Here is how I do my grenades :
(disclaimer : they are small grenades that don't blow up your opponent's eardrums, piss them off and/or send shockwave thru the field. They are ideal for playing inside and are somewhat OK for outside. I don't like overpowered grenades.)
1. Take a ketchup paper cup (like at McDonald but slightly bigger, about 4cm wide at the largest opening)
2. Pierce a hole at the bottom.
3. Put a firecracker in the paper cup and insert fuse thru the hole (I use "Little Dynamites" firecrackers, modified mini-airbombs are also good. Avoid "Pyro Boy" because they have a lot of duds).
4. Fill paper cup with dried peas (or used BBs)
5. Put a strip of large masking tape over opening. Tighten but not too much (peas will fly out otherwise)
6. Put another strip of masking tape over opening, this time make it as tight as possible.
Warning : do not surround the whole paper cup with masking tape as I doubt the firecracker will be powerful enough to blow it up properly if it's too strong.
7. Light fuse, throw while yelling grenade!
You get a spread that varies from 4 to 12 feet in radius (depends alot on the position the grenade falls : upside down, sideways, etc...).
Other types of grenades can (and will) be more efficient but this one costs 30-35 cents per grenade. That's hard to beat. I always have 40-50 for my indoor games and have a blast (literally).