I've seen hundreds of token projects over the years, and honestly, most of them make the same mistakes. Some are minor annoyances. Others are catastrophic failures that cost projects thousands of dollars or destroy their credibility before they even launch. The frustrating part? Almost all of these mistakes are completely avoidable.
This isn't a theoretical guide. These are real problems I've encountered repeatedly, along with practical solutions that actually work. Whether you're a developer building your first token or a founder working with a development team, understanding these common pitfalls will save you time, money, and headaches.
Let's dive into the seven most common ERC20 token mistakes and, more importantly, how to avoid them.
1. Incorrect Total Supply
This one sounds simple, but you'd be surprised how often it goes wrong. The issue isn't usually the number itself – it's understanding how Solidity handles decimals and token units.
Here's what happens: You want to create 1 million tokens. So you set totalSupply = 1000000 in your constructor. You deploy the contract, check your balance, and see... 0.000000000001 tokens. What happened?
ERC20 tokens use 18 decimal places by default (following Ethereum's wei system). When you set totalSupply = 1000000, you're actually creating 0.000000000001 tokens because the contract interprets that number in the smallest unit. To create 1 million tokens, you need to multiply by 10^18: totalSupply = 1000000 * 10**18.
The Fix: Always multiply your intended supply by 10 raised to the power of your decimals. Most tokens use 18 decimals, so the formula is: actualSupply = intendedSupply * 10**18. Better yet, do this multiplication in your constructor so you can input human-readable numbers during deployment.
Here's a safe pattern:
constructor(uint256 _initialSupply) {
totalSupply = _initialSupply * 10**decimals;
balanceOf[msg.sender] = totalSupply;
}
Now when you deploy with _initialSupply = 1000000, you actually get 1 million tokens. Much better.
Pro tip: Test this on a testnet first. Deploy with a small supply like 100 tokens, add the token to MetaMask, and verify you see the correct amount. This simple check catches the mistake before you deploy to mainnet.
2. Forgetting to Verify Contract
I cannot stress this enough: an unverified contract is a dead contract. Nobody will trust it, nobody will use it, and you'll spend weeks trying to convince people your token isn't a scam.
Contract verification means publishing your source code on the blockchain explorer (Etherscan, Basescan, etc.) so anyone can read it. This proves your contract does what you claim and doesn't have hidden malicious code. It's the difference between "trust me" and "verify yourself."
I've seen projects launch with great marketing, strong communities, and solid tokenomics – then fail because they forgot to verify their contract. Users see "Contract Source Code Not Verified" on Etherscan and immediately assume it's a scam. And honestly, they're right to be suspicious.
The Fix: Verify your contract immediately after deployment. Don't wait. Don't think "I'll do it later." Do it now. The process takes 5-10 minutes and is completely free.
Go to your blockchain explorer, find your contract, click "Verify and Publish," and follow the steps. You'll need:
- The exact compiler version you used
- Your source code
- Constructor arguments (if any)
- Optimization settings
If verification fails, double-check these details. The most common issue is compiler version mismatch – make sure you're selecting the exact version you used in Remix or Hardhat.
Bonus benefit: Verified contracts get better visibility on blockchain explorers and token listing sites. Many platforms won't even list unverified tokens. Verification isn't optional – it's essential.
3. Missing Ownership Controls
Here's a scenario I've seen play out too many times: A project launches their token, everything's going great, then they realize they need to pause transfers due to a security issue. Or they want to add an address to a whitelist. Or they need to update a parameter. And they can't. Because they didn't include ownership controls.
The opposite problem is also common: projects include ownership controls but don't properly secure them. The owner wallet gets compromised, and suddenly someone else controls critical functions of your token. Game over.
The Fix: Use OpenZeppelin's Ownable contract for basic ownership functionality. It's battle-tested, audited, and handles ownership transfers securely. Here's the basic pattern:
import "@openzeppelin/contracts/access/Ownable.sol";
contract MyToken is Ownable {
bool public paused = false;
modifier whenNotPaused() {
require(!paused, "Contract is paused");
_;
}
function pause() external onlyOwner {
paused = true;
}
function unpause() external onlyOwner {
paused = false;
}
function transfer(address to, uint256 amount) public whenNotPaused returns (bool) {
// transfer logic
}
}
But here's the critical part: secure your owner wallet. Use a hardware wallet, not a hot wallet. Better yet, use a multi-sig wallet where multiple people need to approve important actions. And consider implementing a timelock for critical functions, giving your community time to react if something suspicious happens.
Advanced tip: For serious projects, implement role-based access control (RBAC) instead of simple ownership. OpenZeppelin's AccessControl contract lets you define different roles with different permissions. Your marketing team can manage whitelists without having full contract control.
4. No Mint/Burn Functions
This mistake is more subtle. Your token works fine at launch, but six months later you realize you need functionality you didn't include. Maybe you want to implement staking rewards (need minting). Maybe you want to implement deflationary tokenomics (need burning). Maybe you want to reduce supply after a token buyback (need burning). And you can't, because these functions don't exist in your contract.
The problem is that smart contracts are immutable. Once deployed, you can't add new functions. You'd need to deploy a new contract and migrate everyone to the new token – a nightmare scenario that often kills projects.
The Fix: Think ahead about what you might need. Even if you don't plan to use minting or burning initially, including these functions gives you flexibility for the future. You can always choose not to use them, but you can't add them later.
Here's a safe implementation:
function mint(address to, uint256 amount) external onlyOwner {
require(to != address(0), "Cannot mint to zero address");
totalSupply += amount;
balanceOf[to] += amount;
emit Transfer(address(0), to, amount);
}
function burn(uint256 amount) external {
require(balanceOf[msg.sender] >= amount, "Insufficient balance");
balanceOf[msg.sender] -= amount;
totalSupply -= amount;
emit Transfer(msg.sender, address(0), amount);
}
Notice that minting is restricted to the owner (or you could use a separate minter role), while burning is open to anyone – they can only burn their own tokens. This is a safe, flexible pattern.
Important consideration: If you include minting, be transparent about it. Document the maximum supply, minting schedule, and who controls minting. Many investors are wary of tokens with unlimited minting because it can dilute their holdings. Transparency builds trust.
5. Poor Tokenomics
This isn't strictly a coding mistake, but it's so common and so destructive that it deserves a spot on this list. I've seen technically perfect tokens fail because the tokenomics made no sense.
Common tokenomics mistakes include:
- Allocating too much supply to the team (anything over 20% raises red flags)
- No vesting schedules for team tokens (they can dump immediately)
- Unclear utility (why does this token exist?)
- Inflationary spirals (too much minting, not enough burning)
- No liquidity planning (token launches with $500 of liquidity)
The Fix: Design your tokenomics before you write any code. Ask yourself:
- What problem does this token solve?
- Why would someone want to hold it?
- How is supply distributed? (Community, team, treasury, liquidity)
- Are there vesting schedules for team allocations?
- What's the inflation/deflation mechanism?
- How much initial liquidity will you provide?
A good rule of thumb for distribution:
- 40-60% to community (airdrops, rewards, incentives)
- 15-20% to team (with 1-2 year vesting)
- 10-20% to treasury (for future development)
- 10-20% for initial liquidity
These numbers aren't set in stone, but they're a reasonable starting point. The key is transparency – publish your tokenomics clearly and stick to them.
Real example: I worked with a project that allocated 50% of tokens to the team with no vesting. They launched, the team immediately sold their tokens, price crashed 90%, and the project died within a week. Don't be that project.
Using a reliable token creation platform can help you implement proper tokenomics from the start, with built-in vesting and distribution mechanisms.
6. Wrong Network Configuration
This one is painful because it's so easy to avoid, yet I still see it regularly. You spend hours setting up your token, carefully test everything, deploy to mainnet, and then realize... you deployed to the wrong network. Your Ethereum token is actually on Binance Smart Chain. Or you meant to deploy to Optimism but deployed to Arbitrum.
The worst part? You can't undo it. That deployment cost you real money in gas fees, and now you have a useless contract on the wrong network. You have to deploy again on the correct network, paying gas fees twice.
The Fix: Triple-check your network before deploying. Here's a checklist:
-
Check MetaMask: Look at the network name at the top of your MetaMask extension. It should say exactly the network you intend to deploy to.
-
Verify Chain ID: Different networks have different chain IDs. Ethereum mainnet is 1, Optimism is 10, Base is 8453. Check that your wallet shows the correct chain ID.
-
Check Block Explorer: Before deploying, visit the block explorer for your intended network. Make sure the URL matches what you expect (etherscan.io for Ethereum, basescan.org for Base, etc.).
-
Test on Testnet First: Always deploy to testnet first. If you're targeting Ethereum mainnet, deploy to Sepolia first. For Base, use Base Sepolia. This catches configuration issues before they cost you money.
-
Use Network-Specific RPC URLs: Don't rely on automatic network detection. Manually add your target network to MetaMask with the official RPC URL from the network's documentation.
Pro tip: Create a deployment checklist and follow it every single time. It sounds tedious, but it takes 2 minutes and prevents expensive mistakes. I keep mine in a text file and check off each item before clicking deploy.
If you're using our platform, network selection is built into the interface, reducing the chance of deploying to the wrong chain.
7. Ignoring Gas Efficiency
Gas efficiency might not seem critical when you're deploying on a Layer 2 with cheap fees, but it matters more than you think. Inefficient contracts cost more to deploy and more for users to interact with. This adds up, especially for tokens with frequent transactions.
Common gas-wasting mistakes:
- Using strings instead of bytes32 for fixed-length data
- Not using uint256 (using uint8, uint16, etc. can actually cost more gas)
- Redundant storage reads (reading the same variable multiple times)
- Not using events properly (events are much cheaper than storage)
- Unnecessary require statements
The Fix: Follow gas optimization best practices:
// Bad: Multiple storage reads
function transfer(address to, uint256 amount) public {
require(balanceOf[msg.sender] >= amount);
balanceOf[msg.sender] -= amount;
balanceOf[to] += amount;
}
// Good: Cache storage reads
function transfer(address to, uint256 amount) public {
uint256 senderBalance = balanceOf[msg.sender];
require(senderBalance >= amount);
balanceOf[msg.sender] = senderBalance - amount;
balanceOf[to] += amount;
}
The second version reads from storage once instead of twice, saving gas. For a token with millions of transfers, this adds up to significant savings for your users.
More optimization tips:
- Use uint256 for all integers (it's the native word size for EVM)
- Mark functions as external instead of public when possible
- Use calldata instead of memory for function parameters that aren't modified
- Batch operations when possible (one transaction instead of multiple)
- Consider using OpenZeppelin's ERC20 implementation – it's already optimized
Testing gas costs: In Remix, after deploying to a testnet, you can see gas costs for each function call. Compare different implementations and choose the most efficient one. Even small optimizations matter when multiplied by thousands of transactions.
The token builder we've developed includes gas-optimized templates that follow these best practices, so you don't have to worry about optimization yourself.
Bonus Mistake: Not Testing Thoroughly
I said seven mistakes, but here's a bonus that underlies many of the others: insufficient testing. I've seen developers deploy to mainnet after testing for 10 minutes on testnet. That's not testing – that's hoping.
Proper testing means:
- Deploy to testnet and use it for days, not minutes
- Test every function, not just the happy path
- Try to break your contract (what happens with zero amounts? Maximum amounts? Invalid addresses?)
- Have someone else test it (fresh eyes catch issues you miss)
- Test edge cases (what if someone sends ETH directly to the contract?)
- Test integrations (does it work with Uniswap? With wallets?)
Testing checklist:
- ✓ Deploy to testnet
- ✓ Verify contract on testnet explorer
- ✓ Add token to MetaMask
- ✓ Test transfers between addresses
- ✓ Test approve and transferFrom
- ✓ Test with DEX (create a test liquidity pool)
- ✓ Test edge cases (zero amounts, max amounts, etc.)
- ✓ Have someone else test independently
- ✓ Wait at least 24 hours before mainnet deployment
That last point is important. Sleep on it. Come back the next day with fresh eyes. You'll often spot issues you missed in the excitement of initial testing.
Learning from Others' Mistakes
The beautiful thing about blockchain is that all mistakes are public and permanent. You can learn from others' failures without making them yourself. Before deploying your token, spend time on blockchain explorers looking at both successful and failed token projects.
Look at verified contracts of popular tokens. See how they handle common scenarios. Notice patterns in successful projects. Also look at failed projects – many have post-mortems explaining what went wrong.
Some resources for learning:
- OpenZeppelin's contract library (battle-tested implementations)
- Etherscan's verified contracts (real-world examples)
- Blockchain security blogs (learn about vulnerabilities)
- Token project post-mortems (learn from failures)
The crypto space moves fast, but the fundamentals of good smart contract development don't change. Careful planning, thorough testing, and learning from others will put you ahead of 90% of token projects.
Moving Forward
Creating an ERC20 token isn't rocket science, but it does require attention to detail. The mistakes we've covered – incorrect supply, unverified contracts, missing controls, poor tokenomics, wrong networks, gas inefficiency, and insufficient testing – account for the majority of token project failures.
The good news? They're all avoidable. With proper planning, careful implementation, and thorough testing, you can launch a token that works correctly, earns trust, and serves its intended purpose.
Remember that your token is just the beginning. The smart contract is the foundation, but success requires community building, clear communication, ongoing development, and delivering real value. A technically perfect token with no purpose or community will fail. A token with minor technical imperfections but strong community and clear utility can succeed.
Focus on both the technical and non-technical aspects. Make sure your code is solid, but also make sure you're building something people actually want and need.
Ready to Create Your Token the Right Way?
If you've made it this far, you understand the common pitfalls in token creation and how to avoid them. But understanding and implementing are two different things. Writing secure, efficient smart contracts takes time and expertise.
That's where our ERC20 token generator comes in. We've built a platform that handles all the technical complexity while following ERC20 best practices. Our templates are gas-optimized, thoroughly tested, and include all the features you need – minting, burning, ownership controls, and more.
Whether you're deploying to Ethereum, Optimism, or Base, our platform makes token creation straightforward and error-free. No coding required, no common mistakes, just a professional token deployed in minutes. Visit www.erc20tokencreator.net today and create your token the right way from the start.