Decentralized Finance (DeFi) is one of the hottest fields in the crypto industry. DeFi has been gaining momentum due to its increasing popularity as a more efficient alternative to traditional finance. DeFi is technology’s best bet to build an open and interconnected global financial system where users have control and visibility over their money. The fact that DeFi aims to end the dominance of centralized authorities in decision-making makes it lucrative for both businesses and individuals. This blog is a brief explainer of how you can build your own DeFi project from scratch.
Source: https://www.eubusinessnews.com/these-european-defi-companies-are-changing-the-finance-industry/
DeFi was already a $200 billion industry in 2021, and its value is only going to increase with increasing adoption. Since DeFi solutions rely on smart contracts instead of banks and financial institutions, services are available round the clock, making global connectivity more efficient. The investment rate in DeFi has been picking up with the rise of tokens like $AAVE and $UNI, and investors are looking to explore investment opportunities within the space to diversify their portfolios. Trends hint at sustainable growth in the DeFi sector in the long run, and hence, building a DeFi project could be a great business opportunity.
Are you looking to start your own DeFi but are stuck due to a lack of technical knowledge? We have got it covered for you. Here’s a detailed guide on how to build your DeFi project from scratch.
Figuring Out Tokenomics: Tokenomics is one of the key pillars of any crypto project. A token highlights the value of the underlying protocol/technology, and when a token does good in terms of price, it reflects the utility of that particular project. You should decide on factors, token-name, symbol and determine the total supply to build sustainable token economics. Since a lot of maths is involved here, the process may take some time. You must also determine the utility or usage of a token that will fuel its value. Once you are done with all the primary steps, you must decide on the blockchain network on which you want to launch your token i.e., Ethereum or Binance Smart Chain. Analyze top DeFi projects like Curve, MakerDAO, AAVE, and Convex Finance. Understand their tokenomics and prepare yours accordingly.
Source: https://chaindebrief.com/tokenomics-crypto-rug-pull-10x/
Launching Smart Contract: A smart contract is the basic building block of a DeFi project. Since DeFi is aimed at transforming the traditional banking system and financial services with automation, having an effective smart contract is vital to automate all the processes for your project’s success. All the major blockchain networks like Ethereum, Solana, and Cardano have smart contracts of their own. Study their models and take assistance from skilled developers in launching your smart contract on the blockchain of your choice. Once you have launched a smart contract, initiate processes like token transfer for testing and determining the transaction fees.
Source: https://academy.shrimpy.io/post/the-best-smart-contract-platforms
Marketing: After development comes marketing. Marketing is the ‘do or die stage’ for any project. You need to have an effective marketing strategy to build a community. Promote your project on social media, list the benefits of the project, mention the differentiators clearly and collaborate with influencers. Creating hype before the launch can do wonders for a project. Study your competitors and understand what has been working for them to prepare an effective marketing strategy. Allocate sufficient resources and budget for marketing. Focus on PRs advertisement and community building. Take note of what’s working and keep on refining your marketing strategy as per the outcome. Pump your funds into the most beneficial strategies. Communicate with the community and provide regular updates about key project developments.
Security: You might have created a game-changing project, but it is of little use without proper security. The crypto industry has its share of hackers and scammers. According to a report, crypto scammers took a record $14 billion in 2021. You need to take proper security measures to prevent your project from getting misused for scamming users. Make sure that you have a cold storage wallet to store the tokens. Convey this to the users properly so that they can invest in your project without any fear. Also, getting your project audited is a key part of security. Collaborate with a certified auditing firm for the audit of your project. CertiK, Chainsulting, and OpenZeppelin are some of the top auditing companies. An audit is important as it helps in identifying the flaws or loopholes in your system i.e., smart contracts, tokenomics, etc., and also helps in ensuring the safety of your funds.
Token Launch: Token launch is the final stage of launching a project in the crypto space. Tokens represent the stake of investors and stakeholders in the project. It is the token that decides the value of a project. The more use cases, the higher the value. Use the token launch event to hype your project and build a community of supporters and ambassadors. A strong and vibrant community is key to a project’s growth. Take the example of Binance, the biggest crypto exchange globally. Binance issued its BNB token in 2017 and launched it during an Initial Coin Offering crowdfunding event. The initial price of the token was 15 cents per token. At present, BNB is trading above $391. The exponential growth of the token price and Binance’s user base is a testament to the importance of a token for a project. Just a few months after the launch of BNB, Binance became hugely popular. So, what’s stopping you from becoming the next Binance?
Source: https://academy.shrimpy.io/post/the-best-smart-contract-platforms
Final Word
The DeFi industry has been gaining momentum over the past couple of years. With businesses searching for more efficient solutions to existing financial institutions to make cross-border trade easier, this is the right time to build your DeFi project and play an active role in the transition towards a decentralized global economy.
Wondering where to start? Let’s Talk!
We have a team of seasoned business experts and professionals with years of experience who have raised over $500 million for more than 100 companies. Working with 100+ companies has helped us figure out the know-how of the industry that we can use to help you raise your dream project. We work with leading exchanges, farms, crypto businesses, and defi protocols, and the total value locked (TVL) for these projects is 800M+. We would love to hear from you. For more info, contact us at hello@zuvomo.com