Building Your First ERC-20 Token: A Developer’s Guide

Introduction

As a developer transitioning into Web3, creating your first cryptocurrency token is an exciting milestone. In this guide, I’ll walk you through building and deploying an ERC-20 token on the Ethereum network, sharing insights and best practices learned along the way.

Prerequisites

Before we dive in, make sure you have:

• Node.js installed (v14 or later)
• Basic understanding of JavaScript
• Some familiarity with Solidity concepts
• MetaMask wallet installed
• Some test ETH on Sepolia network

Project Setup

First, let’s set up our development environment. We’ll use Hardhat, a popular Ethereum development environment, along with OpenZeppelin’s contracts for secure implementation.

bashCopymkdir crypto-note-token
cd crypto-note-token
npm init -y

# Install necessary dependencies
npm install --save-dev hardhat @openzeppelin/contracts @nomiclabs/hardhat-ethers ethers

Token Design Decisions

When creating our CryptoNote (CNT) token, we made several key design choices:

1. Fixed Maximum Supply: 100 million tokens to ensure scarcity
2. Burning Capability: Allows token holders to reduce total supply
3. Controlled Minting: Only owner can mint new tokens up to max supply
4. Standard Compliance: Full ERC-20 compatibility for exchange listing

Smart Contract Implementation

Let’s examine our token contract piece by piece:

Base Contract Structure

solidityCopy// SPDX-License-Identifier: MIT
pragma solidity ^0.8.20;

import "@openzeppelin/contracts/token/ERC20/ERC20.sol";
import "@openzeppelin/contracts/access/Ownable.sol";

contract CryptoNoteToken is ERC20, Ownable {
    uint256 private constant MAX_SUPPLY = 100_000_000 * 10**18;
    
    constructor() ERC20("CryptoNote", "CNT") Ownable(msg.sender) {
        _mint(msg.sender, MAX_SUPPLY);
    }
}

Key Features

1. Token Burning

solidityCopyfunction burn(uint256 amount) public {
    _burn(msg.sender, amount);
}

2. Controlled Minting

solidityCopyfunction mint(address to, uint256 amount) public onlyOwner {
    require(totalSupply() + amount <= MAX_SUPPLY, "Cannot exceed max supply");
    _mint(to, amount);
}

Security Considerations

1. Using OpenZeppelin
   • We’re using OpenZeppelin’s audited contracts as our base
   • This significantly reduces the risk of vulnerabilities
   • Provides tested implementations of standard functions
2. Access Control
   • Minting restricted to contract owner
   • Burning only allowed for token holders
   • MAX_SUPPLY constant prevents inflation
3. Common Attack Vectors
   • Protected against integer overflow by Solidity 0.8.x
   • No external calls in critical functions
   • Clear access control modifiers

Deployment Process

[Deployment section to be continued as we proceed with actual deployment]

Testing Strategy

[Testing section to be added with actual test cases]

Next Steps & Improvements

Future enhancements could include:

• Token vesting mechanisms
• Governance functionality
• Staking capabilities
• Enhanced access control

Lessons Learned

[To be filled with actual experiences during development]

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Note: This is a living document that will be updated as we progress through the development process.