- Tokenization is increasingly becoming popular and it refers to assigning a token to anything of value in the real world
- Tokenization has become the norm for groups and teams looking to raise funds or build more active communities
- Here is how you can create a cryptocurrency token easily without coding or learning how to code
Creating a cryptocurrency token has become a norm amongst traders nowadays. While coins have their own blockchain, multiple tokens can be made on an existing chain, saving time and money for the developer.
Coins and tokens share some fundamental similarities. This is in terms of representing value and facilitating payment processing. However, coins can be exchanged for tokens, and the opposite is also true. Where differences emerge is in their usefulness. People usually use most cryptocurrency coins as a store of value on the blockchain. Meanwhile, they typically use tokens on a decentralized application (DApp).
Existing blockchains allow the creation of tokens, which can result in multiple project tokens coexisting within the same ecosystem. As requirements change, most of these tokens can be migrated.
Differences stretch even further into development, where users who want to create a coin must copy a complete blockchain. Those interested in token creation, on the other hand, will begin by developing a smart contract. The developer saves time and resources. This is because they don’t have to invest time deploying their own blockchain and ensuring its security.
The role of cryptocurrency tokens
Cryptocurrency tokens can have the same worth as a coin. They can also provide additional usefulness through fundraising, voting (or governance), points for a loyalty program, or as part of a charity program.
Some cryptocurrency tokens exist as an investment vehicles, such as Dogecoin (DOGE). However, others enable users to trade tokens on platforms such as Ethereum (ETH). Your team can use other tokens to raise funds for a new product or service. Additionally, you can release a token through an Initial Coin Offering (ICO) using cryptocurrency tokens, in addition to an initial public sale.
Other use cases include representation as business shares, a definition for proof of ownership, a ticket for entry or use of a DApp, a voting tool, a component of a loyalty program, or being implemented as part of a charity fundraising campaign.
Why one needs to create a cryptocurrency token
Tokenization has become the norm for groups and teams looking to raise funds or build more active communities.
Tokenization refers to assigning a token to anything of value in the real world. Tokens are likely to become a worldwide standard for conducting transactions. This is because many businesses, teams, and individuals are seeking to digitize their offerings for simplified transactions. Tokens, in addition to staying ahead of the curve, provide several benefits to users, including the ability to incentivize users to participate more actively in a particular decentralized finance (DeFi) project. Whether it’s a company or a cause, token holders can easily invest in a mission that fits with their own goals and earn rewards in exchange for their participation.
Is Ethereum the best platform for token creation?
Ethereum is still at the forefront of DeFi, providing users with access to a growing community with a wide range of utilities.
To date, Ethereum and Solana (SOL) remain the most popular blockchains, based on the needs of the user. However, the Ethereum ERC-20 standard has remained the dominant pathway for creating new tokens since its inception. This has made it the primary option for crowdfunding and ICO use cases. The standard itself provides a simple interface that a variety of applications can use.
Ethereum remains at the forefront of DeFi as a leader in DApp development and an ecosystem of many well-known platforms. This has made it an obvious option with extensive documentation for those creating their first token.
How one can create a cryptocurrency token
A user can create a token by deploying a smart contract. Modern platforms facilitate this process by allowing users to fill in the details of their proposed token without requiring coding or technical expertise.
Traditionally, when making a token, the creator would outline token properties. The properties include supply, name, and amount of auxiliary functions. This is followed by the implementation of a smart contract, QA testing, and blockchain deployment. While users used to need a basic grasp of coding, newer platforms have simplified the process so that anyone can deploy their own token.