Smart contracts are the new paradigm of blockchain-based systems — they are self-executing pieces of code that allow users to transfer value and information in a trustless manner. According to Industry Research, the global smart contracts market size is projected to reach $1460.3 million by 2028.
Because of the rising popularity of blockchain technology, the demand for such development services is higher than ever before. Nevertheless, businesses still lack knowledge on how to estimate cost of deploying smart contracts.
So, let’s dive deeper into the essential question: “How much does it cost to create a smart contract and deploy it successfully?” In this article, we will provide you with a comprehensive guide that considers various factors from development costs to gas fees.
The Step-By-Step Process of Smart Contract Creation and Deployment
If you want your smart contract built on Ethereum’s blockchain technology, then this process requires a developer who knows how the platform works well enough, so they can create something unique while still following its ruleset. Furthermore, a thorough understanding of the whole process helps make a more precise smart contract cost estimate.
Step 1. Define your business idea. This can be done either in-house or with the help of an outside consultant. You should get a good understanding of what problem you’re trying to solve, who your target audience is, how much money they have and how much time they will spend on the smart contracts platform.
Step 2. Next comes creating a token template for your dApp that has all the basic functions needed by users (e.g., transfer tokens from their accounts).
Step 3. Once this is done, compile it into byte code using Solidity Compiler (solc), which outputs one file called “contracts.”
Step 4. You then need to deploy these contracts on Ethereum Testnet where they will be tested before the transfer onto the main Ethereum network where actual funds are involved. At this point, we recommend using Truffle because it provides easy integration with testing frameworks such as Jest or Mocha.
Development Nuances: How Much Does a Smart Contract Cost?
Smart contracts are an essential part of any blockchain development project. They help developers create decentralized applications (dApps) and they also allow users to make transactions without the need for centralized organizations. However, smart contracts aren’t cheap — in fact, they’re often a major cost factor in a dApp’s budget. So, how much does it actually cost to develop a smart contract?
We have put together a detailed list of the most common factors that affect the cost of implementing smart contracts. Hope it will be helpful for you to understand what goes into calculating your budget and to make an informed decision about how much money you should allocate for this project.
The more complex your smart contract is, the more expensive the development is. It takes time and effort for engineers to understand all the needed features, so they can make sure that everything works properly and safely within an ecosystem that has already been built in another language or platform (e.g., Ethereum).
Also, if there are many moving parts involved in any given function—such as transferring funds from one address to another—then you should expect some delays during testing because there may not be enough resources available.
Maintenance and post-delivery services
Maintenance costs depend mostly on the number of changes you want to make to your smart contract. The following factors are also considered:
- How complex is your smart contract? This can vary based on your business needs, but if you have a highly complex smart contract with multiple callbacks, it will be more time and money consuming than the one that doesn’t require all those extra steps and actions. This is where your smart contract development cost may increase several times.
- Does your codebase match industry standards? How well does it work with other popular programming languages? While most developers are aware of best practices when building their own products, there’s no guarantee that all coding standards were followed during development or if they’ve been maintained over time as new features have been added. This could lead to problems down the line when trying to integrate with other systems within an organization, and this will likely add extra costs associated with fixing such issues before launch.
Note: Even if your codebase is in line with industry standards, it may not be very user-friendly. This could mean that it’s difficult to read and understand what certain functions do or how they interact with each other.
The number of people involved in your project
The complexity of your idea forms the team required to implement it. This is why it’s impossible to calculate the exact smart contract development cost before a consultation with the trusted service provider.
The size of the team that is working on your project influences the overall cost as strongly as the technologies applied. By the way, the more people — the more time it will take to complete and the higher chance of mistakes being made.
In addition to this, if you have multiple non-teammates working on your smart contract simultaneously, then this is also likely to increase costs due to their need for additional coordination with each other.
Tool kit and specific technologies
The used tools also play an important role in the estimation of a smart contract development cost. Blockchain technology is changing every day, and this can affect your project’s budget. For example, if you have a large team working on a complex idea with multiple developers using different programming languages, then this will increase the base cost.
If you’re looking for a solution that works with your existing technology stack, it may be more suitable to use one of these two frameworks: Ethereum or Hyperledger Fabric (which is based on Bitcoin). They offer templates for developing applications such as tokens and digital assets.
Here are some examples of technologies and tools required for smart contract creation and deployment:
- Ethereum is a blockchain-based smart contracts platform, which means that it’s a decentralized virtual machine that runs on the Ethereum network. It allows for a peer-to-peer transaction without an intermediary. It also provides smart contracts, which are self-executing computer codes that use blockchain technology to facilitate the exchange of money or assets between parties transparently.
- Truffle is one of the most popular Ethereum development frameworks, which is used by many engineers to create and deploy smart contracts. It provides a suite of tools that can be used during development, testing and deployment phases. Using Truffle, developers can write tests for various functions within their smart contracts using Mocha and Chai; they can also use Solidity-specific test frameworks such as TestRPC or Ganache.
Summing up all the nuances, we can state that the creation process is time and money-consuming enough, so it can’t be cheap. The base cost you can find on the Internet starts at $7000 and reaches $50000. Furthermore, overly complex projects may be estimated even several times higher. By the way, we haven’t taken into account the cost of deploying a smart contract yet. So, let’s proceed to the next paragraph.
What to Consider While Calculating the Cost of Deploying a Smart Contract
The sum users spend for deployment varies from $500 for basic contracts to $5000 for more complex ones. So, answering the question “How much does it cost to deploy a smart contract?”, we have to mention the list of factors that influence the final budget.
Gas fees are paid to the Ethereum network in ether. They are taken from a user’s account when they interact with a smart contract, charging for every operation, transaction, or function call within a smart contract.
When calculating gas costs for your own smart contracts, consider the following questions:
- How many functions does this contract have?
- Can you break up your contract into multiple smaller ones with fewer functions?
- How many transactions will be run at once?
- How long is the execution time of each transaction?
So, how many gas fees will be charged for a transaction? This is determined by the amount of computation required to execute a transaction. The more complex your contract is — the more gas it will need.
Creation of your contract
The base cost for creation of a smart contract, according to the Ethereum’s yellow paper, is about 32000 gas. Nevertheless, the final cost to deploy a smart contract depends on the following:
- Size of the deployed code (in bytes). The size of your smart contract will be proportional to how many lines need to be added, deleted or modified during development or deployment processes.
- Number of transactions going through a single call or event. Each transaction increases bytecode size slightly because there is some metadata associated with every line added, deleted or modified.
Storage is the amount of space your contract takes up on the blockchain. It’s paid for in gas, and that cost is passed on to whoever creates or uses your contract. According to Ethereum’s yellow paper, the smart contract platform charges 20000 gas for 256 bits.
Storage costs are split between two parties: the creator of a contract, who must pay its initial memory size; and anyone who uses it, which includes anyone sending transactions to or reading information from that contract.
When you execute a smart contract, you pay for the execution of each instruction. The gas fee for each instruction is usually expressed in Wei (1 Ether = 1,000,000,000 Wei).
Contract execution costs are paid when calling functions or methods within an existing smart contract. This happens when using external libraries or interacting with other contracts as well (for example, if one or more parties use a peer-to-peer messaging service).
Gas is used for every operation performed on a blockchain network—not only for executing smart contracts, but also for sending transactions and storing data on-chain. As such, it’s important to keep track of your current gas price so that you know how much money is being spent during each interaction with Ethereum’s network.
How to Choose a Service Provider for Smart Contract Development
When developing a smart contract, it’s important to choose the right service vendor that both understands your business needs, knows the required technology and offers appropriate solutions at acceptable prices.
- Make sure that your chosen service provider has experience working with Ethereum-based blockchain networks and understands Solidity (the programming language used by Ethereum).
- Ask them about their security measures: how they store private keys, what they do to prevent phishing attacks, etc.
It’s also a good idea to do some research on the blockchain developer team. Check their websites and LinkedIn profiles to see what other projects they’ve worked on. If possible, speak to someone who has already collaborated with the company and ask about their experience and impression.
Of course, the skill of your future team of developers influences the cost to deploy smart contracts, but it also eliminates potential risks. For example, an Ethereum-based cryptocurrency called CryptoKitties had a bug where users could buy two cats at once — and they did! This caused the entire network to crash due to high demand and insufficient capacity, resulting in over $20 million worth of lost Ether that day ($15 million just from one person).
The cost of implementing smart contracts depends on many factors, but the most important among them is your business needs. One more essential thing to consider is its potential complexity. As a general rule, the more lines of code you have in your smart contract, the higher it costs to create such.
This is because there are many ways for developers to save money on their projects by using existing tools and technologies rather than developing from scratch. For example, if you’re using an open-source tool like Truffle or Remix instead of writing all the code yourself, then that will significantly reduce development and deployment costs at every stage along the way (from initial planning through testing).
Nevertheless, only capable and trustworthy engineers can consider all the peculiarities of your project. Contact Litslink — the top blockchain development company — to accurately estimate your project and implement it with no flaws.