How to Make Your Own Cryptocurrency Token: Become the Bank

Konstantin Kalinin

Head of Content

March 10, 2024

If you are wondering how to create a crypto token — whether to boost your DeFi app, raise money for app development, or chase other goals — look no further. I’ll explain how you can create your own crypto token, even if you don’t know much about blockchain technology.

Yes, those headline-making crypto coins like Dogecoin ($0.25) and tokens like Aave ($299) started with an idea, “Why don’t I make a crypto token? It’s gonna be fun!”

While some crypto investors would probably argue about the fun part, we still live in a brave new world of cryptocurrencies and decentralized finance. So why miss the opportunity?

Top Takeaways:

• You can create either a crypto coin or a token. There can be only one coin per blockchain, and you make it when building a new blockchain. Tokens are plenty, and they are easier to develop.
• Any crypto token is essentially a smart contract living on a blockchain. So you need to implement a smart contract according to certain token standards, which depend on a blockchain if you want to make a token.
• The most common use case for creating a crypto token is to incentivize users to participate in your DeFi or another decentralized app more actively.

Table of Contents:

1. Coin vs. Token Primer
2. Key Features of a Token
3. Common Misconceptions about Crypto Tokens
4. Use Cases for Creating a Crypto Token
5. Ready-made Solutions to Create Your Own Token
6. How to Create a Crypto Token in 4 Steps
7. How Much Does It Cost to Make Your Own Cryptocurrency Token
8. How Topflight Apps Can Help in Creating a Crypto Token

Coin vs. Token Primer

Let’s get you up to speed on what crypto tokens really are. In the intro, I’ve mentioned Dogecoin and Aave. The former is a coin, and the latter is a token. What’s the difference, and why does it matter?

A crypto coin is, so to speak, the main currency on a blockchain. For example, Ether (ETH) is the underlying currency on the most popular blockchain called Ethereum. Every blockchain needs a crypto coin acting as money to fund transactions and any other interactions with a blockchain.

In addition to having coins, some advanced blockchains, such as Ethereum or Binance Chain, also support cryptotokens. These tokens can be issued by anybody according to a blockchain’s standards. When you lend, exchange, send or perform any other actions with a cryptotoken, you pay for it using the blockchain coin.

To this extent, the main differences between crypto coins and tokens come down to this:

As you can see, coins and cryptotokens differ significantly, and there’s a higher chance you’ll be interested in developing a cryptocurrency token.

Key Features of a Token

So, we’ve established that anyone can create their own crypto token, virtually on any blockchain, except for the bitcoin blockchain that only supports its works using Bitcoin — the crypto king of all digital coins. Alas, you can’t create a bitcoin token, but stick around for a workaround. I’ll share it later.

As a result, we now have somewhere between 6,000 and 7,000 cryptotokens. One popular crypto tracking resource counts a little over 7,000 tokens.

Tokens exist to transfer value around specific blockchain projects that gave them birth. For example, BAT (or basic attention token) is a crypto token that anyone can earn by browsing the web through the Brave browser and then spend it by tipping creators or exchange it for fiat money or other cryptotokens.

What features, or rather properties, do these tokens have that you need to be aware of?

Blockchain-specific

First of all, you can create a new crypto token for different blockchains. At first sight, there seem to be quite a few chains to choose from. At the beginning of 2021, there were around 30 blockchains on the market.

Each one has specific rules and standards for developing crypto tokens. Furthermore, cryptotokens may have different features depending on where they put their roots. How do you pick a blockchain that will be home to your token?

Fortunately, to a business owner like you, the question of which blockchain to choose is not so intimidating. You go to where you get mass adoption, right? In this sense, the whole blockchain ecosystem, particularly crypto tokens, is still nascent.

Visit a chain explorer site like Blockchair. You’ll quickly discover that Ethereum currently trumps all other blockchains, both in terms of total and per-second transactions. On top of that, the Ethereum chain has approximately the same amount of active wallets as Bitcoin.

That’s the reason why most crypto tokens (aka ERC-20 tokens) live on Ethereum. That’s where many successful coins started too. For example, the Binance Coin (BNB) was first developed as a crypto token on Ethereum and then migrated to its own chain, where it became a crypto coin — the queen of the Binance chain.

The chances are, you’ll want to build your own token on Ethereum, too, simply because the chain has already onboarded a lot of users.

Related: How to develop a cryptocurrency wallet

Different species

The second thing you need to know about tokens is that they, too, can be different. Generally speaking, there are three big cohorts of crypto tokens:

• payment
• security
• utility

Payment tokens are the simplest form of cryptotokens. As the name suggests, they exist solely to allow users to transact without offering extra functions.

You’d think that security tokens are used for enhancing the security of a blockchain app (at least that’s what I thought when I first discovered them). However, these cryptotokens fall more into the group of financial instruments. Any token that’s considered an investment tool can be regarded as a security token. Users can often stake them, which means they freeze a certain amount of their holdings to accrue interest.

Utility tokens are probably the most intriguing type of crypto tokens. They usually serve the specific purpose of a decentralized app (aka dApp), e.g., providing customers with access to dApp features.

For instance, Helium — the decentralized IoT network — requires users to purchase its HNT coin in addition to buying and setting up a wireless hardware station to start mining Helium blocks.

Tokens may also differentiate themselves by the development standards, which guide their inherent features. Take Ethereum — they have ERC-20 as the golden standard of a cryptotoken, which defines a token’s parameters and how it operates. Apart from ERC-20, there are other formats available for development.

One popular crypto token type these days is non-fungible tokens or NFT. Non-fungible stands for one-of-a-kind, meaning you can’t exchange an NFT for the same thing because each non-fungible token is unique.

At the elementary level, NFTs are digital art tokens with verified and public proof of ownership. That can be an animated image with cats belonging solely to you, a collectible item, an access key, a lottery ticket, etc. If you were to develop an NFT, you’d have to comply with the ERC-721 standard.

Volatile

Another aspect of any cryptotoken is its price volatility: it can go up and down by 50% or more percent in a matter of days. One exception is stable coins like USDC or USDT; however, you need to back stable coins with the corresponding amount of fiat money to keep the price at the same level.

What volatility means to you as a business owner is that your business model relying on the price of a token will largely depend on the market. If people can freely buy and exchange your cryptotoken for other assets, they will, which has little to do with the overall support for your product.

So it may be worthwhile to think hard about tying your cryptotoken features as close to the functioning of your digital product as possible.

Anonymous

Finally, crypto tokens provide anonymity to transactions. At the same time, any transaction is available for anyone on blockchain explorer sites like EtherScan. So if someone knows your wallet address, they can see all your transactions.

Related: How to make an e-wallet application

Common Misconceptions about Crypto Tokens

Let’s also quickly review a couple of myths about crypto tokens that you should take into consideration if you want to create a blockchain token (also applies for general fintech app development).

Super secure

Crypto tokens live on blockchain networks and, therefore, should be super safe, right? Wrong. The two most common attack vectors are:

• off-chain software that allows users to interact with a token (prone to hack attacks)
• newbie crypto wallet owners (extremely prone to scams)

Blockchains also can be hacked. That’s why when developing a crypto token, you should double down on securing the infrastructure (servers and software) that it runs on and interacts with.

It’s true that once a cryptotoken is on a blockchain, no one can change it because it’s encrypted, but the frontends and backends that it interacts with still need to be protected.

Also, if you decide to implement quasi-decentralized architecture with admin keys that allow the owner to change parameters and even replace a smart contract, that add yet another attack vector. This defi app will be only as secure as your keys. One way to improve the security is to use multi-signature (like in Gnosis Safe) technology so that several team members need to confirm critical transactions.

Anonymous

I’ve already mentioned that anyone who knows your public crypto wallet address can quickly look up all your transactions. Just bear that in mind and educate your users.

No transaction fees

Ok, so Ethereum is the most popular blockchain right now, and people pay gargantuan fees, e.g., between $100 and $500, to do basic transactions. That’s because Ethereum has issues with scaling (they are working on it with Ethereum 2.0). Still, the fact remains: a cryptotoken does not guarantee zero or minimum transaction fees.

That all depends on the blockchain you choose to work with: its validators and the number of queued transactions. You could also spin up your own blockchain to allow your customers to transact for free.

Immediate transactions

Again, transactions on Ethereum may take a couple of hours. That’s not days like in the case of international bank transfers, but that’s not immediate either. Sometimes, a transaction may not come through, and you still need to pay the fee.

Those are the main things I wanted to highlight. Fortunately, you can make some of these issues work for your project (transparency is not necessarily a bad thing) and improve other aspects of your crypto token to make it more viable.

Use Cases for Creating a Crypto Token

Why would you want to make a cryptocurrency token?

Raise capital

Companies raise a lot of money using initial coin offerings (ICO) or simply speaking by selling promise coins. The count is in the billions of dollars — all raised to enable businesses to develop their products.

Today, the crypto industry prefers to speak about airdrops, which essentially is the same thing where companies promise to distribute a certain amount of coins or cryptotokens in exchange for donations.

Drive adoption of your dApp

That’s the most common actual use case for creating a crypto token, which takes a lot of tech acumen. Let’s say you have a dApp, for example, a decentralized exchange (DEX), which perfectly qualifies as a DeFi product. And you want to create a token to promote this product and engage more users.

UniSwap, the largest DEX at the moment working on the Ethereum blockchain, did this very thing. They released a UNI cryptotoken for trading it on both centralized (CoinBase) and decentralized exchanges. However, UNI has no relation to how UniSwap functions. Therefore, it’s a purely speculative asset (frankly, much like any crypto). The sad truth is that people come in crypto for mad economic gains; some of them, who are a bit smarter, look for ways to invest (or stake) long-term.

Also read our guide on how to create a crypto exchange.

Therefore, it’s tough to tie a token function to a DeFi or any other type of dApp. And not only tie but also make it essential to the whole dApp functioning. The truth be told, if you look at any cryptotoken at all, you’ll see that it’s a highly speculative digital asset with some “utility” slapped onto it. The real utility tokens are like gems, e.g., BAT, which pays users for their attention.

If you can crack this problem, consider yourself a successful founder because everything else is just a matter of putting together a technological puzzle.

Support a cause

Here’s a Bx token that connects corporates and farmers in an effort to optimize carbon emissions. The company behind Bx offers software that helps farmers grow optimally and keep more carbon in soils, while enterprises invest in climate-smart practices to obtain digitized carbon efficiency data on a blockchain.

Does it make any sense to you? Anyhow, that’s a cause, and the company is using a digital token to get more support.

Build a blockchain

Finally, when you build a blockchain, you can’t get away without developing a coin. As we’ve already discussed, the coin will be used as the main currency used to perform any transactions on the chain.

Developing a blockchain (or copying and modifying an existing blockchain) is outside the scope of this blog (more on how you create a blockchain application). So let’s continue focusing on how you can develop a cryptocurrency token.

Ready-made Solutions to Create Your Own Token Coin

The easiest route to create your own cryptocurrency token is by using dedicated DIY platforms. If we have SaaS platforms to create web and mobile apps from scratch, using a drag-and-drop UI, why can’t there be tools for creating tokens?

And you are right! Such tools do exist.

If all you need is a cryptotoken to raise funds, you can choose between multiple options:

• CoinTool
• BakeMyToken
• Token Factory

My guess is you’ll be working on an ERC-20 token — the one that can take advantage of the developed Ethereum blockchain ecosystem. In fact, most ICOs run there:

After choosing a platform, you still need to decide on the fundamental properties of your cryptotoken, like whether you want to be able to:

• burn
• mint
• create roles to manage the cryptotoken
• assign ownership, etc.

You do all of that without writing a single line of code, only selecting different options and providing minimum input where required. An ideal scenario for quickly creating a token for ICO.

How to Create a Crypto Token in 4 Steps

Now, if you want to create a cryptocurrency token with some advanced functionality closely tied to a dApp ecosystem, you will need a professional team of blockchain developers.

Step 1: Define your token properties

First of all, you need to decide what your cryptotoken will do. If it’s a typical ERC-20 token meant to attract investors, it will have the inherent properties of the ERC-20 standard. You’ll be able to specify:

• total token supply
• token’s name, symbol, and number of decimals
• and a couple of auxiliary functions to check balances on addresses, enable and verify transactions

If it’s an NFT, it will have slightly different parameters, e.g., to specify owners of non-fungible cryptotokens.

As I’ve mentioned, there are plenty of tools to create these rather simplistic tokens. However, if you need to make your own crypto token that is more advanced, seek professional assistance from a development team.

Step 2: Develop a smart contract

Why smart contracts all of a sudden? Long story short, any cryptotoken is governed by a smart contract, which is a piece of software running on a blockchain. So to make your own token, you need to code a smart contract.

By the way, Ethereum was the first blockchain to introduce smart contracts. That’s probably the main reason why the majority of all cryptotokens are developed and deployed on Ethereum.

Make no mistake, even when you use token-generating sites to build a token for ICO — they still write and deploy contracts to blockchain in the background for you.

Ok, so what do we know about smart contracts? They run on a blockchain and power DeFi and other decentralized apps, allowing users to interact via transactions.

Related: Smart Contract App Development: The Complete Guide 

These smart contracts can be very smart, much more advanced than ICO contracts. Therefore, you get to make a token with more advanced functionality. Some of the things you might consider when assigning a team of cryptocurrency developers on a project include:

• Do I want a 100% immutable contract, or would I like to keep an option to change it quickly later on?

This is pretty serious stuff. Crypto enthusiasts love fully decentralized dApps (and coins) that don’t have admin keys providing backdoor access to the contract. After all, the central premise of blockchain technology is decentralization. However, suppose you are thinking about developing a token for a closed community, such as serving a group of clinics. In that case, such a solution is well justified.

• Do I want my cryptotoken to provide some additional features like staking?

Some crypto tokens have peculiar logic when users stake them. For example, the contract can burn all staked tokens, effectively removing them from the existing liquidity pool, and mint new coins plus the interest after the stake has finished.

There are many other advanced features to consider, like creating a payable token that can simplify paying for services and managing subscriptions.

• Will my cryptotoken need to have an ownership attribute?

That’s more about NFTs, where an ownership property allows one to determine the unique owner of a digital asset.

• Do I need any token recovery functionality?

Blockchains are a wild west today. People can discover the address of your smart contract and send their crypto (which the contract doesn’t necessarily support) to it by mistake. These funds are usually gone forever. However, you might want to design a workaround in your smart contract to avoid such accidents.

There are many other questions to answer while working on a crypto token smart contract. The main thing is to think through its logic — how do you want it to behave, what will it do to attract more customers into your dApp ecosystem? People will probably ignore another rando speculative asset that doesn’t stimulate them to use your software.

Step 3: Run QA on a test chain

When creating a vanilla smart contract for a crypto token, keep in mind that it will be quite a hassle to replace it in case there’s a bug. Therefore run multiple tests on a test blockchain like Rinkeby or Ropsten.

Your developers may also make use of such tools as SafeMath — a Solidity library protecting your contract’s code from calculation mistakes. It’s one way to avoid “mapping address uint256” errors for sure.

Related: Mobile App QA Guide: Tools, Process, Best Practices

Step 4: Deploy to blockchain

Deploying a smart contract is pretty simple. Depending on a tool your developers are working with, they’ll just need to send a transaction with compiled contract code without specifying a receiver. It’s just a matter of a few clicks, really, and something not to worry about.

In any case, ensure that the contract functions perform flawlessly on a test net (user can send and receive cryptotokens, the contract executes the rest of its features, etc.) before deploying it to the mainnet (Ethereum).

(Secret) Step 5: Create token tracking software

Dashboards… Everybody loves them. I know I do: checking how my crypto portfolio fares in the bear and bull market, charting red and green lines, is quite an experience (I hope you didn’t invest what you couldn’t lose).

I bet you wonder, “Why develop a crypto portfolio software for a single token?” And if it’s a single token with a very simple functionality (no staking, etc.), I’m totally with you. There’s no reason to build yet another application for tracking your token or coin performance.

However, if the token provides more functionality, e.g. staking or voting (DAO), it becomes necessary to track too many metrics to predict its price fluctuations. For example:

• accrued interest
• number of stakes / unique staking addresses
• transactions of whales invested in your token
• number of daily transactions

I will give you an example. I’m invested in HEX, and I can stake it to earn 100% decentralized interest. There are quite a few web and mobile applications that track a lot of metrics besides the interest. Besides calculations of possible penalties for early end-staking, total value locked, average stake duration, and APY, the HEX community also tracks other altcoins built on top of the HEX ecosystem: ICSA, HDRN, MAX, etc.

As you must be aware, usually crypto developers create such portfolio tracking software driven by their own enthusiasm. However, that’s a niche that you can own, too.

How Much Does It Cost to Make Your Own Cryptocurrency Token

One thing to remember with developing a crypto token is that you are not just making a lone icon and a symbol, which is pretty simple. You’re making a decentralized application based on financial design mechanics, and the cryptotoken serves as a gas you fill your car with to get to a specific place. Just like that, the token will help your customers securely navigate your DeFi app.

The cost of developing a medium-level dApp powered by a cryptotoken is around $160,000, while an MVP is attainable starting at $40,000. As you can see, the cost varies greatly depending on the required features.

Read our Guide on Building dApps

Also read: Custom Mobile App Development: The Complete Guide

How Topflight Apps Can Help in Creating a Crypto Token

The team is releasing a crypto app for long-term investors shortly and continues working on two more crypto-investment applications. We’ll be happy to discuss your dApp idea and advise on cryptotoken development. Schedule a call here.

Related:

1. How to Make a DeFi Lending Platform
2. How to Build a DeFi App
3. How to Build a Market ready Fintech App
4. How to Make a Blockchain payment system
5. How to Develop a DeFi Staking Platform
6. How to build a DeFi Exchange Platform
7. How to Create a Cryptocurrency trading bot
8. How to Start a DAO

[This blog was originally published in October 2021, but was updated for more recent data]