DeFi tokens are the backbone of the decentralized ecosystem. They can be easily traded and transferred by users as tokens have a specific value attached to them and can be utilized for various purposes. It is also called a special kind of digital currency. It can perform a lot of roles in the native blockchain network or financial ecosystem.
What are DeFi Tokens?
DeFi tokens have different use cases like an exchange, payment, trading, investment, and exercising voting rights. They have a financial or economic value. Users will be incentivized to utilize a platform’s native token by being offered trading discounts or lower interest rates. They may also receive free tokens for doing specific actions favorable to the DeFi platform. Some of the popular DeFi protocols offering tokens are Compound, MakerDAO, Kyber Network, and Aave.
What Are the Main Differences Between the DeFi Tokens and Coins?
- Tokens are non-fungible in nature while coins are fungible.
- Coins act as a value-based currency while tokens perform a lot of functions.
- Tokens are highly secured by cryptography and possess a lot of accountability. On the other hand, coins have constant supply and durability.
- Tokens can be recovered but coins cannot be recovered.
Steps to Follow to Launch a Defi Token
➼ Decide the token name, the symbol or logo, and the total supply.
➼ Choose an appropriate blockchain network for launching the DeFi token.
➼ Make sure that you are clear about the purpose of the token or coin and what problem it is aiming to solve.
➼ Create an account to build your DeFi token.
➼ Deploy a new smart contract that will automate all the operations.
➼ Make sure that your token can be sent to different addresses of the users easily.
➼ Create a token transfer event that alerts the DeFi wallets whenever there is a transfer of your DeFi token.
➼ Decide the transaction fees whenever your token is transferred.
➼ Copy your wallet address which will help to transfer the token or coin from the wallet in which it is being originally held.
➼ The wallet will also help you to store and manage all your tokens.
➼ Prepare the token migration procedure which should be enabled in the form of easy and flawless processing of transactions. The entire process must be secured and decentralized.
➼ You can also list your token on leading exchanges in the market to facilitate its trading and sale. This will be done after the DeFi token creation.
➼ Introduce a cold storage facility that will assure users to safe keep their tokens from any unauthorized access. This will ensure that there is no compromise in the security of the DeFi tokens.
➼ Update all the token information by copying the token contract address.
➼ Save it after pressing the submit option.
➼ The updated token information will be displayed on the screen.
➼ You can try to send your token to another user by performing a transaction.
➼ The transaction will consist of details like the block number, hash, and the total amount.
Add the wallet address.
➼ Your token will be created soon and will be ready for use.
Various Factors to Consider While Launching a Defi Token Platform
- Analyze your business requirements thoroughly.
- Evaluate the technical and economic feasibility of the DeFi token or coin to be created.
- Formulate a solid distribution strategy and reserve a certain percentage of tokens for the creators and team members of the project.
- Prepare the whitepaper and include all the technical details, financial aspects, the legal terms and conditions, and the benefits offered to the investors through the DeFi token or coin.
- Introduce an escrow service that holds all the funds of the users safely.
- Market your token aggressively across various communication channels to boost its demand.
- Once you activate and release your token in the market, offer swift technical support services to deal with queries and glitches raised by the users.
Some Typical Features of Defi Tokens and Coins
➼ DeFi tokens act as a mix of both utility and security.
➼ They will be developed on an existing blockchain platform like Ethereum, EOS, NEO, Stellar, and Hyperledger.
➼ It require a certain amount of crypto to get the miners of the blockchain network to validate the transactions conducted using the token.
➼ DeFi tokens are used on DApps and activate the features of the application they were actually designed for. It can also be integrated with smart contracts and asset exchange platforms.
➼ It can be swapped easily.
➼ All the transactions executed for buying or selling DeFi tokens and coins can be tracked easily via a distributed public ledger.
➼ No protection or insurance will be provided if the investors happen to lose their DeFi tokens or coins.
➼ DeFi tokens are of different types like security, utility, payment, and equity tokens.
➼ It can be integrated with crowdfunding, loyalty programs, and voting.
➼ DeFi coins will be native to a particular blockchain network.
➼ It can be used to transfer money, utilized as a store of value, or as a unit of account.
➼ DeFi coins are interoperable, flexible, liquid, and permissionless.
DeFi tokens or coins are in high demand now owing to the cryptocurrency boom. This is the right time for launching DeFi projects as they offer more returns than traditional financial instruments. They are gaining heavy business traction after being listed on the top cryptocurrency exchanges in the market. It is witnessing a bullish run due to aggressive buying by traders.
Blockchain App Factory has also kept pace with the changing trends and is a leading DeFi token development company that helps in boosting the growth and usage of your decentralized applications. This will help in garnering a lot of attention from the mainstream economy in the future.