What Is An SPL Token? A Complete Guide to Solana’s Token Standard

TL;DR

• SPL tokens are Solana’s native token standard, offering lightning-fast transactions and minimal fees compared to Ethereum’s ERC-20 tokens.
• They come in various types including standard SPL tokens, enhanced SPL Token-2022, Metaplex NFTs, and specialized tokens like stake pool and wrapped tokens.
• Popular SPL tokens include USDC, RAY, SRM, and ORCA, powering DeFi, gaming, and other applications across the Solana ecosystem.
• With Solana’s growing adoption and the introduction of SPL Token-2022’s advanced features, these tokens are positioned to play an increasingly important role in the broader cryptocurrency landscape.
• SPL tokens are Solana’s standard digital assets, offering 400ms transaction speeds and $0.00025 fees compared to Ethereum’s slower, costlier alternatives.

Solana is quickly gaining popularity due to features like fast transactions and low fees. Its scalability provides a strong foundation for crypto projects to build on top of it, attracting developers and investors across the globe to develop and invest. SPL tokens play a crucial role in the Solana ecosystem. SPL stands for Solana Program Library and is a token standard equivalent to ERC-20 in Ethereum. It serves as the backbone for projects being developed on the Solana blockchain and used in games, NFT marketplaces, and the DeFi space. This guide will explain to you what the SPL token is, how it works, the types of SPL tokens, and how to create one for your crypto project. We will also delve into the latest development of the SPL Token 2022 and how you can swap them with other tokens.

What Are SPL Tokens?

SPL tokens (Solana Program Library tokens) are the standard token format on the Solana blockchain, similar to how ERC-20 tokens function on Ethereum. These tokens represent digital assets that can be created, owned, transferred, and integrated into applications built on Solana.

The spl token standard defines a common interface for tokens on Solana, ensuring compatibility across the ecosystem. This standardization allows wallets, exchanges, and applications to seamlessly interact with any spl token without requiring custom integration for each new token.

SPL tokens derive their name from the Solana Program Library, which contains a collection of on-chain programs (Solana’s equivalent of smart contracts) that provide core functionality for the blockchain. The token program within this library establishes the rules and capabilities for creating and managing tokens on Solana.

How SPL Tokens Work on Solana

The Solana Program Library (SPL)

The Solana Program Library is a collection of on-chain programs that provide fundamental functionality for the Solana blockchain. These programs are written in Rust and compiled to BPF (Berkeley Packet Filter) bytecode to run on Solana’s runtime.

The Token Program is one of the most important components of the SPL. It defines the standard interface for creating and managing tokens on Solana, handling operations like:

• Token creation (minting)
• Token transfers between accounts
• Token burning (destruction)
• Account creation for holding tokens
• Authority delegation for token operations

Unlike Ethereum’s smart contracts, which are deployed individually for each token, Solana’s Token Program is a single program that manages all SPL tokens. This approach significantly reduces blockchain bloat and contributes to Solana’s efficiency.

Speed and Low-Cost Transactions

SPL tokens inherit Solana’s impressive performance characteristics:

• Transaction speeds of up to 65,000 transactions per second (TPS)
• Average block time of 400 milliseconds
• Transaction fees averaging less than $0.01

This performance makes SPL tokens ideal for applications requiring high throughput and minimal costs, such as micropayments, gaming, and high-frequency trading. When you swap SPL tokens on decentralized exchanges, the experience feels almost instantaneous compared to other blockchains.

Smart Contracts vs. Token Programs

Solana’s approach to programmable functionality differs from Ethereum’s smart contract model:

• On Ethereum, each token is a separate smart contract with its own code
• On Solana, tokens are managed by the shared Token Program
• Custom functionality for tokens is implemented through separate programs that interact with the Token Program

Types of SPL Tokens

The solana token standard supports various token types to accommodate different use cases within the Solana ecosystem.

Fungible Tokens

Fungible tokens are interchangeable with one another, meaning each token has the same value and properties as any other token of the same type. These are the most common form of SPL tokens and are used for:

• Cryptocurrencies
• Utility tokens
• Governance tokens
• Stablecoins

Examples include USDC on Solana, RAY (Raydium), and SRM (Serum). These tokens can be divided into smaller units, making them suitable for payments and financial applications.

Non-Fungible Tokens

Non-fungible tokens (NFTs) on Solana follow the SPL standard but with unique properties that make each token distinct and non-interchangeable. Solana NFTs have gained popularity due to their low minting and transaction costs compared to Ethereum.

Popular Solana NFT collections include Mad Lads, Courtyard NFT Collection, Good Vibes ClubD, and DMarket NFT Collection. The Metaplex protocol extends the SPL token standard to provide additional functionality specifically for NFTs.

Wrapped Tokens (Cross-Chain Assets on Solana)

Wrapped tokens represent assets from other blockchains on Solana. These tokens are backed 1:1 by the original asset held in custody, allowing users to utilize non-Solana assets within the Solana ecosystem.

Examples include:

• Wrapped SOL (WSOL): A wrapped version of Solana’s native SOL token that conforms to the SPL standard
• Portal-wrapped BTC (WBTC): Bitcoin with Solana.
• Portal-wrapped ETH (wETH): Ethereum can be wrapped and transferred to Solana

Governance Tokens

Governance tokens grant holders voting rights in decentralized autonomous organizations (DAOs) and protocol decisions. On Solana, these tokens follow the SPL standard and often include additional functionality for proposal creation and voting.

Examples include:

• SRM: Governance token for the Serum DEX
• MNGO: Governance token for Mango Markets
• JET: Governance token for Jet Protocol

These tokens allow community members to participate in decision-making processes for protocols built on Solana.

How to Create an SPL Token

Creating an SPL token is relatively straightforward compared to other blockchains, thanks to Solana’s developer tools and simplified token program.

Prerequisites for Creating an SPL Token

Before creating an SPL token, you’ll need:

1. A Solana wallet with SOL for transaction fees
2. Basic understanding of Solana’s architecture
3. Familiarity with command-line tools or development frameworks
4. A clear tokenomics plan (supply, distribution, utility)

Steps to Deploy an SPL Token

1. Set up your development environment:

• Install Solana CLI tools with sh -c “$(curl -sSfL https://release.solana.com/v1.14.17/install)"
• Create a Solana wallet for deployment using solana-keygen new — outfile ~/my-token-keypair.json
• Fund your wallet with SOL for transaction fees

2. Define token parameters:

• Token name and symbol (e.g., “MyToken” and “MTK”)
• Total supply (how many tokens will exist)
• Decimals (typically 9 for SPL tokens)
• Mint authority (account that can create new tokens)
• Freeze authority (optional, can freeze token accounts)

3. Create the token:

spl-token create-token — decimals 9

This command returns your token’s address, which you’ll need for subsequent steps.

4. Create a token account:

spl-token create-account <TOKEN_ADDRESS>

This creates an account that can hold your newly created token.

5. Mint tokens:

spl-token mint <TOKEN_ADDRESS> <AMOUNT> <RECIPIENT_ADDRESS>

This issues your specified amount of tokens to the recipient address.

6. Configure additional features (optional):

• Set up a multisig authority for enhanced security
• Implement token vesting schedules for team allocations
• Add metadata to make your token discoverable in wallets

How SPL Tokens Gain Utility

Creating a token is just the beginning. For an SPL token to gain value and adoption, it needs utility within an ecosystem:

1. Integration with applications: Incorporate your token into DeFi protocols, games, or marketplaces
2. Incentive mechanisms: Use the token to reward users for participation or contribution
3. Governance rights: Grant token holders voting power in protocol decisions
4. Real-world utility: Connect the token to products or services outside the blockchain
5. Liquidity provision: Establish trading pairs on decentralized exchanges like Raydium or Orca

The most successful SPL tokens have clear utility cases that drive demand and create network effects within their ecosystems.

SPL Token-2022: The Future of Solana Tokens

In 2022, Solana introduced an upgraded token standard called SPL Token-2022, which extends the capabilities of the original SPL token standard with new features:

• Transfer fees: Enables tokens to charge a fee on transfers, similar to tax tokens on other chains
• Confidential transfers: Allows for privacy-preserving transactions
• Non-transferable tokens: Creates tokens that cannot be transferred after initial distribution
• Token metadata extension: Stores metadata directly on-chain
• Transfer hooks: Enables custom logic to execute during transfers

These features open up new possibilities for token design and functionality, allowing developers to create more sophisticated token economies on Solana.

The SPL Token-2022 program operates alongside the original Token program, ensuring backward compatibility while providing enhanced capabilities for new tokens.

Popular SPL Tokens and Their Use Cases

The Solana ecosystem hosts numerous successful SPL tokens serving various purposes. Here are some of the most prominent examples:

USDC (Solana) — Stablecoin for Payments & DeFi

USDC on Solana is a stablecoin pegged to the US dollar, issued by Circle. As one of the most widely used stablecoins on Solana, it serves as:

• A medium of exchange for trading pairs
• Collateral in lending protocols
• A stable store of value for users
• A payment method with near-instant settlement

The Solana version of USDC can be bridged from Ethereum and offers significantly faster and cheaper transactions than its Ethereum counterpart. You can easily perform a USDC exchange between different blockchains using cross-chain bridges.

RAY (Raydium) — AMM & Liquidity Provision

RAY is the native token of Raydium, a leading automated market maker (AMM) on Solana. It serves multiple functions:

• Governance voting for protocol changes
• Staking rewards for liquidity providers
• Fee discounts on the platform
• Access to new token launches through AcceleRaytor

Raydium’s integration with Serum’s order book creates a hybrid DEX model that combines AMM liquidity with order book efficiency.

SRM (Serum) — Decentralized Exchange Governance

SRM is the governance and utility token for Serum, a decentralized exchange protocol built on Solana. Key uses include:

• Fee discounts on Serum DEX
• Staking rewards
• Governance voting
• Node validator rewards

Serum’s order book infrastructure powers many Solana DeFi applications, making SRM a central token in the ecosystem.

ORCA — DEX & Yield Farming

ORCA is the native token of the Orca DEX, known for its user-friendly interface and concentrated liquidity pools. The token enables:

• Governance participation
• Fee sharing for stakers
• Incentives for liquidity providers
• Access to exclusive pools

Orca’s “Fair Price Indicator” and simplified trading experience make it popular among new users entering the Solana ecosystem.

GST (STEPN) — GameFi & Move-to-Earn

GST (Green Satoshi Token) is the utility token for STEPN, a move-to-earn application that rewards users for physical activity. The token is used for:

• In-game purchases of NFT sneakers
• Upgrading and repairing NFT items
• Minting new NFTs
• Earning rewards for physical activity

STEPN pioneered the move-to-earn category on Solana and demonstrates how SPL tokens can bridge digital assets with real-world activities.

How to Swap SPL Tokens on Rubic

Swapping SPL tokens is a common operation for Solana users. Rubic is a cross-chain DEX aggregator that supports Solana token swaps with competitive rates. Here’s how to swap SPL tokens using Rubic:

1. Connect your wallet: Link your Solana wallet (Phantom, Solflare, etc.) to Rubic
2. Select tokens: Choose the SPL token you want to swap from and the token you want to receive
3. Review rates: Rubic aggregates rates from multiple DEXes to find the best price
4. Execute the swap: Confirm the transaction in your wallet

Rubic also supports cross-chain swaps, allowing you to exchange SPL tokens for assets on other blockchains like Ethereum or Binance Smart Chain. This makes it a versatile platform for managing a diverse crypto portfolio.

For those looking to perform a Solana swap with minimal slippage, aggregators like Rubic or Jupiter provide the best execution by routing trades through multiple liquidity pools.

SPL Tokens vs. ERC-20 Tokens: Key Differences

While SPL tokens and ERC-20 tokens serve similar purposes as standard token formats for their respective blockchains, they differ in several important ways:

Speed and Scalability

• SPL tokens: Benefit from Solana’s 65,000+ TPS and 400ms block times
• ERC-20 tokens: Limited by Ethereum’s ~15 TPS and ~13 second block times

This performance difference makes SPL tokens more suitable for applications requiring high throughput, such as gaming or high-frequency trading.

Smart Contract Model

• SPL tokens: Managed by a single Token Program that handles all tokens
• ERC-20 tokens: Each token is a separate smart contract with its own code

Solana’s approach reduces blockchain bloat but requires a different development mindset compared to Ethereum.

Gas Fees

• SPL tokens: Transaction fees typically less than $0.01, paid in SOL
• ERC-20 tokens: Gas fees can range from a few dollars to hundreds during network congestion, paid in ETH

The predictably low fees for SPL tokens make microtransactions and frequent interactions economically viable.

Cross-Chain Compatibility

• SPL tokens: Fewer bridges and cross-chain infrastructure compared to Ethereum
• ERC-20 tokens: Extensive bridge infrastructure connecting to most other blockchains

While Solana’s cross-chain capabilities are growing, Ethereum still leads in terms of interoperability with other networks.

The Future of SPL Tokens

The Solana token ecosystem continues to evolve rapidly, with several trends shaping its future:

1. Expanded SPL Token-2022 adoption: More projects will leverage the enhanced features of the new token standard.
2. Increased institutional integration: Financial institutions exploring Solana for its performance characteristics.
3. Cross-chain interoperability: Growing infrastructure for bridging SPL tokens to other blockchains.
4. Real-world asset tokenization: Using SPL tokens to represent traditional assets like real estate or securities.
5. Improved developer tools: Simplified frameworks for creating and managing SPL tokens.

As Solana continues to mature as a blockchain platform, SPL tokens will likely play an increasingly important role in the broader cryptocurrency ecosystem, particularly for applications requiring high performance and low fees.

FAQ

1. What is an SPL token, and how does it work on the Solana blockchain?

An SPL token is a digital asset created using Solana’s token standard. It works through Solana’s Token Program, which manages all token operations like minting, transferring, and burning. SPL tokens inherit Solana’s high speed and low fees, making them ideal for various applications from DeFi to gaming.

2. What are some examples of SPL tokens?

Popular SPL tokens include USDC (stablecoin), RAY (Raydium), SRM (Serum), ORCA (Orca DEX), and GST (STEPN). These tokens serve various purposes from governance to utility within their respective ecosystems on Solana.

3. Can I swap SPL tokens for SOL or other cryptocurrencies?

Yes, you can swap SPL tokens for SOL or other cryptocurrencies using Solana-based decentralized exchanges. Rubic aggregates over 200+ DEXs and 20+ bridges to help you get the best price to SPL tokens for SOL or any other cryptocurrency.

4. What’s the difference between SPL tokens and ERC-20 tokens?

SPL tokens operate on Solana with faster transactions (65,000+ TPS) and lower fees (under $0.01) compared to ERC-20 tokens on Ethereum. SPL tokens use a shared Token Program rather than individual smart contracts, resulting in a more efficient but different development approach.

5. How can I bridge SPL tokens to other networks?

You can bridge SPL tokens to other networks using cross-chain bridges like Wormhole, Allbridge, or Portal. These services lock your tokens on Solana and mint equivalent tokens on the destination chain, allowing for cross-chain interoperability.

6. How are SPL tokens used in DeFi?

SPL tokens power Solana’s DeFi ecosystem through lending platforms (Solend, Mango Markets), decentralized exchanges (Raydium, Orca), yield farming protocols, stablecoin systems, and more. They enable fast, low-cost financial operations that would be prohibitively expensive on other blockchains.

7. Can SPL tokens be used for NFTs and gaming?

Yes, SPL tokens can be used for NFTs and gaming. Solana NFTs follow the SPL standard with metadata extensions, while gaming applications like STEPN use SPL tokens for in-game economies. The low fees and high throughput make Solana particularly suitable for gaming applications.

Conclusion

SPL tokens represent a significant advancement in blockchain token standards, leveraging Solana’s high-performance architecture to enable a new generation of decentralized applications. From stablecoins and DeFi protocols to NFTs and gaming platforms, SPL tokens power a diverse ecosystem that continues to grow in both size and sophistication.

As blockchain technology evolves, the advantages of Solana’s approach — speed, scalability, and cost-efficiency — position SPL tokens as strong contenders in the broader token landscape. The introduction of SPL Token-2022 further expands the capabilities of Solana’s token standard, opening new possibilities for token economics and utility.