Cryptocurrency Development Company

Issuing a cryptocurrency, holding an initial offering, and getting listed on an exchange are tasks that crypto startups and we, developers, usually deal with. With that, most people think creating a cryptocurrency isn’t a big deal at all and one only needs to find a couple of experienced programmers. However, 99% of such cryptocurrencies will be doomed to fail and will never pay off.

The development of successful cryptocurrency projects capable of making their creators wealthy and famous involves teams of diverse specialists who work shoulder to shoulder to achieve the common goals. Let’s tell you how to create a cryptocurrency and get through the major phases you can’t blow over.

Typical crypto project components

Crypto project concept and white paper development

Just as the construction of a solid house starts with design, the cornerstone of creating a new cryptocurrency is the concept. It’s the white paper with a detailed description of your idea, which will convince the investors that the demand for your coin or token will grow. This is the most complex document as it takes extremely long to draw and work out. Working on the concept usually covers the following:

• Selecting a base coin for a fork or a smart contract concept for a token
• Forming cryptocurrency characteristics
• Formalising the legal framework of the coin
• Describing product specifics and values
• Planning the initial offering
• Outlining a roadmap, i.e. the project development plan with key milestones on the timeline.

Legal matters

The most important development phase is forming the legal concept of the coin. It will help avoid many problems with regulatory authorities, including prosecution by the SEC and initiation of a criminal case. You will need to register legal entities, draw up legal documents (including the Legal Opinion), and open bank accounts.

Technological matters

At this development phase, the entire technological framework, engine, crypto wallets, promo website, and personal account are created. Here you need to decide whether it will be a coin with its own blockchain or a token on popular blockchain platforms (Ethereum, Cardano, TRON). We have written about the key differences between these approaches below.

Token sale or initial offering (ICO, IEO)

The initial offering of a coin or token to the investors. The ICO development implies creating the investor account and large marketing costs aimed at attracting investors. This stage includes cryptocurrency promotion, advertising, and forming a community. You should run a blog on your website or social media channels. The fund generation volume depends on skilful marketing management. Conducting bounty campaigns also catalysed the coin’s evolution and popularity.

Since 2019, there has been a demand for initial exchange offerings (IEO). Generally, this event is handier as it doesn’t require creating an investor account, carrying out KYC verifications and other procedures as all of it falls within the crypto exchange’s responsibility. However, you will have to pay it for the IEO service. At the same time, exchanges set very severe requirements for candidate projects.

Getting listed on crypto exchanges, market making

Being present on 2–3 crypto exchanges where trading will be launched is one of the cornerstones of successful development of your cryptocurrency. At the very beginning, the trade volume may be poor or even zero. In this case, startups resort to market makers. By the way, Polygant also provides market making services.

Cryptocurrency development costs

Concept and white paper development	This costs $5000–8000 and takes about a month.
Legal matters	This costs $8000–16,000 and takes several months. It can be done in parallel with arranging technological matters.
Technological matters: developing the coin protocol, deploying nodes, creating wallets and a website	This costs at least $50,000. It’s possible to save ~$15,000 if you issue tokens on the Ethereum blockchain; however, this may entail some inconveniences.
Token sale, initial offering	Token sale costs at least $50,000. For IEO, 10–25% of the collected funds must be paid to an exchange.
Getting listed on crypto exchanges	The cost depends on the ranking of an exchange on Coinmarketcap: Top 20 ask for 300,000–500,000 USDT, selecting projects very carefully and requiring compliance. Top 20 to top 50 charge 8–15 BTC. Top 50 to top 100 charge 2–7 BTC.

Legal and financial matters

Financial regulatory authorities of states seeking to streamline the cryptocurrency sector have already developed guidelines that prescribe the classification:

• Swiss Financial Markets Authority (FINMA) — February 2018 version
• The US Securities and Exchange Commission (SEC) — April 2019 version
• The UK Financial Conduct Authority (FCA) — July 2019 version.

Despite some terminological differences, those authorities divide cryptocurrencies into three types:

1. Payment tokens (FINMA) / coins (SEC) / exchange tokens (FCA). These are cryptocurrencies with their own blockchain technology, such as Bitcoin, Dogecoin, Ethereum, Litecoin, and other altcoins. Some countries have already recognized them as a means of payment, others only consider them as a digital asset. However, nowhere are coins classified as securities and don’t need to be registered for issuance. This type is, after all, designed for payments, not for receiving yield or rights by stakeholders.
2. Utility tokens (FINMA, SEC, FCA unanimous). They give access to a decentralized app or service, usually only within a project that issued them. Resemble a virtual currency used in games or on social media. The only difference is that the prices of such tokens are determined not by the issuer but by supply and demand in the market. Although the issuance of utility tokens is not subject to any legal difficulties, one should always be ready to prove to a regulator the applicability of such tokens in an operating service; otherwise, they will be recognized as investment assets.
3. Asset tokens (FINMA) / security tokens (SEC, FCA). Their holder can claim a share of the company’s profit or participation in its management. This type of tokens has characteristics of securities, and in most countries the unregistered issue and sale of securities or their analogues is considered a financial crime. Registering the issue and initial offering of security tokens is a long and effort-consuming process.

The UK FCA has an additional condition regarding stablecoins: if they are backed by fiat assets or a basket of crypto assets, they may be recognized as electronic money. That said, they will be placed alongside fiat currencies of electronic payment systems such as PayPal and Worldpay. This causes even more confusion, especially because stablecoins are not actually coins (despite the ‘-coins’ in the word) but utility tokens.

Beware of the SEC

A proper concept and knowledge of the specifics of different jurisdictions are advantages that may help avoid a ton of problems. Issuing tokens in the United States or for the US market, be ready to become a target for the Securities and Exchange Commission. Below is the list of companies and their cryptocurrencies that have been involved in SEC-initiated litigation for H1 2023:

Date	Company (cryptocurrency ticker)	Funds raised ($)	Status
18 May 2023	Hydrogen Technology (HYDRO)	2.2 m	Prohibition of cooperation with investment consultants, brokers, dealers, advisors, agents
28 April 2023	Up, Global SEZC, Coinme (UP)	3.65 m	Civil money penalties of $3.52 m and $250 000
24 February 2023	ShipChain (SHIP)	27.6 m	Civil money penalty of $2.05 m
24 February 2023	Blockchain Credit Partners, DeFi Money Market (mTokens и DMG)	31.6 m	Disgorgement, civil penalty, and prejudgment interest in the amount of $13.4 m
9 February 2023	BitClave PTE (CAT)	25.5 m	Disgorgement, civil penalty, and prejudgment interest in the amount of $29.3 m
19 January 2023	Nexo Capital (EIP)	2.7 bn	Civil money penalty of $22.5 m
13 January 2023	Unikrn (UKG)	31 m	Civil money penalty of $6.1 m

Cryptocurrency development technology

Unlike regulatory authorities, developers only divide cryptocurrencies into coins and tokens, depending on the availability of a blockchain.

Coins (blockchain projects)

A coin is a cryptocurrency created from scratch and based on the dedicated blockchain, or using a fork of an existing coin, e.g. Bitcoin or Ethereum. Also, there is the term ‘altcoin’ (alternative coin) which means any cryptocurrency besides Bitcoin that had been the only blockchain-powered cryptocurrency until 2011.

Top 5 highest-capitalization coins (July 2023)

Rank	Name (ticker)	Capitalization ($)	Market price ($)
1	Bitcoin (BTC)	580.4 bn	29,865.56
2	Ethereum (ETH)	227.8 bn	1895.69
3	XRP (XRP)	41.6 bn	0.7919
4	BNB (BNB)	37.5 bn	243.69
5	Cardano (ADA)	11.1 bn	0.3158

In addition to a blockchain, such crypto projects have a network of full nodes to support the protocol running, a tech team, and a community of users.

Polygant’s experienced developers have already crafted 11 coins of different complexity and are now working on two new coins. To create a cryptocurrency, we take a relevant source code, make the necessary changes, and compile it. As a rule, cryptocurrency development process consists of 5 stages:

1. Terms of reference for the development of a system.
2. Compiling the coin core and wallet for Windows/Linux.
3. Deploying two primary nodes.
4. Creating a block explorer and mining pool.
5. Compiling mobile wallets for iOS and Android platforms.

Tokens (utility and security)

A token doesn’t have its own blockchain and supporting nodes but uses a third-party coin’s blockchain. Most often, Ethereum’s blockchain is chosen to create tokens, though this function is provided in various blockchain projects, e.g. BNB Chain, TRON. Despite the fact that tokens are used as an internal currency or a means of access to a decentralized app/service, first investors try to purchase them for further reselling on crypto exchanges.

Top 5 highest-capitalization tokens (July 2023)

Rank	Name (ticker)	Blockchain development platform	Capitalization ($)	Market price ($)
1	Tether (USDT)	Omni / Ethereum / Algorand / TRON / BNB Chain	83.8 bn	1.00
2	USD Coin (USDC)	Ethereum / Solana / TRON / BNB Chain / Fantom	26.9 bn	1,00
3	Wrapped Bitcoin (WBTC)	Ethereum / Near / Fantom / Polygon	4.8 bn	29,865.56
4	Dai (DAI)	Ethereum / Polygon / BNB Chain / Fantom / Gnosis	4.6 bn	0.9995
5	Shiba Inu (SHIB)	Ethereum / BNB Chain / Solana / Terra	4.6 bn	0.00000778

To create a token, we need to craft a smart contract and embed it in a blockchain. Take into account the peculiarity of ERC tokens on Ethereum: any operation there, whether issuing or transferring tokens, consumes gas (network fee) which costs a certain amount of ether. Thus, to make a transaction, the sender must have not only ERC tokens in their wallet but also ETH coins. And this is not always that convenient.

The development of a smart contract takes from one week and costs $1000–5000. The integration with web services and web wallet, as well as further token offering, are being worked out separately.

Our developers have 10 years of experience in both programming smart contracts for tokens and creating blockchain-powered coins. Contact us on Telegram to learn more about turnkey cryptocurrency development.

Cryptocurrency website

You will need to build a website that will clearly convey the value of your project to potential investors. What most projects stay with is a one-page structure which comes in very handy for awareness purposes. The main website and white paper language is English, but there are also often versions localised into 3–5 common languages. The website usually contains the following:

• General project info, white paper.
• Development team (5–7 key members). The more professional the team looks, the more funds you will be able to raise.
• Links to social channels or profiles (Twitter, Telegram, Facebook, Medium, LinkedIn). Most success factors depend on skilful community management.
• Section of investor personal account.
• Links to download a desktop, mobile, or web wallet; it is better to have all types at once.
• A list of exchanges and open markets where people can purchase your new cryptocurrency.

What an ICO is

An initial coin offering is an event during which a token or coin is presented to investors. Simply put, it is the issuance of a specific number of tokens or coins and an attempt to convince future investors to buy them for a more liquid cryptocurrency (e.g. BTC or ETH) at the price set by the creator. Quite often, ERC tokens are used in this context, as it is easy to program and deploy smart contracts in Ethereum.

Getting listed on exchanges

Once you have issued a cryptocurrency and sold some through your website, you may wonder where people will trade the new coin and how to expand the audience. To get new investors and traders interested and involved in active trading, you need your crypto to be listed. Before listing, the exchange will ask you to get through preparatory procedures:

1. Your project must have a live community with communication channels (e.g. Facebook, Telegram, Twitter, etc.).
2. You have to pay for the listing service, which costs from $1000 for little-known exchanges to $500,000 for popular ones. Moreover, popular exchanges want to add coins of only those projects that prove their worthiness.
3. You have to provide the experienced team that will integrate your project with the exchange.

Initial Exchange Offering (IEO)

Since early 2019, the initial exchange offering has begun to conquer the crypto market. At the same time, ICO and traditional listing haven’t gone anywhere, an alternative solution for cryptocurrency developers has just appeared. IEO is considered a hybrid of the ICO and listing, or a token sale held immediately on the crypto exchange. Here you only need to cooperate with a proper crypto exchange. Crypto project developers find many advantages in this model:

• The website doesn’t need to have investor accounts
• An exchange has a base of loyal users
• Traders and investors rush to buy a new cryptocurrency verified by the exchange
• An exchange acts as a partner in promotion, announcing the project on its channels
• The market entry and sales of developed cryptocurrency are accelerated.

For example, here are the top 15 most successful tokens that have ever held an IEO (as of July 2023):

Besides the ICO and IEO, there are other innovative solutions to facilitate cryptocurrency offerings: Security Token Offering (STO), Initial Airdrop Offering (IAO), Initial Fork Offering (IFO), Initial Miner Offering (IMO).

Want to get into all the nuances? Submit a request and we will explain everything in detail. Then together we will work out a strategy for developing a cryptocurrency from scratch and offering it on exchanges!