The Development Of An ERC-20 Token

Unlike the Bitcoin protocol, the Ethereum protocol was explicitly designed to do more than simply create and record transfers of its own cryptocurrencies.

While these tokens work within the framework established by the Ethereum team, erc20 token creator the framework is broad enough to simultaneously allow developers considerable flexibility in token design and function.

Most of the tokens created to launch ICOs on Ethereum comply with the ERC20 standard, although there are also two other standards as we will see later, called ERC223 and ERC721. That is why we always recommend studying all the projects well before becoming financially involved in one.

WHY WOULD ANYONE WANT TO CREATE A TOKEN ‘ON TOP’ OF ETHEREUM?

Mainly because these tokens created using the ERC-20 standard benefit from the existing infrastructure of Ethereum instead of having to build an entirely new blockchain for them, with the time and resource savings that this entails.

On the other hand, the creation of new tokens strengthens the Ethereum ecosystem by boosting the demand for Ether, which makes the entire network even more secure.

And lastly for its interoperability . If all tokens created on the Ethereum network use the same standard, those tokens will be easily interchangeable and can easily work with other Ðapps in the same ecosystem.

What makes a token “standardized” is that it uses a certain set of functions.

If multiple tokens behave similarly, calling the same functions in the same way, then an Ðapp can more easily interact with different sub-coins.

In short, ERC-20 token generator defines a common list of rules for all tokens built on top of Ethereum , making it a lot easier for developers by allowing them to accurately predict how those new tokens will perform within the system.

Does the value of the Ether then affect the value of the token?

Not at the beginning. demand for the token in the market or speculation about its future value. The important thing is that the fact that it is the Ethereum Virtual Machine (EVM) that executes the shared calculations that describe the distribution and movements of the token does not mean that the value of the token is the same as that of Ether.

The Ether will be used as ‘ gas ‘ to run any applications related to the tokens (and in a sense if the value of the Ether were to plummet it could jeopardize the stability and usefulness of the tokens running on top of Ethereum), but the value of the token is generally decoupled from the value of the Ether .

THE DEVELOPMENT OF AN ERC-20 TOKEN

githubGoing a little deeper into the purely technical aspect of this standard (which the Ethereum foundation and community are still working on improving even today), you can find its specifications on this Github page .

It explains that the token code must be made up of nine methods and two events:

Methods

Name (optional) — Name of the token.

Symbol (optional) — Token symbol.

Decimals (optional) — The number of decimal places used by the token.

TotalSupply — Total supply of tokens that will exist.

BalanceOf — Balance of the owner’s account.

Transfer — Transfer to…

TransferFrom — Transfer from…

Approve — Allows withdrawal of funds.

Allowance — Returns the amount that can be withdrawn.

Events

Transfer — Activated when tokens are transferred.

Approval — Activated whenever the transfer is approved.

In general, these are basic types of functionality, including how tokens are transferred and how users can access data about a token. In the Ethereum wiki you can find more technical information about it. At first glance, this transaction may look like an empty Ether transaction, since the “value” of Ether is zero, but if we look at the text in the red box we see that it is about sending OmiseGo tokens and the Ethereum network addresses that were involved in it.

Token customization

In addition to the standard methods just covered, ERC-20 tokens can be customized to enable the following features:

Automatic buying and selling : You can link the value of the token with that of another token or currency by creating a fund that automatically buys or sells tokens to maintain the balance.

Automatic Top-up: Transactions on the Ethereum blockchain require payments to miners in ‘gas’. You can program your token to automatically top up gas for future transactions if it drops below a certain level.

Adding a central ‘mint’ that can change the number of tokens in circulation — Could be useful if your token mirrors or simulates government currencies.

Frozen Tokens — If directed to do so by a regulatory body, you can freeze tokens owned by a user and unfreeze them when needed.

Proof-of-Work : You can tie your token supply to the Ether supply by scheduling a contract to run a “merged miner” with Ethereum. A miner who finds a block on Ethereum will also get a predetermined number of your tokens as a block reward.

create erc20 token