financial ecosystem. The history of tokens began much earlier than one might imagine. This article will explore the evolution of tokens, their diversity, and the future of this financial instrument.
Definition
Tokens are specialized units of digital assets that can represent various things, from shares in a company to access rights in specific applications. Tokens differ from cryptocurrencies (such as Bitcoin) in that they are typically created based on existing blockchains, most commonly Ethereum.
Stages of Token Development
The emergence of Bitcoin in 2009 marked the beginning of a new era for cryptocurrencies, but tokens as such began to develop actively later. The first example of a token can be considered the Mastercoin project (2013), which added the functionality of token creation on a blockchain. The history of this project can be explored in the Binance article.
The true boom of tokens began with the spread of the ICO (Initial Coin Offering) concept. In 2014, the Ethereum project introduced smart contract technology, which allowed anyone to create their own tokens. This led to a wave of new project launches, resulting in both significant successes and failures. The top 10 large-scale Ethereum projects are listed by CoinMarketCap.
In 2018, attention to tokens increased with the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs). DeFi’s success in creating financial instruments on the blockchain attracted many investors, while NFTs opened a new era in the collection of digital assets.
The modern stage is characterized by the growth in the number of different types of tokens. The NFT market has flourished as digital art and collectibles have become increasingly popular. Simultaneously, token standards such as ERC-20 and ERC-721 are evolving, each finding its application within the blockchain ecosystem.
Modern Examples of Tokens
Today, there are many types of tokens: utility tokens (used within a platform to access services, such as Binance Coin (BNB) and Chainlink (LINK)), security tokens (representing shares in an asset, for example, Real Estate Investment Trusts (REITs)), and non-fungible tokens (unique digital items like CryptoKitties or digital art in the form of NFTs).
As of 2024, the number of tokens on various blockchains has reached several thousand. The exact number is difficult to determine as new tokens are created daily. According to CoinMarketCap, there are over 20,000 unique tokens and coins, highlighting the diversity and dynamism of the market.
The Future of Tokens
The future of tokens appears even more promising. On the one hand, blockchain technologies continue to develop, leading to improvements in scalability and security. On the other hand, the tokenization of traditional assets (such as real estate and securities) opens new opportunities for investors, providing access to previously inaccessible markets.
Tokens have come a long way since their inception and continue to evolve, adapting to market demands and new technologies. Their diversity and potential make tokens an important element of the modern financial landscape. However, as with any rapidly developing field, caution and thorough research are necessary before making investment decisions.
How a Token Is Developed and Launched
Stage 1: Defining the Token’s Purpose
Before beginning development, it’s essential to clearly define the token’s purpose and answer the following questions:
- What is the primary function of the token (e.g., payment token, utility token, security token)?
- What problem does it solve?
- Who is the target audience?
A clear understanding of the purpose will help shape the overall strategy and improve the chances of success.
Stage 2: Choosing a Blockchain Platform
Choosing the platform on which your token will be launched is crucial. The most popular platforms are:
- Ethereum — Currently the most widespread platform for creating ERC-20 and ERC-721 (NFT) standard tokens.
- Binance Smart Chain (BSC) — Offers lower fees compared to Ethereum and also supports BEP-20 standard tokens.
- Polygon — A layer 2 solution for Ethereum that provides lower fees and higher transaction speeds.
- Solana — A fast and scalable platform offering high performance.
The choice of platform depends on the requirements for speed, transaction costs, and functionality.
Stage 3: Token Development
This process typically includes the following steps:
Creating a smart contract: The token is created using a smart contract, which contains the rules of its functionality. Depending on the chosen standard (e.g., ERC-20 or BEP-20), you need to write code that will manage the following parameters:
- Token name,
- Token symbol,
- Total supply of tokens,
- Transfer and management capabilities.
Testing the smart contract: After writing the smart contract, it is crucial to test it thoroughly. You can use test networks, such as Ropsten or Rinkeby for Ethereum, to identify and fix potential errors.
Code audit: To increase trust from users and investors, it is advisable to conduct a code audit of the smart contract. This can be done by a third-party organization that will check your code for vulnerabilities and potential threats.
After the development and testing of the smart contract are completed, it’s time for its launch.
The next step is the deployment of the contract, where the smart contract is deployed on the main blockchain network. This process requires paying gas fees, so it is important to take the current network conditions into account.
To increase the token’s accessibility, consider the possibility of listing it on cryptocurrency exchanges. It’s advisable to start with decentralized exchanges (DEX) like Uniswap or PancakeSwap, and then approach centralized exchanges.
The success of the token largely depends on its community and marketing efforts. A promotional strategy might include:
- Social media advertising campaigns,
- Partnerships with influential figures in the crypto space,
- Participation in conferences and events.
After the token launch, it’s important to ensure ongoing support. Regular updates are necessary to maintain interest in the project and attract new users.
Developing and launching a token is a complex process that requires careful preparation and analysis. The steps outlined above provide a foundation for launching a successful token and attracting the attention of users and investors.