How to Develop a Token On Solana Blockchain?

The current rise of blockchain technology has paved the way for new opportunities for businesses, and Solana is leading the revolution. With its remarkable transaction speeds and low fees, Solana has become a favored platform for companies seeking to create their own tokens. But how does this benefit businesses? 

Traditionally, businesses have relied on centralized systems for transactions and loyalty programs. These systems are often slow, expensive, and lack transparency. Solana tokens provide a solution to these problems. By utilizing blockchain technology, businesses can establish secure, transparent, and efficient tokenized ecosystems. This opens up a host of new possibilities, from streamlining supply chains to innovative customer loyalty programs. 

Major companies such as USDC and FTX are already taking advantage of SOL tokens to develop faster, more efficient financial products. Tech companies can gain a competitive edge, enhance customer engagement, and tap into the growing DeFi market by creating their own tokens on Solana. In this blog post, we are going to discuss everything you need to know about developing a Solana token for your business.

Understanding the Solana Blockchain

Solana is a public, open-source blockchain that is specifically designed to host decentralized applications. Unlike traditional blockchains that face difficulties with scalability, Solana can process transactions at an incredibly fast speed and with very low fees. This makes it an attractive option for businesses that want to develop innovative solutions without being hindered by slow processing times and high costs.

Solana’s impact extends beyond just transaction speed. Its innovative architecture enables a wide range of use cases with immense potential for businesses. It can facilitate secure and efficient cryptocurrency exchanges and power the next generation of decentralized finance applications. Moreover, its integration with Web3 technologies means that businesses can explore the sectors of the metaverse and Non-Fungible Tokens to create new avenues for customer engagement and brand loyalty. 

A lot of businesses prefer Solana over Ethereum due to its blazing-fast transaction speeds and lower gas fees, which facilitate efficient tokenized ecosystems.

What is the SOL Token?

The SOL Token is the lifeblood of the Solana blockchain, a rapidly growing platform designed for decentralized applications and smart contracts. Launched in 2020, SOL serves multiple purposes within the Solana ecosystem. Firstly, it acts as the fuel for transactions, powering everything from simple transfers to complex computations within dApps. Similar to Ethereum gas fees, SOL can be used to pay for computational resources needed for smart contract execution.

Secondly, SOL plays a crucial role in securing the Solana network. Users can stake their SOL tokens to become validators responsible for verifying transactions and maintaining the integrity of the blockchain. In order to incentivize participation and contribute to the overall security of the network, validators earn rewards in the form of freshly minted SOL by staking their tokens.

Beyond these core functionalities, SOL opens doors to a variety of DeFi applications built on Solana. Businesses can leverage SOL for decentralized lending and borrowing, facilitating access to capital without relying on traditional financial institutions. For instance, companies like Mango Markets and Solend allow users to borrow and lend crypto using SOL as collateral.

Key Market Takeaways for SOL Token

Solana’s DeFi ecosystem is thriving, with DeFi Llama reporting a TVL of over $4.15 billion locked in its protocols. This signifies a substantial amount of cryptocurrency deposited by businesses and users into DeFi applications built on Solana. 

Source:  DeFi Llama

The growth in TVL suggests businesses are increasingly using Solana for decentralized financial services like lending, borrowing, and trading, drawn to its scalability and speed.

Solana boasts a flourishing developer community, with over 1,000 active projects currently building on the platform. This energetic community is instrumental in creating innovative dApps and functionalities that attract businesses. For instance, Helium, a network for decentralized internet connectivity, recently announced its migration to Solana, citing its faster transaction speeds and lower fees. This high developer activity indicates a bright future for SOL adoption as more business-oriented applications emerge.

Companies are starting to integrate SOL into their operations.  USDC, a leading stablecoin pegged to the US dollar, recently launched on Solana, enabling faster and cheaper settlement for businesses.  Additionally,  e-commerce platforms like Shopify are exploring Solana’s potential for streamlining their payment processes. These real-world use cases demonstrate SOL’s potential to disrupt traditional business practices and foster a more efficient financial landscape.

Why Is Solana Better Than Other Blockchains?

Solana has emerged as a compelling alternative to established blockchain platforms by addressing key challenges faced by businesses. Here’s a closer look at some factors that make it a better choice than other blockchains,

1. Speed and Scalability

Traditional blockchains often struggle with slow transaction times and limited scalability. For instance, Ethereum, a leading blockchain platform, can only process around 15-30 transactions per second. This bottleneck can be a major hurdle for businesses requiring real-time transactions. Solana tackles this problem with a combination of innovations. Proof of Stake ensures efficient transaction validation, while Proof of History streamlines timekeeping within the network. 

This unique approach allows Solana to process thousands of transactions per second significantly faster than many competitors. This superior speed and scalability make Solana a perfect fit for businesses requiring real-time transactions and high throughput, such as DeFi applications or high-frequency trading platforms.

2. Low Transaction Fees

Businesses are cost-conscious, and blockchain transactions can incur hefty fees. On Ethereum, gas fees can fluctuate wildly depending on network congestion, making it difficult for businesses to predict costs accurately. Solana’s architecture minimizes operational costs, leading to significantly lower transaction fees compared to other blockchains. 

For instance, processing a transaction on Solana typically costs a fraction of a cent compared to several dollars or more on Ethereum. This cost advantage allows businesses to build applications that are more accessible to a wider user base and reduces the barrier to entry for new participants within the ecosystem. Lower fees also improve profitability for businesses operating on the Solana blockchain.

3. Thriving Developer Ecosystem

A vibrant developer community is crucial for any blockchain platform’s long-term success. Solana fosters a rapidly growing developer base thanks to its use of Rust, a programming language known for its speed, memory efficiency, and developer-friendliness. This attracts talented developers who can create innovative applications and functionalities tailored to business needs. The expanding developer ecosystem fuels continuous innovation on Solana, ensuring the platform remains at the forefront of blockchain technology. 

Recently, Chainlink, a decentralized oracle network, has integrated with Solana. Chainlink provides secure and reliable off-chain data to Solana-based applications, opening doors for innovative use cases in areas like supply chain management and predictive analytics.

Some Interesting Features of Solana 

Solana goes beyond the standard functionalities of a blockchain token, offering unique features that benefit businesses looking to leverage this technology. Here’s a breakdown of some of its key features:

1. Proof of History

Solana uses Proof of History to overcome the limitations of Proof of Work. Proof of History timestamps events in the network, creating a verifiable record without requiring constant communication between nodes. This improves efficiency and scalability, enabling businesses to develop applications that can handle high transaction volumes.

2. Sealevel Parallel Processing

Traditional blockchains often process smart contracts one at a time, creating bottlenecks. Solana’s Sealevel technology overcomes this by enabling the simultaneous parallel processing of multiple smart contracts. This significantly speeds up transaction processing, making Solana ideal for businesses requiring real-time applications.

3. Byzantine Fault Tolerance with TowerBFT

Solana employs a Byzantine Fault Tolerance system secured by TowerBFT. BFT ensures the network remains operational even if some nodes fail or malfunction. This robust security feature provides businesses with peace of mind, knowing their applications and data are protected from disruptions.

4. Turbine

Solana addresses bandwidth limitations by breaking down data into smaller packets using a turbine blockchain propagation. This allows for faster verification by nodes, benefiting businesses through reduced processing times and latency.

5. Pipeline

Moreover, Solana’s pipelining features further accelerate transaction processing by distributing incoming data across various hardware components within the network. These components simultaneously process data chunks, streamlining the overall validation process. This efficiency translates to faster transaction finalization for businesses using the Solana blockchain.

6. Rust Programming Language

Solana leverages Rust, a modern programming language known for its speed, memory efficiency, and developer-friendliness. Compared to languages used in older blockchains, Rust offers a steeper learning curve, but its benefits outweigh the initial challenge. For businesses, this translates to a larger pool of skilled developers who can develop robust and efficient blockchain applications on Solana.

7. Solana Program Library

The Solana Program Library provides developers with pre-built functionalities and tools for common blockchain tasks. This library streamlines development processes, allowing businesses to build custom applications faster and with less code. This reduces development costs and time-to-market for businesses venturing into the blockchain space.

8. On-Chain Upgrades

Solana also allows the users to implement upgrades directly on-chain. This eliminates the need for hard forks, which can disrupt existing applications. Businesses benefit from a more stable and predictable development environment, minimizing the risk of compatibility issues and downtime during upgrades.

5 Interesting Use Cases of Tokens Build on Solana Blockchain

Solana tokens are revolutionizing the way businesses interact with their customers and operate within their industries. While they can function as traditional currencies, Solana tokens unlock a world of exciting possibilities beyond simple financial transactions. Here are five fascinating use cases that showcase the versatility of Solana tokens:

1. Decentralized Finance

Solana’s high throughput enables the creation of efficient DeFi applications. Tokens that are built on Solana can represent different financial instruments, such as lending and borrowing protocols (Solend, Aave on Solana) or synthetic assets (Synthetix on Solana). These tokens empower users to participate in a global, permissionless financial system, bypassing traditional intermediaries like banks. For businesses, DeFi provides new avenues for fundraising and investment opportunities.

2. Supply Chain Management

 Solana tokens can be used to track the movement of goods throughout a supply chain. By embedding a token within a physical product or its digital representation (NFT), businesses can gain instant visibility into every stage of the supply chain, from production to delivery. This transparency allows for improved efficiency, reduced fraud risks, and enhanced customer trust. Companies like Provenance and Skuchain are already leveraging Solana for their supply chain tracking solutions.

3. Loyalty Programs

Businesses can create custom tokens to reward customer loyalty. These tokens, redeemable for discounts, exclusive products, or other benefits, can be earned through purchases, referrals, or social media engagement. Solana’s low transaction fees make it ideal for implementing micro-rewards programs, incentivizing frequent customer interactions. Airlines like Air France-KLM and hospitality chains like Marriott International are exploring blockchain-based loyalty programs.

4. Ticketing and Event Management

Solana tokens have emerged as a viable option for representing event tickets, and they come with several benefits. Firstly, they are tamper-proof and eliminate the risks of counterfeit tickets. Secondly, these tokens are easily transferable and can be resold on secondary markets transparently and securely. Thirdly, event organizers can integrate smart contracts into tokens to automate processes like ticket distribution and refunds. Companies like GET Protocol and Tixngo are actively building blockchain-based solutions for ticketing.

5. Data Monetization

Solana tokens have the potential to give individuals the power to control and monetize their personal data. Users have the option to share specific data points with businesses or applications in exchange for tokens. These tokens can be used for various purposes, such as purchasing premium services or participating in governance decisions within a platform. This approach gives users more control over their data privacy and creates new revenue streams for businesses seeking valuable data insights. Companies like Ocean Protocol and DORA are at the forefront of data monetization on the blockchain.

Solana Token Development Services at Idea Usher

At Idea Usher, we provide a range of services to help businesses utilize the Solana blockchain. Here’s how we can assist you:

1. SPL Token Development

We can help you create your own custom token on the Solana blockchain using the Solana Program Library. These tokens can represent various assets, such as loyalty points, digital securities, or utility tokens for your decentralized applications. Your SPL tokens can be traded on decentralized exchanges, used within your dApps, or even sold to raise capital for your business.

2. Solana Blockchain Consulting

Unsure if Solana is the right fit for your business? Our consulting services can help. We’ll provide a strategic and technical analysis of the Solana blockchain, evaluating its potential benefits and potential challenges in the context of your specific needs. This analysis will help you in making informed decisions about whether building on Solana is in line with your business objectives.

3. NFT Marketplace Development on Solana

Idea Usher can also help you create your own NFT marketplace on the Solana blockchain. Our development expertise allows you to establish a platform for users to mint, buy, sell, and showcase NFTs. Solana’s fast transaction speeds and low fees make it an ideal platform for building a user-friendly and efficient NFT marketplace.

4. dApp Development on Solana

Decentralized applications hold immense potential for businesses across various industries. We can help you develop custom dApps on the Solana blockchain. Our team has experience creating dApps for a wide range of functionalities, including payments, peer-to-peer lending, token swapping, and more. By leveraging Solana’s scalability and security, we can help you build robust and user-friendly dApps that meet your specific business needs.

5. Defi Development on Solana

Decentralized Finance is revolutionizing the financial landscape. We can help you develop DeFi applications on the Solana blockchain, which can include crypto-lending platforms or peer-to-peer lending protocols. By building on Solana, you can take advantage of its speed and affordability to attract a global audience of lenders and borrowers, ultimately unlocking new growth opportunities for your business.

Benefits of Developing a Solana Token

Let us discuss some of the benefits of developing a token on the Solana blockchain, 

1. Uncompromising Security

Security is paramount for any business dealing with digital assets. Solana prioritizes security through a two-pronged approach. Firstly, it utilizes the Rust programming language, known for its memory safety features that minimize vulnerabilities. Secondly, Solana employs a Byzantine Fault Tolerance algorithm with TowerBFT, ensuring the network remains operational even if some validator nodes malfunction. This robust security infrastructure fosters trust and protects businesses from potential financial losses.

2. Efficient Transaction Processing

Slow transaction speeds and bottlenecks can cripple user experience and hinder business growth. Solana addresses this challenge with its unique design. While some blockchains rely on a “memepool” to hold pending transactions, Solana’s Gulfstream system bypasses this, routing transactions directly to validators. This significantly reduces processing times and ensures smooth transaction flow for businesses operating on the Solana blockchain.

3. Scalability for Future Growth

As a business grows, its blockchain infrastructure must grow with it. Solana’s horizontal scaling approach allows for easy expansion. The Cloudbreak mechanism within Solana enables scalability while securing tokens and ensuring smooth transaction processing. This ensures that businesses can create applications that can handle growing user bases and transaction volumes without sacrificing performance.

6. Faster Transactions with Pocketing

Solana tackles bandwidth limitations through a technique called “pocketing.” By dividing blockchain nodes into smaller regions, Solana enables faster transmission of smaller data packets. This leads to a more efficient and user-friendly experience for businesses and their customers by significantly reducing processing times and minimizing latency issues.

7. Cost-Effective Token Creation

While the exact cost of creating a Solana token can vary depending on functionalities and the chosen development platform, it generally remains cost-effective compared to some other blockchain platforms. This makes Solana a viable option for businesses looking to experiment with blockchain technology or launch new tokenized assets without breaking the bank. The development cost is further optimized by the inherent efficiencies of the Solana protocol.

8. Verified Randomness

Many blockchain applications rely on randomness for functions like fair gambling or generating unique collectibles. Solana provides a verifiable randomness function that ensures fair and unpredictable outcomes. This opens doors for businesses to develop innovative applications in areas like gaming, decentralized marketplaces, and random number generation for security purposes.

9. Integration with Existing Systems

Many businesses already have established infrastructure and systems in place. Solana’s blockchain offers the ability to integrate with these systems using oracles. Oracles serve as a link between external data sources and the blockchain. This connection enables businesses to leverage blockchain technology while seamlessly integrating it with their existing operations.

How do you develop a token on Solana Blockchain from scratch?

While Solana offers numerous advantages for businesses venturing into the world of blockchain tokens, the development process itself can seem complex. Here’s a breakdown of all the steps involved in creating a token on the Solana blockchain, 

1. Define Your Token’s Purpose

The first and foremost step in creating a token is to have a clear and well-defined purpose for it. This purpose will determine the technical specifications and functionalities of your token, such as whether it will be fungible (like currencies) or non-fungible (NFTs) and how it will be divided. 

The purpose of the token will depend on what it is intended to represent, such as a company share (Security Token Offering – STO), a loyalty point in a custom loyalty program (SPL Token), or a governance token in a dApp-built on the Solana Program Library. Having a well-defined purpose will ensure that your token is fit for the intended purpose and meets the necessary technical requirements.

2. Choose a Development Approach

Businesses can choose to build the token entirely from scratch using Solana’s core libraries and programming language (Rust). This approach offers maximum flexibility but requires a high level of technical expertise in blockchain development. 

Alternatively, businesses can leverage pre-built token templates or frameworks like the Solana Token Program to expedite development. Partnering with a blockchain development company for a more comprehensive solution is also an option, especially for businesses lacking internal development resources. The best approach depends on your technical expertise, budget, and desired level of customization.

3. Design the Tokenomics

Tokenomics refers to the economic structure of a token, which includes its total supply, distribution mechanisms, and potential burning mechanisms. A smart contract code defines the total supply of a token. Distribution mechanisms can be an initial coin offering or airdrop. Potential burning mechanisms remove tokens from circulation through deflationary processes. 

Designing tokenomics carefully is fundamental to ensure the long-term sustainability and value of a token within the Solana ecosystem. To achieve this, it is crucial to consult financial experts and consider factors such as token velocity, which refers to how often tokens are used in transactions, and potential staking mechanisms that allow users to lock tokens to earn rewards.

5. Develop the Smart Contract

A smart contract is a program code that controls how your token behaves on the Solana blockchain. It is written in Rust and defines how tokens are created (via mint functions), transferred (via transfer functions), and used within the Solana network. Businesses have two options – either hire blockchain developers with expertise in Rust and Solana development to write the smart contract from scratch or use pre-built smart contract templates that are tailored for specific functionalities like token vesting or escrow. 

It is highly recommended to conduct security audits by reputable firms before deploying the smart contract to minimize vulnerabilities and potential exploits.

6. Deploy Your Token

Once the smart contract is finalized and audited, it needs to be deployed onto the Solana blockchain. This deployment process involves interacting with the Solana network using a Solana node or wallet and paying a one-time transaction fee in SOL, the native token of the Solana blockchain. The specific steps for deployment may vary depending on the chosen development approach (e.g., using command-line tools or developer interfaces) and the complexity of the smart contract.

7. Integrate Your Token (Optional)

Depending on the purpose of your token, you may need to integrate it with other applications or platforms. For instance, if your token represents a digital asset, you might need to integrate it with a decentralized exchange like Serum to facilitate trading. Alternatively, if your token is used for governance within a dApp, you’ll need to integrate it with the dApp’s user interface to allow token holders to participate in voting processes. The integration process will vary based on the specific platforms or applications involved and may require additional development efforts.

Top 5 Tokens Built on Solana Blockchain

Here’s a look at five of the most prominent tokens built on Solana, 

1. Serum (SRM)

A decentralized exchange protocol, Serum facilitates fast, secure, and permissionless trading of digital assets. Its SRM token serves a governance function, allowing holders to vote on platform upgrades and fee structures.

Serum boasts over $1.5 billion in total value locked, according to DeFiLlama, a metric indicating the value of cryptocurrencies deposited within the protocol. This signifies significant user trust and active participation within the Serum ecosystem.

Recently, Serum announced a collaboration with Project Serum to launch a new liquidity mining program, incentivizing users to provide liquidity to the platform’s AMM pools with attractive SRM rewards. This initiative is expected to further boost trading activity on Serum.

2. Solana (SOL)

The native token of the Solana, SOL, is used for transaction fees, network security (through staking), and governance. Businesses looking to build on Solana will need to hold SOL to pay for transaction fees.

Solana currently processes over 50,000 transactions per second, according to Solana Beach, a Solana network monitor. This unmatched speed and scalability position Solana as a leader in high-throughput blockchain technology.

In May 2024, Solana Labs announced a $75 million venture fund dedicated to supporting DeFi, NFTs, and Web3 projects built on the Solana blockchain. 

3. Chainlink (LINK)

A decentralized oracle network, Chainlink provides secure and reliable data feeds to blockchain applications. While LINK is not native to Solana, a wrapped version exists, enabling its integration with Solana-based dApps.

Chainlink oracles are currently integrated with over 1,000 blockchain projects across various platforms, including Solana. This widespread adoption highlights the critical role Chainlink plays in connecting blockchains to real-world data.

Recently, Chainlink announced a partnership with Meta (formerly Facebook) to explore the use of Chainlink oracles for secure and decentralized data solutions within the metaverse. 

4. Raydium (RAY)

An automated market maker built on Solana, Raydium facilitates liquidity for token swaps and decentralized finance protocols. The RAY token incentivizes liquidity providers and allows users to participate in platform governance.

Raydium currently boasts over $1 billion in TVL, according to DeFiLlama, indicating strong user participation and liquidity within its AMM pools. This makes Raydium a key player in Solana’s DeFi ecosystem.

Raydium also announced a strategic partnership with Animoca Brands, a leader in the NFT space. This collaboration paves the way for the integration of NFTs within Raydium’s DeFi offerings, potentially unlocking new use cases for both platforms.

5. Stepn (GMT)

A move-to-earn fitness app, Stepn rewards users with GMT tokens for walking or running outdoors. This unique concept has garnered significant user interest, highlighting the potential of Solana tokens to incentivize real-world behavior.

Since its launch in March 2024, Stepn has garnered over 1 million active users, according to DappRadar, a blockchain analytics platform. This rapid user growth demonstrates the app’s ability to combine fitness with cryptocurrency rewards in a compelling way.

Stepn also announced a partnership with Binance, a major cryptocurrency exchange, to offer GMT token trading. This increased accessibility is expected to further propel user adoption and mainstream awareness for the Stepn app.

Conclusion

Solana’s robust architecture offers a compelling platform for businesses to explore the exciting world of blockchain tokens. From enhanced security features and efficient transaction processing to a thriving developer community and cost-effective development, Solana empowers companies to build innovative applications and unlock new growth opportunities.

While the development process itself requires careful planning and technical expertise, the potential benefits of a well-designed Solana token can be significant. By following the outlined steps and leveraging the resources available within the Solana ecosystem, businesses can create tokens that drive user engagement, streamline operations, and establish a strong presence in the evolving blockchain landscape. 

Looking to Develop a Solana Token?

Idea Usher can help you develop a secure and scalable Solana token. Our team boasts over 1000 hours of combined coding experience in the Solana ecosystem, and we’ll guide you through every step of the process, from defining your token’s purpose to deployment and integration. Let’s unlock new growth opportunities together. Contact Idea Usher today!

FAQs

Q1: Is Solidity used for Solana?

A1: Solana primarily uses Rust for smart contract development, not Solidity. While Solidity is the dominant language for Ethereum smart contracts, Solana opted for Rust due to its focus on speed, memory efficiency, and security. However, recent advancements like Solang, a Solidity compiler, allow some developers to write Solana smart contracts in Solidity, potentially easing the transition for developers familiar with Ethereum. But Rust remains the recommended and dominant language for native Solana development.

Q2: How do I create a Blockchain token?

A2: Creating a blockchain token involves several steps: First, define its purpose and functionalities. Then, choose a blockchain platform like Solana or Ethereum. Next, design the token’s economic structure (supply, distribution) and write smart contracts (coded instructions) to govern the token’s behavior on the chosen blockchain. Finally, deploy the smart contract and potentially integrate your token with other applications or platforms depending on its use case. This is a simplified overview, and the specifics will vary based on the chosen platform and desired token features.

Q3: What is Solana coded in?

A3: Solana programs are primarily written in Rust, a modern programming language known for its speed, memory efficiency, and security features. This focus on Rust helps ensure the stability and performance of the Solana blockchain. However, Solana leverages the versatility of the LLVM compiler infrastructure, allowing some development using C or C++ for specific functionalities. While these other languages have some presence, Rust remains the dominant coding language for building programs on the Solana blockchain.

Q4: Is Solana a blockchain or token?

A4: Solana is actually a blockchain, not a token itself. Blockchains are digital ledgers that record transactions across a network of computers. Think of it as a secure public database. Solana is a specific type of blockchain known for its fast transaction speeds and scalability. In contrast, a token is a digital asset built on top of a blockchain like Solana. These tokens can represent various things, like currencies, loyalty points, or even ownership of digital assets. Solana provides the infrastructure, while tokens represent specific uses or values on that infrastructure.