In the evolving landscape of cryptocurrency and blockchain technology, enhancing user experience and reducing transaction friction is crucial for token adoption. When creating ERC-20 tokens, many overlook the benefits of implementing advanced features like the permit extension (ERC-2612). This extension allows for gasless approvals, significantly improving the user experience. In this guide, we'll walk you through the process of creating an ERC-20 token with the permit extension.
Why the Permit Extension (ERC-2612) Matters
Imagine a scenario where users want to interact with your token in a decentralized application (dApp), but they're deterred by the need to send separate approval transactions before each token transfer. With the permit extension, you're adding a layer of convenience that can ensure a smoother user experience and potentially increase engagement with your token.
Key benefits of the permit extension include:
- Enabling gasless approvals for token transfers,
- Reducing the number of transactions users need to make,
- Improving overall user experience in dApps,
- Maintaining compatibility with existing ERC-20 infrastructure.
This tutorial will equip you with the knowledge to deploy an ERC-20 token fortified with the permit extension functionality. We'll cover everything from initial setup to implementing the extension, making this guide valuable for developers, entrepreneurs, and blockchain enthusiasts looking to create more user-friendly tokens. Moreover, creating such a token will take as little time as reading this post!
Creating Your ERC-20 Token with Permit Extension (ERC-2612)
We're using the intuitive 20lab.app interface to simplify the creation of our ERC-20 token with the permit extension. This ERC-20 token generator streamlines the process and makes it accessible to those with minimal or no programming experience, while still allowing for the implementation of advanced features like ERC-2612.
The permit extension adds new functions to the standard ERC-20 interface, including:
permitallows a third party to change an account's ERC20 allowance by presenting a message signed by the account.noncesreturns the current nonce for an account. This value must be included whenever a signature is generated for a permit.DOMAIN_SEPARATORreturns the domain separator used in the encoding of the signature for permits, as defined by EIP-712.
By using 20lab.app, you can easily incorporate these advanced features into your token without needing to write complex smart contract code yourself. This approach combines the accessibility of a user-friendly interface with the power of cutting-edge token standards.
In the following steps, we'll guide you through the process of setting up your token with the permit extension, ensuring that you can take full advantage of this powerful feature to enhance your token's functionality and user experience.
Step 1: Choose Token Type and Connect Wallet
First, visit 20lab.app, navigate to the generator page and click on "Create ERC-20 Token". The next step is to connect your Web3 wallet (e.g. MetaMask, Coinbase Wallet or Trust Wallet) to the platform. After successful connection you will automatically see your wallet address in the top right corner.
Make sure you're connected to the right Mainnet blockchain (or a Testnet if you're experimenting). The blockchain depends only on you and your project's needs. On 20lab you will find a huge selection of popular blockchains, so you are free to choose the best one.
Step 2: Add General Token Information
This phase is crucial because it determines the fundamental characteristics of your ERC-20 token with the permit extension. Start by creating a unique and descriptive name for your token, along with a concise and memorable ticker symbol. It's a good idea to do some research to make sure your chosen name and symbol aren't already in use.
Next, determine the total supply of tokens. For example, you might choose a total supply of 100,000,000 tokens to ensure sufficient liquidity while maintaining scarcity.
For the decimal places, decide how divisible you want your token to be. The default for most ERC-20 tokens is 18 decimal places, which mirrors the divisibility of ETH and other major blockchain currencies. This allows for precise transactions and micropayments.
You have the option to specify a unique contract name, which is how your smart contract will be identified on block explorers after verification. This can be the same as your token name or something more technical like "PermitTokenV1".
Another important decision is selecting the wallet to receive the initial supply of tokens and the token owner. The supply recipient will hold all the tokens at launch, which can be your personal wallet or a dedicated project wallet. The token owner will have special permissions to manage owner-restricted functions. While this is often the same as the deployer, it can be a separate address if necessary. For added security, consider using a multi-signature wallet.
These initial settings are the foundation of your token's identity and functionality. Choose thoughtfully, considering your project's future aspirations and potential for expansion. The choices you make now will affect how your token is perceived and used in the future, especially in terms of its interoperability with decentralized applications and its ability to provide a seamless user experience through gasless approvals.
Step 3: Implementing the Permit Extension
This critical step is where your token gains its enhanced functionality through the permit extension (ERC-2612). To implement this feature, navigate to the next section of the generator and look for the "Permit" option at the very bottom of the page.
Step 4: Review and Deploy
Before finalizing your token creation, it's important to carefully review all configured parameters on the "Summary" page. This final review stage acts as an important check, allowing you to catch and correct any potential errors or oversights that could become costly after deployment.
Once you have thoroughly reviewed all the details, click the button to initiate the validation process. This automated check serves as an additional layer of protection, identifying any technical inconsistencies or issues that could compromise the functionality of your token on the blockchain.
Upon successful validation, you may be presented with a deployment modal that allows you to personalize your token's address pattern. This unique feature allows you to add a distinctive touch to your token's blockchain identifier, enhancing its memorability and brand alignment.
Now you're ready for the big moment. Click "Deploy" to begin the process of instantiating your token on your chosen blockchain network. This action will trigger a prompt from your connected wallet requesting transaction confirmation. Upon confirmation, your ERC-20 token will be live on the selected blockchain.
Managing Your ERC-20 Token with Permit Extension (ERC-2612)
After successfully launching your ERC-20 token with the permit extension, the 20lab.app platform provides an intuitive management dashboard. This single control panel offers a comprehensive set of tools to monitor and fine-tune your newly created token.
The core functionality of the dashboard is a comprehensive view of token information. At a glance, you can access critical details such as your token's blockchain address, total supply, token name, ticker symbol and decimal precision. This view ensures that you're always aware of your token's key metrics.
Another important component of the dashboard is the ownership management suite. This feature is essential for maintaining proper token governance. As the creator of the token, you retain initial ownership rights unless you've delegated those rights to another address during the creation process. Within the "Ownable" section, you have the ability to view current permissions, transfer ownership to a new address, or renounce ownership completely.
Also, since the permit extension is included in the token code, we can view it in the permit section of the dashboard. This feature does not provide any owner-restricted functionality, but it's still being shown in the dashboard for demonstration purposes.
To approve tokens using the permit message, you can use the available signing tool as the first option. It requires 2 values, the same as you provide for the classic approve function from the ERC-20 standard:
- Spender: This is the address of the wallet you want to authorize to spend your tokens.
- Amount: Enter the actual amount of tokens you wish to authorize.
Once you've entered this information, click the "Sign" button. Your wallet will ask you to sign the authorization message. You won't be charged for this action because message signing doesn't take place on the blockchain, but only in your wallet.
After signing, you can see that the cryptographic parameters (V, R & S) were obtained from the signature generated in your wallet. Permit function will now make good use of them to initiate token approval for the specified sender and amount.
Keep in mind that any blockchain transaction, including permit, will still incur a small gas fee for the party executing the transaction. The advantage is that token approvals can be bundled with other actions, reducing the total number of transactions required. Permit extension should be automatically detected by external services, such as dApps, to reduce gas fees when interacting with your token.
Once the permit transaction is confirmed, you can check directly in the dashboard if the tokens were successfully approved. Navigate to the "General (ERC-20)" section and find the "Allowance" function. Enter your wallet address in the owner field and the spender address in the second field. The amount you see below should be exactly the same as the amount you approved using the permit extension.
Conclusion
Creating an ERC-20 token with the permit extension (ERC-2612) provides you with enhanced functionality and improved user experience for your token ecosystem. Whether you're building a new DeFi project, a governance token, or any other blockchain-based asset, the ability to enable gasless approvals can be a powerful tool in increasing adoption and usability of your token.
Platforms like 20lab.app have made it easier than ever to create and manage tokens with advanced features like the permit extension, allowing you to focus on the strategic aspects of your project rather than complex technical implementations.
If you have any questions about creating or managing your ERC-20 token, don't hesitate to reach out to us on our Telegram group.
