Unleashing Tokenization Potential: Creating Your Own Fungible Tokens on Obyteby@obyte
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Unleashing Tokenization Potential: Creating Your Own Fungible Tokens on Obyte

by ObyteJune 13th, 2023
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Digital tokens have the potential for numerous use cases, from governance inside decentralized platforms to barely a joke with some value (a memecoin). You can use them for whatever you want to, and you can create your own customized tokens as well. Obyte has this option available for beginners and experienced users.
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We’re seeing digital tokens everywhere these days. They have the potential for numerous use cases, from governance inside decentralized platforms to barely a joke with some value (a memecoin). You can use them for whatever you want to, and you can create your own customized tokens as well. Obyte has this option available for beginners and experienced users.

In this article, we'll delve into the process of creating fungible tokens in Obyte. We’ll highlight the advantages, customization options, and factors that determine the price of your newly minted token. Let’s explore how this could empower your ideas. 

Cryptocurrency vs Token

Cryptocurrencies and tokens are often used interchangeably, but they could have distinct characteristics. Coins like Bitcoin (BTC) and Ether (ETH) are digital currencies that operate on their own distributed ledgers and usually work as money by themselves. Tokens, on the other hand, are created on existing platforms and represent a particular asset or utility.

Indeed, “representation” could be a keyword when understanding what a crypto token is. They often represent external assets, internal rights (like governance in a Dapp), credits for rewards, a share in a new project, or even an intangible idea (like a memecoin). Tokens are typically built on bigger networks, and they don’t work outside of them on their own. They can exist as “wrapped” (equivalent) versions in several ledgers, though.

Fungible vs Not Fungible

Tokens can be further classified into two categories: fungible and non-fungible. Fungible tokens are interchangeable and identical to each other, like traditional currencies. In other words, they can work as money. One unit of a fungible token is equal to any other unit of the same asset. And, since they’re fungible, they may have a price per unit determined by supply and demand.

Non-fungible tokens (NFTs), on the other hand, are unique and indivisible, representing ownership of a specific item or asset. They’re not interchangeable, and not every unit has the same value. More than money, they’re like artworks whose price is only determined by the community. This time, we’ll only talk about creating fungible tokens.

Why create a customized fungible token?

According to CoinMarketCap (CMC), there are over 25,400 cryptocurrencies and tokens being traded worldwide. There are coins for international P2P transactions, privacy coins, stablecoins, governance tokens, memecoins, wrapped tokens, shares, rewards, copycats of other coins, and more. So, why create another one from scratch? 

A token can represent virtually anything, digital or physical. An interesting use case for very specific cases is fractional ownership. This allows you to tokenize (convert into tokens) real-world assets such as property, commodities, or even digital goods. Then, for example, if someone buys a small portion of a tokenized apartment, they’d have the right to receive a proportional percentage if the property is rented or sold out.

Another use case would be a loyalty program for your business. By issuing tokens to customers, companies can reward and incentivize repeat purchases, referrals, and engagement. These tokens can be redeemed for discounts, exclusive offers, or even converted into other digital assets. The same applies to family or social tokens, where parents or leaders can create a set of customized tokens for their kids or community to earn in exchange for good deeds and domestic tasks.

Beyond these uses, customized crypto tokens are very useful for new projects and startups. They could work to raise funds (like on Initial Coin Offerings), provide in-game currencies for players, access premium features in any platform, to represent precious metals shares for customers, and to become a governance or native asset in a new DeFi platform. The limits are in the size and goals of the project behind, since fungible tokens are only a tool by themselves.

Tokens without coding

You might think that creating your own token requires advanced coding skills, but that's not always the case. Obyte offers a user-friendly platform that allows you to create tokens without any coding knowledge. By using the Obyte wallet and the built-in token creation tool or the Asset Registry online, you can define your own token's properties. That includes name, symbol, total supply, and decimals. This simplicity empowers individuals and businesses to participate in the token economy without technical barriers or high costs.

The built-in wallet chatbot Asset Registry (Chat – Bot Store) allows you to create a set of untitled tokens just by following its instructions. The parameters are automatically set, though: the tokens will be transferable (fungible), not private, and won’t auto-destroy. The payment for the coinage is barely 0.005 GBYTEs (around $0.05). Once done, the newly-minted tokens will appear in your wallet, and you can do whatever you want with them.

The process is very similar on the Obyte Asset Registry online. You can avoid linking your personal wallet and remain anonymous, though. The registry also allows you to add customized names, decimals, tickers, descriptions, and issuer data. It offers the option to auto-destroy the asset as well. All of this is at the same price as in the wallet chatbot (0.005 GBYTEs).

Tokens with coding

Of course, it's also possible to add more advanced features to new tokens, but some programming knowledge will be needed for that. With coding, you can implement complex tokenomics, such as staking mechanisms, governance features, or even integrate your token with external platforms or services. This advanced level of customization empowers developers to create unique and tailored token experiences.

Among the advanced properties, we have the "cosigned_by_definer," beneficial for compliance purposes. This property requires each transaction involving the token to be cosigned by the issuer, such as a financial institution.

In regulated environments, the "spender_attested" property can be employed to limit ownership and transferability of the token to attested users whose identities have been verified by a trusted attestor —with the Self-Sovereign ID features in Obyte. Now, in cases where privacy is of utmost importance, the "is_private" property can be utilized to ensure that all token transfers remain private and are not visible on the DAG (like with Blackbytes).

For operators of loyalty point systems, setting the "is_transferrable" property to false (by default, it is true) allows the issuer to restrict token trading on a secondary market. Instead, the tokens can only be redeemed with the issuer, thereby controlling their circulation and usage. All of this and more is available by coding your own customized tokens in Node.js, as we’ve pointed out in our developer resources

What’s the price of my new token?

That would be probably zero —if you have done nothing to add value to it. The price of a new token is determined by various factors, but likely the most significant one is market demand. The more people want to acquire your token, the higher its value will be. 

Factors that influence demand include the token's utility, scarcity (determined by the supply), and overall market conditions. Additionally, external aspects such as the reputation of the project, partnerships, and market trends can also impact the token's price.

It's important to note that the price of a token can fluctuate significantly, especially in the early stages. The market is driven by supply and demand dynamics, so it's crucial to focus on creating value and building a strong community around your token. This includes providing utility, fostering partnerships, and engaging with your token holders. 

As we’ve mentioned above, a fungible token is only a tool. It can’t acquire real value if there’s not a business project or personal venture to back it up. If it’s not used by people, then it won’t have any price. But if it offers real utility (even if that utility is just entertainment), then it could go to the moon.

Whether you prefer a user-friendly approach without coding or want to explore advanced customization options, Obyte provides the necessary tools and ecosystem for token creation. The potential uses and prices after this first step will depend on you, your project, and your imagination entirely. 

Featured Vector Image by storyset / Freepik