I'm new to the Ethereum ecosystem and I was hoping to get something clarified. I have an idea for Dapp that I wish to build. I am now trying to understand whether I should be creating a new ERC20 token or if I should just be accepting payments in ether.

I've encountered several articles such as this one that say that not all applications should need their own token.

To my knowledge ICOs seem like a neat way to raise capital and define the economic model for a token that will fuel your platform. But, what exactly constitutes a platform? Is something like SALT Lending that just requires users to hold the token for membership or for paying for services a platform? To me, SALT sounds like a product rather than a platform. Thus, I feel like they could easily accept payments in Ether and call it a day.

However, I do also see the upside towards ICOs. I see it mainly in the form of monetary incentives. Early investors and founders have the potential to cash out big if they invest in tokens that end up creating huge demand. But, at the cost that you need a new token for every product/platform. I've also noticed from this question that staking tokens like Omisego should be their own token, but don't quite understand what why that is the case.

So, my question is - If I am creating a Dapp that I could potentially see being as an established live application with millions of users, should I be creating an ERC20 token or should I be accepting payments in Ether? When is it recommended to create your own token?

1 Answer 1


When is it recommended to create your own token?

When you:

  • are starting crowdfunding campaign because you need to develop/create your product/service in which other people believe/want
  • want to create your own economy ontop of your platform
  • want to create a company where shares are splitted by token holders and you can look for a new investment just by selling a part of your coins, meaning that you are giving a person not only a token, but a share

Now let's talk about the downside.

millions of users

This is not a good idea. If you will have your token, which will be constantly transfered through your website/application by millions of users this will cause an overload of the blockchain and transactions will get very slow and very expensive.

Summarizing, just accepting Ether as a type of payments sound way more realistic, atleast while we don't have new hard fork which will increase performance and efficiency of the blockchain in an order of magnitude.

There were many ideas about this.

Some sell their token so the holders can exchange their token for some product/service in the future.

Some sell their token so investors in the future can get a share of a profit.

Some use their token on their platform just in order to motivate people to do something; like, share, comment etc.

This question is for reddit, because it is just to broad.

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