Create your own cryptocurrency on your own exchange: Open-source exchange software makes starting a coin easier, says Adrian Pollard, Co-Founder of HollaEx.
Crypto newbies and even experts have a common gripe when it comes to starting a new coin or token. Both camps tend to dislike the start-up nature of a coin. It’s not simple, it’s not transparent, and it’s hard to manage starting a coin. Rookies struggle to figure out how to price their coin, let alone share it. Experts too. Challenges discourage people from even trying.
Starting a new coin or token: The breakdown
For the uninitiated, when we talk about tokens and coins it is important to note that they are used interchangeably. The difference for a token though is that they generally use existing blockchains like Ethereum or even Bitcoin’s blockchain. But the vast majority are using the ERC-20 token standard, because it increases usability and the chance of adoption.
Technically, the term “coin” would use its own blockchain. This is what Dogecoin did by forking Bitcoin. Dogecoin is essentially a Bitcoin clone with minor changes along the way.
For the sake of this article, we will use coin and token interchangeably.
Typically, coin and token creators change easily configurable settings. These are things like the supply or number of coins, the name of the coin, and the symbol (think BTC, DOGE, etc.). All of this is easy to configure, but one thing that is not easy to configure is the the price. The price of a part requires much more work.
Even if you create your own coin with the perfect purpose there still won’t be a price. This is where all new coin or token creators hit a wall.
Create your own cryptocurrency: Price
Where do the prices come from? You can set a static price, but that’s not good for new and unfamiliar things. Simply put, you should place your coin in a “supply and demand” scenario and let others decide the price. What this really means is that people, lots of people, have to start buying and selling the coin over a long period of time. There’s no better place for this to happen than on an exchange.
This is why popular exchanges like Uniswap are so large. They allow coin creators to make markets in the hopes of pricing their coin. These platforms are great if your coin is already well known. But they aren’t great if you are just getting started. The reality is they are expensive to use for coin price discovery.
Why? First, the fees for buying and selling on these platforms are high because they require a blockchain transaction or an on-chain transaction. That means you could pay around $5 (if you’re lucky) or even $50 per transaction. This is why centralized exchanges remain much more popular.
Not only that, but centralized exchanges are better for new coins because they have a transparent orderbook that is easier on the price discovery process. Cheaper and faster than using a decentralized exchange, it is easy to see why a new coin creator will want to list on these centralized platforms.
Create your own cryptocurrency: Communication
Then there’s the other fly in the ointment. Something that is rarely talked about, but every good business owner knows, is a problem. You cannot easily communicate the idea of the coin on these decentralized exchanges. If you can’t share your idea, people will never accept the idea for the coin, no matter how much it costs. You may not even be able to give away your coin for free!
Many coin creators actually go to great lengths to list their coin on the popular large, centralized exchanges in the hopes of getting their coin’s logo and brand out there to the public. But most can’t afford to do so, and compromise by listing only on a decentralized exchange (DEX).
A lot of expense will be spent on this endeavor – both by coin creator and users. Countless coins are added to DEXs every day. But none of these DEXs have a way to display coin information. Not even a logo is easily added!
Frankly, coins without a clear brand or home are doomed to fail.
If a coin is not on a proper exchange, with a clear order book, clear historical price chart, login/register page, wallet system for easy and free deposits/withdrawals, and clear logos and icons, then everything else will be wasted effort guaranteed.
Who is going to buy your token or coin if they can’t even see the logo or even the most basic semblance of information on it?
An exchange platform is the lifeblood of any new coin and token, as it communicates the intent and goals of the token. This leads to the discovery of real prices.
Create your own cryptocurrency: Cost of starting a coin
Starting a coin is typically expensive all things considered. As outlined in this article it can cost about $400 (often more) and depends on the traffic on Ethereum. After the initial coin creation process, you will probably decide to list on a DEX which will require yet again multiple on-chain payments for registering the coin on the DEX. There is also the matter of providing liquidity which is another topic altogether. But suffice to say, you are going to need more than $400.
A safer way to start a coin is to simply get it listed on a big centralized exchange like Binance, but you’ll be looking at $100,000 – if you’re lucky. The big platforms won’t list anything, even if you have the money.
All these unnecessary complications and never-ending start-up costs are off-putting to businesses and startups alike. As a result, this puts many people on the fence about starting their own cryptocurrency. It is truly a frustrating experience even for the most advanced crypto-savvy startups and businesses.
Every coin creator needs their own special and dedicated marketplace for their coin. Having your own digital marketplace allows for careful management of new coin creation, pricing, supply issuance and, of course, communication. Managing a market or an exchange is like having your own mini economic system with centralized information for your users.
An exchange is the logical place to start for coin creators, an exchange can more easily manage the coin set up, market and pricing.
An exchange software kit, which provides all the tools for sourcing and distributing coins directly to user accounts, is the main thing coin creators need at the start of their journey. The platform can manage each user’s coin balance. And, it can automatically handle deposits and withdrawals of not only your own new coin, but also other coins like Bitcoin and Ethereum. Of course, since everything is centralized on your own computer, the fees you would normally pay to the blockchain are no longer necessary. This reduces start-up costs.
To add, with a little tech knowledge, using a free open-source exchange software solution to further reduce cost is a smart choice.
Centralized technology mixed with DeFi
Exchange software tools take the burden off coin creators and crypto projects. An exchange functions as a basis for the coin: it includes the wallet, the price charts and all the mechanisms to buy and sell the coin. Anyone can start their coin with the trading software for free. Standalone coin creation software, on the other hand, will only do 5% of the work of starting a new coin.
An option is to start a coin with a white-label solution. This is a fancy way of saying a ready-made solution. It means the difficult stages of a coin’s life cycle can be more easily managed because it provides greater control and optionality.
For example, instead of tossing the token on the blockchain first, users can simply create the token in the exchange software itself first internally. This means no blockchain fees and less hassle in the coin creation process. Having an exchange platform will also allow pre-marketing, communication and pre-trading of other coins like BTC or ETH. It also means that anyone with a user base can offer the typical crypto exchange services.
This process is a much safer and more intuitive way to operate a crypto project and business because it requires less third-party coordination. Instead, everything is handled by a single operator in their own web browser.
Customization is also much easier using a swap software kit like HollaEx as it allows changes to be made on the fly without a programmer’s request. This means that listing your coin and exchange on popular websites such as CoinMarketCap and CoinGecko will be easier. Simply adjust what is needed on your exchange based on the requirements of these parts listing websites. Customization is not possible if your coin is listed on third-party exchanges, as you do not control the platform.
By running your own exchange, you not only bypass costly blockchain set up fees, but you’ve also simplified your token, branding, and whole crypto businesses management process. The tokenomic system will be much more straightforward to craft while the token or coin project grows.
Create and price your coin with exchange software
Finally, creating your coin on your own exchange that you control will mean that many more trading avenues will present themselves. For example, once your coin is priced, you can start reward systems for using your exchange. You can even have other tokens representing other goods and services. Your clientele can subscribe to it to get dibs earlier on the token supply. But at the end of the day, there is no better way to price your coin than to have your own exchange.
Create your own cryptocurrency: How to start
The best place to start is to research white-label crypto exchange tool kits and try them out yourself. Free options that are open to use, are always better. They have been vetted and are in use in the public domain and go by the crypto open protocol ethos. Good luck and happy coin creation!
