How to launch a token cross-chain
Step 1: Define Your Token’s Purpose and Requirements
Utility and Goals: you want to first determine what the purpose of your token is in regards to functionality e.g. governance, staking and payment, and which blockchains you wish your token to operate on. E.g. Ethereum, Binance Smart Chain, Polygon etc
Token Standard: choose a compatible token standard, e.g. BEP-20 (BNB chain) or ERC-20 (Ethereum), or you can create a custom standard for cross-chain compatibility
Chains: identify the specific blockchains you want to deploy on, taking into account the chains transaction costs, user bases and consensus mechanisms.
Step 2: Choose a Cross-Chain Mechanism
In order to ensure your token is cross-chain, there needs to be a method to transfer and/or represent such token across various networks. Such mechanisms used to transfer are:
Burn and mint: burn token on source chain and mint equivalent amount on the destination chain
Lock and mint: lock token on source chain and then mint wrapped version (WBTC)
Lock and unlock: lock tokens in liquidity pool on source chain and unlock them from a pool on the destination chain
Native deployment: deploy token natively on each chain with synchronized supply management
A cross-chain interoperability solution in needed to execute this. Options include:
Chainlink CCIP: protocol supporting burn/mint, lock/mint, lock/unlock mechanisms with self-service tools such as the cross-chain token (cct) standard.
Wormhole: tokenbridge used tor seamless token transfers via smart contracts
Hyperlane: warp routes for quick bridge deployment
Multichain: facilitates token bridging with a mint/burn functionality
Step 3: Develop and Deploy the Token Smart Contracts
Write the Contract: Use a framework like Solidity to create your token contract. Ensure it supports cross-chain features (e.g., mint/burn functions) if using burn-and-mint or lock-and-mint.
Deploy on Each Chain: Deploy the contract on every blockchain you’ve chosen. Tools like Hardhat, Foundry, or Remix can help.
For consistency, use the same code and deployment parameters (e.g., salt) across chains if possible.
Test: Deploy on testnets (e.g., Sepolia, Arbitrum Sepolia) first to ensure functionality.
Step 4: Set Up the Cross-Chain Bridge
Select a Bridge Provider: Choose a protocol like Chainlink CCIP, Wormhole, or build your own bridge.
Integrate with Smart Contracts:
For Chainlink CCIP: Use the CCT standard and Token Manager to configure token pools for each chain. Grant mint/burn roles to the bridge contracts.
For Wormhole: Leverage the TokenBridge contract and ensure your token has attestations on target chains.
For Custom Bridges: Develop smart contracts with locking/minting logic and an oracle or relayer system to communicate between chains.
Note:
Liquidity: If using lock/unlock, set up liquidity pools on each chain and incentivize providers if needed.
Step 5: Configure and Secure the System
Permissions: Assign roles (e.g., minter, burner) to the bridge contracts securely.
Rate Limits: Implement limits on minting/burning to mitigate risks (e.g., bridge hacks).
Audits: Have your smart contracts audited by a reputable firm to ensure security.
Testing: Simulate cross-chain transfers on testnets to verify the process works smoothly.
Step 6: Launch and Manage the Token
Mainnet Deployment: Deploy the token and bridge contracts on the mainnets of your chosen blockchains.
Bridge Activation: Enable cross-chain transfers via the bridge interface or dApp.
Monitor: Use explorers (e.g., Chainlink CCIP Explorer) to track transfers and ensure synchronization.
Community: Promote your token and educate users on how to transfer it cross-chain.
Example: Using Chainlink CCIP with CCT Standard
Deploy Token: Use Foundry or Thirdweb to deploy an ERC-20 token on two chains (e.g., Ethereum and Arbitrum).
Set Up CCT: Access the CCIP Token Manager (a web interface) to register your token as a Cross-Chain Token.
Configure Pools: Deploy token pools on each chain and link them to your token contract, granting necessary permissions.
Transfer: Use the CCIP interface to burn tokens on Ethereum and mint them on Arbitrum, testing the flow.
Launch: Deploy on mainnets and provide users with a UI to perform transfers.
Helpful Tools & Resources:
Development: Foundry, Hardhat, OpenZeppelin (for contract templates).
Bridges: Chainlink CCIP, Wormhole, Hyperlane.
UI: Thirdweb dashboard for no-code deployment, or build a custom dApp.
Testing: Testnets like Sepolia, Goerli, or Arbitrum testnets.