How to Create a Tax Token on Solana: SPL Token-2022 in 1 minute for 0.1 SOL
If you want to create a Tax Token on Solana, meaning a Token-2022 or Token Extensions on Solana, this post is for you.
We’re going to show you how to create a Tax Token in just 1 minute and without writing a single line of code. Plus, for only 0.1 SOL.
Let’s get straight to the point, but not before covering the basic theory. If you prefer the video version, this is for you:
What a SPL Token-2022 is
Before creating a Token on Solana, we need to be clear on the “SPL Token-2022” concept. SPL stands for “Solana Program Library”, so a SPL Token is a token belonging to the Solana blockchain and built to its standards. It’s the equivalent of ERC-20 tokens.
When we talk about SPL Token-2022, we go a step beyond a regular token. We call them “token extensions”.
These extensions have different functions, but the standout one is hands down the option to add a fee per transaction, which is what’s commonly known as a “Tax Token”, in this case on Solana.
In short, SPL Token-2022 is the term we use to refer to a Tax Token on Solana, that is, a token with a fee per transaction.
Available Solana Token Extensions
SPL Token tokens can be used for different things, but the main use cases worth highlighting are:
- Payment currency
- Contract execution
- Swaps
- Governance
- Equity
These use cases expand a lot thanks to the token extensions. Let’s dig into which ones we can apply on our Token 2022.
Transfer Tax
This extension lets us add a fee every time our token is transferred to another wallet (sales included).
It’s important to keep in mind that this fee belongs to our token, not to Solana, and does not go directly to a wallet we define, like it does on EVM. Here, the tokens stay parked in a “Token Account”. You can easily “withdraw” those tokens with a tool we’ll show you later on.
We can also set the “withdraw authority” and the token authority.
Permanent Delegate
The “Permanent Delegate” extension lets us delegate the authority of our token to any other wallet permanently.
This wallet will have the authority to burn or transfer tokens as it sees fit.
Default Account State
This extension has a fairly specific use case, since it lets us set the default state of the token account when it gets created in a wallet.
This state can be: Uninitialized, Initialized, or Frozen.
The state we usually see on SPL Token is Initialized, and that’s what we’ll get if we don’t touch this extension.
Interest Bearing Rate
The “Interest Bearing Rate” lets us set an interest rate on our token and withdraw that amount with interest whenever we want.
Non-Transferable
As the name of this extension suggests, applying it means our token can’t be transferred to other wallets.
Even so, holders could still burn and close the token account.
How much does it cost to create a Tax Token on Solana
The cost of creating a Token 2022 on Solana is basically zero if you know how to code. If you don’t, you’ll have to pay a developer to do it for you, and the price for this service runs around $100-$200. On top of that, you’ll have to wait for them to finish the job.
In this case we’ll show you a method to do it in just one minute for 0.1 SOL.
Limitations of SPL Token-2022
Having this option available on Solana is great and without a doubt a game changer. But like any new feature on the Blockchain, it needs an adoption phase, and that creates some friction when using it for your project.
The main issue is the indexing of these tokens. Most platforms on Solana haven’t adapted yet to this new tech, so they either don’t show up at all or get flagged as “unknown”.
For example, on Solscan your token will show up as unknown. That doesn’t mean there’s no way to make it work. For instance, $BERN is a SPL Token 2022 and its info has been indexed properly.
Creating a liquidity pool on Raydium or Orca with a Token-2022 requires a specific flow that accounts for the extensions (especially Transfer Tax). There are tools that cover that case: check the guide to create a Token-2022 liquidity pool on Solana.
Worth noting that tech progress moves pretty fast and we can expect full adoption soon.
How to create a Tax Token on Solana: step by step
To create the Token-2022 we use the Solana Tax Token Creator by Smithii, a no-code tool that deploys the SPL Token-2022 with custom extensions in about 1 minute for 0.1 SOL.
- Go to the Solana Tax Token Creator.
- Connect your wallet compatible with Solana (Phantom, Solflare, or another).
- Enter the name of your token
- Set the ticker of your SPL Token-2022
- Pick the decimals for your token (6 decimals is the most common).
- Write the description for your Solana Token
- Upload the image of your token (PNG format)
- Pick the supply
- Add the Fee per transaction and the Max Fee. Also the authority wallets
- Select any other “extension” you want to add to your token
- Click on “Create Token” and confirm the transaction.
Aquí te explicamos cómo crear Pool de Liquidez para tu Token en Solana.
Is it safe to create the Token-2022 with this tool?
We’re a company based in Dubai with thousands of active users every month across our tools. On top of that, even though the tool creates your token, the wallet you use will hold the authority over the token, so only you have control.
On top of that, the tool never asks for any access to our private key, NFTs, or tokens held inside our wallet. In other words, all your assets stay safe.
FAQ about Tax Tokens on Solana
What’s the difference between a Tax Token and a standard SPL Token?
A standard SPL Token only supports basic functions (mint, transfer, burn). A Tax Token is a SPL Token-2022 with the Transfer Tax extension active: every transfer pays a fee that accumulates in the token account of the token itself. You can withdraw those fees with the withdraw authority you define when creating the token.
Where do the Transfer Tax fees go?
Unlike Tax Tokens on EVM (where the fee goes directly to a receiving wallet), on Solana the fees stay accumulated in a token account of the token itself. The withdraw authority can pull those tokens whenever they want by signing a specific transaction.
Can I combine multiple extensions on the same token?
Yes. The Token-2022 standard allows combining multiple extensions on the same mint, within the limits defined by the protocol. For example, you can activate Transfer Tax + Permanent Delegate + Interest Bearing Rate on the same token. The Smithii tool lets you pick the ones you need during the creation flow.
Is it compatible with Raydium, Orca, and the main DEXs?
Yes. Both Raydium and Orca support tokens with extensions, although the pool creation flow is slightly different from a standard SPL (especially when Transfer Tax is active). The guide to create a Token-2022 pool covers the full flow.
Does the Transfer Tax Max Fee actually do anything specific?
Yes. Max Fee sets a hard cap on the fee any single transfer can charge, no matter what percentage you’ve configured. It keeps fees from getting out of hand on large transfers and preserves the usability of the token for big wallets.
Conclusion
Solana’s SPL Token-2022 are the future and bring real utility to your project. There’s still a long road ahead for them, and being early can make all the difference.
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CEO & Co-Founder at Smithii. Building on Solana since 2021 and sharing playbooks from the trenches. Also founder of Lince after years investing in DeFi.
