Solana Launches Token Extensions to Enhance SPL Token Standard
The Solana Foundation has announced the launch of token extensions, a new feature that enhances the functionality and usability of the SPL token standard on the Solana network. Token extensions are a set of programs that allow developers to create tokens with advanced features such as transfer hooks, transfer fees, confidential transfers, and permanent delegate authority.
The SPL token standard is a series of programs that enable the creation and management of tokens on the Solana network, similar to the ERC-20 standard on Ethereum. However, unlike ERC-20, which requires custom logic for each token, the SPL token standard is designed to be modular and composable, allowing developers to reuse existing code and plug in new features as needed.
Token extensions are one such feature that can be plugged into the SPL token standard, adding new capabilities and use cases for tokens on Solana. According to a company statement, token extensions are designed to help businesses transition on-chain and offer streamlined security, compliance, and other services on the Solana network.
Some of the features that token extensions enable are:
- Transfer hooks: A program that is invoked every time a token is transferred, allowing the token issuer to enforce rules and conditions on the transfer, such as KYC/AML checks, whitelists, blacklists, or limits. Transfer hooks can also revoke the transfer if it violates the rules, ensuring compliance and security.
- Transfer fees: A program that deducts a fee from the token balance every time a token is transferred, similar to the royalties that NFTs pay to their creators on the secondary market. Transfer fees can be used to generate revenue for the token issuer, incentivize certain behaviors, or support a cause. Unlike NFT royalties, which can be bypassed by some marketplaces, transfer fees implemented through token extensions are enforced by the network and cannot be avoided.
- Confidential transfers: A program that uses zero-knowledge proofs to hide confidential information during token transfers, such as the amount, the sender, or the receiver. Confidential transfers can enhance the privacy and security of token transactions, especially for sensitive use cases such as stablecoins, securities tokens, or credentials.
- Permanent delegate authority: A program that allows the token issuer to retain control over their tokens, regardless of who holds them. This means that the token issuer can transfer or even destroy the tokens at any time, without the consent of the holder. This feature can be useful for tokens that represent legal or contractual obligations, such as debt, equity, or membership.
“Token extensions build on the characteristics that make Solana the ideal destination for developers,” said Anatoly Yakovenko, co-founder of Solana and CEO of Solana Labs, in a statement. “Solana is the first network to offer this level of integrated developer and user experience in a single token program. We’re already seeing the potential to build using token extensions via deployments from some of the most recognizable names in crypto.”
The Solana Foundation claims that token extensions are easy to use and integrate, requiring minimal changes to the existing SPL token code. Developers can choose which extensions to use for their tokens, and users can interact with them through any wallet or application that supports the SPL token standard.
The Solana network is a high-performance blockchain that aims to provide scalability, speed, and low-cost transactions for decentralized applications. The network claims to have over 1,000 validators, 400 projects, and 13 million transactions per day. The native token of the network, SOL, has seen a surge in price and adoption in recent months, reaching a new all-time high of $260 on November 6, 2021.
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