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Utility tokens have already proven their essential role in the growing blockchain ecosystem. From facilitating payments to utilizing them for staking, the purposes of utility tokens are incredible. According to a Crypto news report, many utility tokens including BNB (Binance Coin), XRP (Ripple), and ETH (Ethereum) may soon offer higher ROI. This new wave and rising utility token prices make utility token development the finest investment.
Meanwhile, there are real-time success stories revealing the significance of developing a utility token. For instance, Binance’s utility token BNB gains users’ attention through transaction fee benefits and staking rewards. This helps Binance strengthen its community and service offerings to be more user-centric. Similarly, as a business owner or a startup, you can afford loyal benefits when developing a utility token.
So are you unsure how to develop a utility token? Leave your worries! Pixel Web Solutions presents this blog as a complete guide on utility token development to help early investors like you. Deep dive into this blog to gain extensive knowledge to create utility tokens for your business. First, let us establish a solid clarity on…
What is Utility Token Development?
Utility token development refers to the process of creating a crypto token with a specific purpose or enabling access to services in a blockchain platform. Utility tokens are meant for several purposes including payments, rewards, and native platform services like staking, yield farming, etc. Depending on the intent they serve, the token functionalities and features will vary. This is where the best utility token development services become significant.
The utility token creation process involves various stages that we will discuss later in this blog. Yet, smart contract development has a major play in developing a utility token for different use cases. Because they enable utility tokens to seamlessly interact with decentralized applications (dApps) and platforms. The respective token standard denotes how a utility token operates in a particular blockchain.
Here are the most popular utility token standards of prominent blockchains,
- ERC20 – Utility token standard of Ethereum.
- TRC20 – Utility token standard of Tron.
- BEP20 – Utility token standard of BNB chain.
So creating a utility token on the appropriate blockchain with excellent features must be a smart investment.
Also Read – How to create an TRC20 token
However, before fast-forwarding toward the development process, let us understand…
Benefits of Developing a Utility Token
Utility token development offers numerous benefits to investors. For gaining better clarity, here we explore the use cases of utility tokens.
Enabling Access: As stated earlier, utility tokens are intended to provide access to specific services or platform functionalities. Decentralized applications and platforms enable user access to certain products or premium services through utility tokens.
Rewarding Users: The platform owner can reward their contributing users using utility tokens. For instance, many staking platforms reward their users with utility tokens.
Offering Governance Rights: Utility tokens can offer governance rights to token holders. For instance, Uniswap’s native token UNI gives users voting rights for contributing to the platform’s growth and upgrades.
Payment Services: Most of the DeFi platforms and applications have utility tokens for facilitating platform-centric transactions. For example, BNB token holders can pay transaction fees in the Binance exchange at a discounted price.
Conducting Token Sales/Crowdfunding: Utility token development helps you raise capital investment through crypto crowdfunding (token sale). Initial Coin Offering (ICO) is the first crypto fundraising method for raising capital through token sales.
Staking/Liquidity Provision: The utility token holders can stake their tokens in staking modules to earn rewards. DeFi-based platforms accept utility tokens for yield farming and offer rewards to a great extent.
So these reasons justify why you should develop a utility token. The first four denote the business benefits and the last three denote the benefits for individual token holders. Overall, creating a utility token can offer a higher return on your investment.
So let us now dive deeper into the…
How to Develop a Utility Token in 8 Simple Steps?
Here are the 8 essential steps to develop a utility token for a specific purpose with astonishing token features.
- Define Token Purpose
- Choose Right Blockchain
- Decide Tokenomics
- Smart Contract Development
- Conduct Thorough Auditing
- Deploy Utility Token
- Token Integration Process
- Marketing and Upgrades
For deeper insights, let us now explore each step.
1. Define Token Purpose
Before developing a utility token, you should be clear on the token purpose. Like what is the intent of the token, the use cases the token will serve, and how it interacts with the other applications or platforms. Studying the market conditions helps you comprehend how your token can efficiently meet user demands. Defining the token purpose allows you to identify relevant token features and tech stack requirements.
2. Choose Right Blockchain
Blockchain is the powering source of any crypto tokens where utility tokens are not different. Analyze blockchain properties like scalability, security, interoperability, and transaction cost that are connected with token performance. Each blockchain has unique advantages and is perfect for specific use cases. Here are the popular blockchains ideal for utility token development and their key specialties.
- Ethereum – Best for innovation, ideal for DeFi and NFT token development.
- Binance Smart Chain (BNB) – Best in lower transaction cost, ideal for DeFi-based utility tokens.
- Solana – Best for high-speed transactions and scalability, ideal for developing a utility token for highly scalable dApps.
- Polygon – Best for higher scalability and lower transaction cost, ideal for utility token development for EVM-compatible dApps.
- Avalanche – Best for high throughput and lower transaction cost, ideal for utility tokens that require higher TPS.
You can select the best blockchain platform based on your requirements.
3. Decide Tokenomics
Tokenomics denotes the particulars such as the token supply, demand, and distribution model. Defining utility token tokenomics enables token owners to balance the market demand and supply properly. Further, this aids the token in sustaining the market competition by bearing consistent demand. The utility token development with improved tokenomics may attract potential investment. So deciding the right tokenomics is the key to obtaining better value for your utility token.
4. Smart Contract Development
Smart contract development is the process of defining the utility token functionality using programming languages designed to write smart contract coding. A smart contract is a framework for managing a utility token’s role, tokenomics, and utility obligations. A minor bug in smart contract coding may induce huge losses owing to security vulnerabilities. So while coding a smart contract, certain factors must be taken into account. They are,
- Smart contract security
- Gas fee optimization
- Upgrades in smart contract
- Compatibility and interoperability
- Supporting relevant token standards.
Generally, utility token developers choose relevant smart contract programming based on the selected blockchain. For instance, Solidity and Vyper are best for EVM-compatible blockchains. Rust is best for utility token development on blockchains like Solana and Palkadot.
5. Conduct Thorough Auditing
For efficient utility token functionality, conducting complete auditing of the token and its smart contract is paramount. The auditing process includes functionality checks, security auditing, performance validation, and UI/UX testing. The multiple stages of testing ensure the token and smart contract are free from performance lags and security issues. Implementing a comprehensive auditing process can eradicate minor errors immediately. This leads to a positive user experience and seamless token transactions.
6. Deploy Utility Token
Deployment means making the token live on the main net for general usage. That means the utility token development experts will deploy the tokens on a specific blockchain’s main net. The post-deployment process verifies the token functionality on a real-time basis. Now the utility token is ready to serve the defined purpose.
7. Token Integration Process
Token integration is nothing but the process of connecting the token to the relevant platform or application services. For instance, the staking platform uses utility tokens to reward users and enable services. Similarly, the token integration process will ensure that the utility token performs as intended. During this process, the expert team will set up a wallet, cross-chain features, and tokenization procedure.
8. Marketing and Upgrades
A new utility token requires marketing and promotional activities to gain value and recognition after utility token development. In particular, utility tokens for crowdfunding purposes need extensive marketing campaigns to gain investor attention. You can conduct token sale events and token airdrops to create awareness about your utility tokens. However, consider your budget and cost to create a crypto token before engaging in marketing activities.
Furthermore, providing upgrades to improve token performance and usage is essential to keeping your token innovative. Indeed, make sure the upgrades meet the industry and user expectations perfectly.
These 8 simple steps can help you create utility tokens for your personal and business needs. Yet, developing a utility token with relevant attributes based on its purpose is quite a tricky process. So here we explore the…
Essential Features of a Utility Token
The following are the essential qualities a utility token should have.
- Clear Tokenomics – This defines the supply, demand, and distribution model. Clear tokenomics ensures value appreciation for utility tokens to stand against inflation and low token adoption.
- Technical Capabilities: This ensures the utility token is fungible, interoperable, scalable, and robust for cross-chain compatibility. Utility token development should implement these technological capabilities for flexible token performance tailored to your business requirements.
- Automated Smart Contract: Smart contract efficiently manages token functionalities like transferring, staking, and rewarding. The automated process saves time and confirms the fair token operation.
- Incentive, Governance, and Community Build-up: These qualities are vital for increasing user engagement with the utility token. Incentives reward loyal users, governance empowers token holders, and the community can promote utility token credibility and fair use.
- Compliance with Local and Regulatory Norms: This is the essential part of utility token development to validate utility token compliance with local and regulatory guidelines. This may help in getting an operational license for your business and safeguard you from regulatory penalties.
- Burnable, Mintable, and Upgradable: Burnable and Mintable features enable you to regulate the utility token’s market supply. The token could be upgradeable to include new features or fix the ongoing maintenance.
- Transparent Auditing: Transparency in auditing and token transactions builds trust among users and investors. Particularly, smart contract auditing eliminates security risks.
Considering these essential qualities, utility token development will be fair for specific business use cases. However, be aware of aligning the technical components wisely for defined and secure operations. A small error in blockchain selection, smart contract programming, and security failure may drastically impact your business services.
In addition to that, meeting legal and regulatory norms, upgrading token features, and fixing performance issues necessitate specialized guidance to develop a utility token. A well-experienced team of blockchain experts can overcome these challenges and help you create smoother and more secure utility tokens
Why Choose Pixel Web Solutions for Developing a Utility Token?
Pixel Web Solutions is a leading Crypto Token Development Company with a team of blockchain experts specialized in utility token development. We follow a streamlined development process for creating a feature-rich utility token as per client requirements. From ideation to deploying the token, our experts understand your requirements and execute the plan accordingly. With blockchain expertise and 12+ years of industry experience, we can overcome legal and technical barriers. Upgrading your token features further will be your business obligation. Certainly, you may opt for our comprehensive development services for hustle-free business progress. Let us join hands to build a utility token with industry-first technological advancements.
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