Best practice for your DApp launch or DEX listing
Any person can create a smart contract and get a public blockchain like High Performance Blockchain to serve its code. This capability is liberating, but it can also create risks for users. Mistakes happen, and even a well-coded project can have unscrupulous founders who intentionally defraud users. So, this article aims to help you to spot and adopt best practice when it comes to launching a decentralized application (DApp) or listing your token on a decentralised exchange (DEX).
Firstly, note that when you use a smart contract to mint tokens on High Performance Blockchain (HPB), you are creating HRC20 tokens, which can be transacted between HPB wallets. You won’t need permission to add your HRC20 token as part of a trading pair on a compatible DEX. However, for maximum visibility, you’ll want to see your token on the default list of trading pairs on the DEX. For this you’ll need the list manager’s blessing and building trust in your project will help with this.
Here are some tips to get started:
Use a battle tested token contract you can be sure will not be vulnerable to the unauthorised minting of tokens, theft or other attack vectors. The OpenZeppelin library is well respected.
Verify your smart contracts on the chain's block explorer before your DApp’s launch, so all parties know the code deployed on-chain is the same code you’ve made public. Unless there are very good reasons to avoid full disclosure of code, verify it.
Friendly developers in a community may well assist with testing and alert you to any issues they find in your DApp’s smart contract code. To encourage this spirit of collaboration, you can provide:
- well-commented code
- correctly attributed code
- documentation on GitHub
- adequate test suite
If you have borrowed code from an open source project, use Diffchecker to highlight any changes. Give original writers the credit they deserve. Choose the correct licence, and add it to the source code on your GitHub or on the block explorer.
DApp project builders are responsible for earning the trust of users. A more transparent project may attract:
- better reception by developers
- applause for supporting the open source ethos
- greater trust in the project brand
- listings on supportive exchanges
A blockchain's Foundation is responsible for maintaining the network security, low cost and uptime. Let them focus on that, whilst you focus on building trust in your DApp:
- walking your talk
- thought leadership
- meaningful partnerships
In short, post regular development updates before, during and after launch. Hit your roadmap milestones. Write articles about your niche to demonstrate your expertise. Build relationships so other more established brands are happy to support, share or endorse your project, token or service.
As a project manager, note that users may tolerate the redeployment of a specific smart contract to fix a bug, but they won’t be happy if asked to do a token swap to resolve an issue. Ensure your token contract code is tried and tested and separate by design.
Budget for this where appropriate. Some smart contracts manage huge dollar value. Give your holders and users confidence by having a third-party auditor check your code and confirm it is safe.
When creating support for an initial pair on a DEX there are various ways you can give investors greater confidence that you have their interests at heart:
- 1.Burn the LP tokensWhen a project sets up an initial pair on a DEX with ample liquidity and trading begins, if the founder’s LP tokens have already been sent to a burn address, a rug pull by founders is impossible.
- 2.Lock the LP TokensSend the founder’s LP tokens for the initial pair to a smart contract that locks them for a time (eg. 2 years). In this case the project founders can still profit once the project has matured and shown its worth.
- 3.Spread the tokens wideIf hundreds of people are providing liquidity to a pair, this will prove more resilient to early selling.
- 4.Provide extra rewards for LPsSet aside an allocation of tokens for a 'farm' to grant additional rewards to liquidity providers.
In particular, ensure that you raise adequate funds to put a well-supported trading pair on a DEX. If insufficient initial liquidity is provided, or if a founder removes liquidity suddenly, this can lead to a plunge in the token price - commonly referred to as a 'rug pull'. A project that cares about its token holders won't allow an upset like this.
Note that spreading out the initial token supply is important for sustainability and decentralisation. To spread ownership, provide bounties and events that reward contributors with tokens, or put some tokens under community governance.
Every DEX rewards liquidity providers (LPs) with LP tokens to incentivise them to add tokens to both sides of a trading pair, thus enabling more trading. To make it more attractive for LPs to leave their funds in a pool, a project can provide extra rewards for LPs through a 'farming' offer, whereby LPs receive more of the project’s token as rewards.
Other mechanisms can also be used to make it more attractive to buy and hold a project token. With 'reflection' tokens, for example, movements of a token between wallets are taxed and the collected tax is redistributed between holders.
When deciding which DEX to use, consider whether it has received any support from a blockchain’s Foundation. Check which DEX has the highest daily trading volume and the most total value locked. Look at how the DEX is doing for users and community, and check whether it requires projects to satisfy any particular standards to be included on the DEX’s internal list of trading pairs.
This is not a comprehensive guide of ways to better present and list your project. If you have other suggestions, please join the HPB Global Telegram and share your thoughts.