In the crypto space, decentralized platforms are reaching huge popularity due to the negligence of third parties. To be precise, Decentralized finance is transforming the global monetary landscape by facilitating quick and efficient transactions. DeFi’s prominence in the crypto markets has built a lot of interest among entrepreneurs as tokens use smart contracts to transform traditional financial applications.
To access DeFi-based platforms, you will require DeFi tokens to process any activity. It paves the way for DeFi token development in the crypto marketplace. If you are unclear about these tokens and their characteristics, this blog will help you. Here, we shall discuss the DeFi tokens, their creation process, advantages, features, etc. Before that, you should know what a DeFi token is.
What is Meant by DeFi Tokens?
Decentralized Finance (DeFi) tokens represent digital assets like cryptocurrencies, stablecoins, and more. Generally, the crypto tokens made to access all decentralized platforms are called DeFi tokens. As a part of a decentralized network, they are known for their transparency, accessibility, and investment options.
DeFi tokens unite users with decentralized financial services such as borrowing, lending, and trading. But how it became popular at a particular time might be a question in your mind. The growing need for these tokens for all DeFi platforms and applications makes it possible. So, creating a DeFi token will help you generate passive income in business.
It is how DeFi tokens offer opportunities for entrepreneurs struggling for a business initiation. Besides, an investor can also generate great bucks by trading these tokens. After this, we shall have a view of the development process of a DeFi token.
How to Create DeFi Tokens?
Creating a DeFi token will include several steps, and we shall discuss that below.
- Decide the Purpose: Analyze and fix the target of developing your own DeFi token and gather the pre-requirements for the creation process.
- Fix the token parameters: You should prepare the name of your token, token symbol, logo of your DeFi token, total supply, decimal value, etc.
- Choose a blockchain: Various eminent blockchains are available to create the DeFi tokens like Ethereum, Tron, and BNB chain. A startup can choose the fungible token standards of these blockchains for DeFi token development.
- Create a smart contract: Here starts the development process. You can create and deploy a token by integrating all token parameters into a new smart contract to automate the process.
- DeFi token development: By running a smart contract, you can create your ideal and new DeFi token. Provide the token details correctly into the smart contract or else errors will arise in the development process.
- Beta testing: Once after developing, test the code multiple times to filter the bugs and errors present in the token. After removing the hassles, you can deploy the tokens successfully.
Following these steps, you can create a unique DeFi token for your business requirement.
Importance and Benefits of DeFi Tokens
Most startups are curious to know the advantages reaped by creating DeFi tokens. The outstanding benefits are listed below.
- These tokens involve lower issuance and management costs.
- DeFi tokens offer access to multiple finance platforms in the crypto space.
- An investor can use these tokens as collaterals in DeFi Lending Platforms.
- DeFi tokens can issue and securely trade on a blockchain.
- A startup can create DeFi tokens without intermediaries or escrow services.
- DeFi Tokens are more transparent in the crypto marketplaces.
- The cost to create DeFi tokens is low, and it helps manage and trade crypto assets in the exchanges.
- DeFi token development reduces fraud or disintegration in the supply chain of services, goods, and financial transactions.
- As you can create and store these tokens in the blockchain, it ensures greater security for the token holders.
- The creation of new crypto tokens will increase the liquidity of the DeFi ecosystem.
Considering these benefits, many startups have already created these tokens and earned more popularity in them. I shall list some popular DeFi tokens in the current crypto marketplace.
Top 5 Trending DeFi Tokens in 2023
Here is the list of prominent decentralized finance tokens ruling the crypto marketplaces.
AVAX is the native crypto token of the Avalanche blockchain platform. You can use this token to pay the transaction fees and buy other blockchain tokens with these tokens as all are interrelated to each other.
Lido DAO (LDO)
This token is created by the eminent Decentralized Autonomous Organization (DAO) using the ERC20 token standard of the Ethereum blockchain. It functions as a governance token that offers the token holders the right and authority to vote for the decisions taken in the DAOs.
A popular DeFi exchange, Uniswap, created its native token UNI. It is also built with Ethereum’s popular standard ERC20. It increases the liquidity of the Uniswap platform acting as a governance token.
AAVE is a token created with the ERC20 standard of Ethereum and a native currency of the DeFi exchange AAVE. It acts as collateral for receiving loans and repaying interest. The AAVE tokens also help to reward the users of the DEX (decentralized exchange) platform.
LINK is the native token of the DeFi blockchain ‘Chainlink’ built with the ERC677 standard of the Ethereum blockchain. A LINK token serves as a payment module in the Chainlink blockchain for retrieving off-chain data and executing computations.
If you wish to get added to this list, you can also initiate DeFi token development. The decentralized finance tokens you create can be used in many real-life applications. We shall discuss that below.
What are the Use Cases of DeFi Tokens?
You can sell your tokens and access them in various decentralized finance platforms that include,
Decentralized Autonomous Organizations(DAOs)
DAOs are similar to institutions where decentralized bodies will govern the organization. Users will be given the right to vote on essential financial operations like asset management, fundraising, and governance enactment. Even a minimal investor who invested one token can also vote in the activities of DAO.
Since decentralized finance offers full control over funds for the users that fetches a sense of responsibility. They can manage their assets by buying, selling, and trading digital assets, keeping sensitive data private. So, asset management is deemed one of the most valuable DeFi applications for users.
Peculiar crypto token holders are earning much craze in the crypto space. To create one such name, you should initiate DeFi token development and sell it. If your token gets popular, you can generate remarkable revenue in return. Thus, DeFi tokens play as a game-changer in providing entry to the global decentralized platforms.
Popular DeFi Token Standards
To create DeFi tokens, the most important parameter is the token standards. Since Defi tokens are built on existing blockchains, choosing the ideal blockchain and the adequate token standard becomes mandatory. Here are the trending Defi token standards for token creation.
Ethereum DeFi Token Development
Ethereum blockchain is one of the highly scalable and decentralized networks specially built for incorporating Decentralized applications. It is widely used around the globe and works on the proof of stake consensus mechanism. Popular Decentralized Exchanges like Uniswap and Sushiswap have all been developed on the Ethereum blockchain.
ERC-20 is one of the prominent token standards mainly used for creating fungible tokens on the Ethereum blockchain. As ERC stands for “Ethereum request for comment”, the standard represents the specifications with which the tokens need to be designed and provides a convenient route for developers. ERC20 Token Development is primarily used in crowdfunding methods like ICO, STO, etc.
ERC-223 token standard facilitates covering up the flaws oriented with ERC20 tokens. The newly created ERC-223 token standard has improved functionality and efficiency. Thus, through this standard, the users can securely transfer tokens to a Crypto wallet.
ERC – 1400
ERC 1400 is the token standard for creating security tokens on the Ethereum blockchain. It has covered additional features like security and compliance while also improving the interoperability between tokens.
ERC – 721
ERC-721 token standard represents the guidelines needed to create non-fungible tokens on the Ethereum blockchain. The token cannot be interchanged for an equivalent token and each token has a unique value.
ERC – 827
ERC-827 accounts for adding flexibility to the existing ERC20 token. The token standard also has other benefits like security and calls in transfers and approvals. ERC-827 token standard aims to create a more adaptable framework and ease out operations.
ERC – 1155
ERC-1155 is a semi-fungible token standard that allows the creation of fungible and non-fungible tokens on a single smart contract. The utility and technical applications available on the ERC1155 token standard are more than ERC20 and ERC721 combinedly.
Binance Smart Chain Token Development
Binance Smart Chain was introduced and built by the popular exchange, Binance to facilitate Decentralized Exchanges like PancakeSwap, Bakeryswap, etc. Consider to be one of the low-cost transaction and faster blockchains, the Binance Smart Chain runs on the proof of stake consensus algorithm and is followed by a set of community members.
BEP20 token standard provides the regulations to create fungible tokens on the Binance smart chain blockchain. Popular Cryptocurrencies like BNB (Binance Coin), and Cake (Pancakeswap) were all BEP20 tokens at first. Developing BEP20 tokens has numerous advantages and values over other token developments due to its highly effective nature.
Tron DeFi Token Development
Tron is one of the widely known blockchains used especially for entertainment basis. The blockchain currently has two main token standards TRC10 and TRC20. The native coin TRX is important to Create Tron Tokens.
TRC-10 is the earlier Tron token standard that does not require a Tron Virtual Machine for creating tokens on the blockchain. It can be accessed easily through an API and the transaction fee is quite lower in comparison to the TRC-20 token.
TRC-20 specifies the rules and regulations for creating fungible tokens on the Tron blockchain. The TRC20 token provides advanced functionalities and customization rather than just the simple applications available in the TRC-10 token.
TRC-721 denotes the specifications required to create non-fungible tokens on the Tron blockchain. Different categories of digital collectibles including Art, Music can be transformed into NFTs through this token standard.
Other Popular Defi Token Standard
Apart from Ethereum, Tron, and Binance Smart Chain, other blockchains are increasingly making their presence in the industry. Even Bitcoin blockchain developers are working on bringing NFTs into the equation. Learning more about BRC20 tokens could be useful to understand how the industry is transforming at the moment.
The BRC20 token standard is among the newest token standard entries in the Crypto industry with extraordinary promise. Earlier, the technical side of the Bitcoin blockchain did not allow the creation of fungible tokens. However, with the latest advancement based on ordinal inscriptions, the BRC20 Token Development is a great strategy for investors.
How to Start a DeFi Token Development?
After knowing the use cases, you will need clarification on where to create them. As a startup, you can create a DeFi token on your own or approach a development company for professional guidance. Developing a crypto token by yourself might create some errors in the development phase as you might not be technically an expert in it. On the other hand, if you approach a reputed DeFi token development company, you can get your expected results in minimal time. Thus, going with professional support will help you in the long run.
Many companies are offering token development as a service with only minimal features. But, Coinsclone always excels in creating feature-rich DeFi tokens. Coinsclone is a reputed DeFi Exchange Development Company with a high success rate. Our company has expert developers who have mastered blockchain-related projects for startups.
We not only develop the DeFi tokens, but we also offer them as a complete package in the form of a DeFi exchange script. It comes along with a premium decentralized exchange and DeFi tokens. Our exemplary services include crypto exchange script, NFT Marketplace Development, Crypto Payment Gateway Development, crypto token development, etc. You can leverage any crypto-related services from Coinsclone for the best results.