Introduction to how to create your own token
The number of crypto tokens has more than doubled within the last year, showing the importance and increased application of asset tokenization. As launching crypto tokens has gained in popularity, creating tokens requires specific knowledge in regards to writing smart contracts which compose the foundation of tokenization on blockchain. Therefore, we launched Token Tool by Bitbond to make tokenization more accessible and enable the effortless creation of smart contracts with simply a few clicks via a web3 platform.
Using Token Tool, users can mint their own token in 5 minutes: simply by defining the blockchain network, the token standard and features of the token. The technical aspects of implementing the smart contracts is covered by the platform. Nonetheless, to make valid decisions about your token’s features and to ensure the success of your token, it is essential to understand the key concepts of crypto tokens.
Short definition of Crypto Tokens
Crypto tokens are smart contracts that run on existing blockchains that supports smart contracts creation (e.g Ethereum). It is important to note that while a token is a crypto-asset, it is not a cryptocurrency such as ETH, the latter is native to its own blockchain, while the other is created on that blockchain.
What to consider before creating your own token
Step 1: Supported wallet
To be able to create tokens using Bitbond’s token tool, you need first make sure that you own one of the supported crypto wallets. Supported wallets are MetaMask, Coinbase Wallet, and WalletConnect. It is critical to use a reputable wallet, so make sure to do the proper research prior to using any wallet. You can learn more about crypto wallets in this article.
Step 2: Ensure sufficient funds in wallet
Once you have your wallet set in place, make sure you have enough funds available in your wallet to cover network and service fees. Fees are paid in the cryptocurrency of the network that you will be issuing your tokens on. For example, if you’re using Ethereum as the network of choice, then fees will be paid in ETH.
Step 3: Research network for issuance if not chosen yet
Crypto tokens remain on the blockchain that they were issued on and are therefore blockchain specific. Each blockchain has its own governing rules and supports different token standards. Depending on the token standard used, the features of the token will differ.
Most crypto tokens run on the Ethereum blockchain as the network is the market leader in terms of total transactions and popularity for DeFi applications. However, due to the high demand, the Ethereum network suffers from congestion leading to high gas fees. Other EVM compatible chains such as Polygon or BNB-Chain may thus be a cheaper alternative for minting and managing your own token.
Step 4: Select a Network and Token Standard (ERC-20, ERC-721 or EVM equivalent)
Selecting a suitable blockchain network and token standard are the first steps of defining the features of your own token. As each blockchain supports distinct token standards, the decision of your token’s standard will also depend on the network used.
The two most common token standards are the ERC-20 and ERC-721 token standard supported by the Ethereum blockchain. As ERC-20 tokens are fungible, they are commonly used to issue security tokens, stablecoins or utility tokens.
The ERC-721 token standard, on the other hand, is the dominant token standard for the creation of Non-Fungible Tokens (NFTs). If you plan to tokenize corporate stock or real estate, a token standard for fungible tokens such as the ERC-20 token is more suitable.
EVM-compatible blockchains such as Polygon, Avalanche and BNB Chain also support token standards for fungible and non-fungible tokens.In this article, we will guide you through the process of creating an ERC-20 token or its EVM equivalent.
Test networks serve to assess your token
To assess the functionality of your token, a test network can be used. Minting a token on a test network is similar to creating a token on the actual blockchain. However, you pay gas and service fees using faucet coins. Ropsten, for instance, is a test network that is fairly similar to the Ethereum blockchain and uses Ropsten ETH as a faucet payment method.
Step 1: Connect Wallet via Web3
Then connect your wallet by clicking on the “Connect Wallet” button at the top right. A pop up window will appear with the multiple supported wallet options. Select the wallet of your choice.
You will be asked to log into your wallet, once completed you will see your wallet being connected and your address will be displayed as shown below:
Step 2: Select network on which to create token
The next step is to select the network you wish to issue your tokens on. You can choose the respective network by clicking on the network’s name on Token Tool’s dashboard and in your wallet:
Please note that your wallet must be connected to the same network you choose on tokentool, otherwise a warning message pops up, reminding you that the selected network does not match the network from your wallet.
Step 3: Specify your Token’s Features
Now, you need to specify your token’s basic characteristics including:
- Token Name
- Token Symbol
- Initial supply
- initial pricing
You can then add additional features to further characterize your token. In addition to the basic characteristics of your token, Token Tool offers five optional functionalities.
These optional features consist of:
- “Can Burn”: enables token burning after initially creating your token which serves to decrease supply
- “Can Mint”: support additional token minting to increase supply.
- “Can Pause”: specifies whether your token and all associated operations can be halted and resumed whenever needed. This feature can be useful in cases of a vulnerability or a malicious attack. You should take into consideration that enabling pausing gives central authority to the token creator.
- “Can Blacklist” indicates whether individual accounts such as malicious actors can be blacklisted after initial token creation. Similar to enabling pausing, blacklisting gives central authority to the token creator.
- “Change Ownership”. : allows you to change ownership of your tokens.
Step 4: Create Token
After specifying the features of your token, make sure to review that all information filled and selected are correct. Then click on “Create Token” at the bottom of the page.
Step 5: Agree to the terms and conditions
Just after clicking “Create token”, another pop up window will appear, asking you to agree to Bitbond’s Terms and Conditions. Please read the Token Tool T6Cs carefully prior to accepting.
Right after pressing “Order with obligations to pay” you will be directed to your wallet provider to confirm and sign the transaction on the network.
Step 6: Confirm Transaction
The last step before your token is deployed to the network is to confirm the transaction in your crypto wallet and pay the respective gas and service fee.
Click “Confirm” and it will take a few seconds until your token is created:
Step 7: Congratulations your token is created
When using Token Tool, the tokens will be automatically created in your wallet after once transaction is signed and processed by the network.
A pop up window will appear with your block explorer link and contract ID as shown in the screenshot below:
You can now manage your token based on the feature enables upon creation.
Creating your own crypto token can be cumbersome when you lack the necessary expertise. Using a platform like tokne tool makes the whole process really simple and quick. It is not necessary anymore to code the smart contract of your token as Token Tool will configure your individual tokens and deploy them to the blockchain accordingly. Due to the simplicity of creating your own token, tokenization is made more accessible, driving the adoption of blockchain technology and bringing us 1 step closer to the tokenization of everything.
Make sure to try creating your own token via token tool for free on the testnet. Should you have any questions, we are gladly available for you, simply reach out via [email protected] or learn more in our resources center.