There is another way to launch a new cryptocurrency.
Certain blockchains are designed to host other cryptocurrencies.
Developers can therefore launch new cryptocurrencies on top of these existing blockchains using newly created currencies called “tokens”. Tokens can function as digital money and are not native to the blockchain on which they operate.
Some tokens are launched with a high degree of customization and can take expertise and time, while others are online in just a few clicks. No technical knowledge required. It only takes a few minutes.
There are also online services that can activate new tokens in minutes.
In August 2022, the number of cryptocurrencies listed on CoinMarketCap exceeded $27,292.30 (US$20,000). Most of these are just copies of existing tokens.
ethereum based crypto
The second largest cryptocurrency in the world by market capitalization was just born in 2015.
Ethereum is the most popular blockchain for launching cryptocurrencies despite its short history. It has become a developer playground and rapidly expanded to become one of the most popular blockchains for decentralized apps and tokens.
You may have heard about some of the popular tokens launched on Ethereum like Meme Token Shiba Inu (SHIB), an alternative to Dogecoin (DOGE). DAI and the Metaverse game The Sandbox (SAND).
binance based crypto
Another popular option, instead of being launched on the Ethereum blockchain, is the BNB blockchain.
BNB, short for “build and build,” is a blockchain launched by Binance, the world’s largest cryptocurrency exchange, and included in the Binance Smart Chain ecosystem.
Proponents of the BNB chain enjoy its low fees and high speeds.
However, there is a trade-off between lower fees and faster speeds on BNB chains. Since Binance is a centralized company, users of the BNB chain are sacrificing the decentralization factor.
This has led some cryptocurrency “purists” to accuse it of violating some of the core pillars of cryptocurrency.
The low fees, fast speed, and ease of launching a cryptocurrency meant that the BNB chain was a highly speculative asset, especially during the pandemic boom.
One such example is Safemoon, which launched in March 2021. It quickly soared, and in May 2021 he was trading at a market cap of $10.9 billion.
However, as with many of these copy-and-paste tokens, the decline is equally dramatic. Safemoon has lost his 99.9% of its value and is trading near zero, with a market capitalization of his $4.4 million (US$3.3 million) as of this writing. According to CoinMarketCap, Safemoon has been migrated to a new version, SafeMoon V2.
The cryptocurrency involved has also faced accusations of being a Ponzi scam, with its founder controlling a large amount of tokens. In addition to allegations of fraud, a class action lawsuit was filed, suing celebrities such as Jake Paul and Soulja Boy for participating in the Pump and Dump scheme.
Given the ease with which these new cryptocurrencies can be created, it’s a poignant reminder that it’s important to stay vigilant.
Chris Zaknun, CEO of DAO Maker, a blockchain project launchpad, said new cryptocurrencies could leave the underlying code vulnerable for certain new projects.
“Hackers and malicious actors can exploit bugs in contract code to trick investors and steal user funds,” said Zaknun. “It is important for investors to check whether the code has been independently audited by a trusted third-party company.”
Solana-based crypto
Solana is another popular blockchain that allows developers to launch tokens.
This is another alternative that offers faster speeds and lower fees than Ethereum. However, even here there are trade-offs. Solana has been plagued with reliability issues and has experienced several major outages.
Despite the problems, interest in Solana has grown over the last year, with an increasing number of non-fungible tokens (NFTs), apps and tokens launched on the blockchain.
