How to Create a Token-2022 on Solana — Extensions Guide

Token-2022 is Solana's next-generation token program. It does everything the original SPL Token Program does — mint tokens, transfer them, set authorities — but adds powerful built-in features called Token Extensions. Transfer fees, soulbound (non-transferable) tokens, embedded metadata, and more — all at the protocol level, no external programs needed.

This guide covers what Token Extensions are, how each one works, and how to create a Token-2022 step by step using sØl's Token-2022 Creator. No coding, no CLI — just a visual tool and your wallet.

What Are Token Extensions?

Token Extensions are features baked directly into the Token-2022 program. Unlike the original SPL Token Program, where advanced features require separate programs and workarounds, Token-2022 handles everything natively. This means better security, lower costs, and simpler architecture.

There are four user-configurable extensions available in sØl's Token-2022 Creator, plus one that is always enabled:

1. Transfer Fee

The transfer fee extension collects a percentage of every token transfer automatically. You set two parameters:

• Fee rate — in basis points (100 basis points = 1%). Range: 0 to 10,000 (0% to 100%).
• Maximum fee — an optional cap on the fee per transfer. Set to 0 for no cap.

When someone transfers 1,000 tokens with a 2% fee, the recipient gets 980 tokens and 20 tokens are withheld in the recipient's account. The token creator (or designated authority) can collect these withheld fees later using the Token Manager.

Use cases: protocol revenue on every trade, automatic creator royalties, transaction taxes, or fee-sharing with stakers.

2. Non-Transferable (Soulbound)

Soulbound tokens are permanently bound to the wallet that receives them. Once minted to an address, the tokens cannot be transferred, sold, or traded — ever. The holder can only burn them.

Use cases: certifications and credentials (proof of course completion, audit badges), membership tokens (DAO voting rights tied to identity), reputation scores, event attendance proofs, or KYC verification tokens.

Important: soulbound tokens cannot have transfer fees (fees require transfers) or be default frozen (both restrict movement, which is redundant).

3. Mint Close Authority

This extension allows the mint authority to close the mint account and reclaim the rent deposit when the total supply reaches zero. Without this extension, mint accounts exist forever on-chain, even if the token is abandoned.

Use cases: temporary event tokens (close after the event), experimental or test tokens (clean up after testing), or any token with a planned end-of-life.

4. Default Frozen

When enabled, every new token account starts in a frozen state. Holders cannot send or receive tokens until the freeze authority explicitly thaws their account. This creates a whitelist-like system at the protocol level.

Use cases: regulated securities (only approved investors can hold), KYC-required tokens (thaw after identity verification), controlled distributions (thaw when conditions are met).

Warning: default frozen requires freeze authority to be enabled. If you enable default frozen and then revoke freeze authority, all accounts stay frozen permanently — no one can ever transfer.

5. MetadataPointer (Always Enabled)

Unlike SPL tokens which store metadata in a separate Metaplex account, Token-2022 embeds metadata directly in the mint account. Name, symbol, description, and logo URI are stored on-chain without needing Metaplex. This is simpler, cheaper (no Metaplex protocol fee), and everything lives at a single address.

Extension Compatibility Rules

Not all extensions can be combined. The tool enforces these rules automatically, but here is what to know:

How to Create a Token-2022 (Step by Step)

Here is how to create a Token-2022 using sØl's Token-2022 Creator. The process takes about three minutes and costs approximately 0.155 SOL.

Step 1: Token Details

Same as creating a standard SPL token — fill in name, symbol, decimals, upload a logo (auto-uploaded to IPFS via Pinata), and add an optional description. The difference is where this metadata ends up: it gets embedded directly in the mint account instead of a separate Metaplex account.

Step 2: Extensions & Configuration

This is the step that makes Token-2022 different. You choose which extensions to enable and configure their parameters:

• Transfer Fee — toggle on, set fee percentage and optional cap.
• Non-Transferable — toggle on for soulbound tokens. Cannot combine with transfer fee.
• Mint Close Authority — toggle on if you want to reclaim rent later.
• Default Frozen — toggle on for KYC/whitelist mode. Requires freeze authority.

You also set the initial supply and authority options (mint authority, freeze authority, update authority) — same as SPL tokens. The trust score shows how your choices affect token safety perception.

Step 3: Review & Create

Review everything — extensions, authorities, supply, and cost breakdown. Then approve the transaction in your wallet. Everything happens in a single transaction: the mint account is created, extensions are initialized, metadata is embedded, initial supply is minted, and authorities are set or revoked.

How Much Does a Token-2022 Cost?

• Platform fee: 0.15 SOL
• Solana rent: ~0.003-0.005 SOL (varies by extensions and metadata size)
• Metaplex fee: none (metadata is embedded, no Metaplex involved)
• Total: approximately 0.155 SOL

Token-2022 costs slightly more than a standard SPL token (0.155 vs 0.12 SOL) because of the higher platform fee. However, you save the 0.01 SOL Metaplex protocol fee and get features that would otherwise require building custom programs.

Token-2022 vs SPL — When to Use Which?

Use a standard SPL token if you want maximum compatibility. Every wallet, DEX, and tool supports SPL tokens. This is the right choice for meme coins, community tokens, and any fungible token that does not need built-in fees or transfer restrictions.

Use Token-2022 if you need protocol-level features: automatic transfer fees for revenue, soulbound tokens for credentials, default frozen accounts for compliance, or mint close for cleanup. These features are impossible with standard SPL tokens.

For a detailed comparison, see our guide: SPL Token vs Token-2022 — What's the Difference?

Collecting Transfer Fees

If you enable transfer fees, the withheld fees accumulate in each recipient's token account. They are not sent to your wallet automatically — you need to collect them. Use the Token Manager to harvest withheld fees across all holder accounts in a single operation.

The withdraw withheld authority (set during creation) is the only wallet that can collect these fees. If you transfer or revoke this authority, fees become uncollectable — so manage it carefully.

Common Mistakes

• Enabling default frozen without a plan — if you freeze all accounts and then revoke freeze authority, every holder is permanently frozen. Only enable this if you have a process for thawing approved users.
• Minting soulbound tokens to your own wallet — if you mint non-transferable tokens with initial supply, those tokens are stuck in your wallet forever. You cannot transfer them to holders. Instead, mint supply to 0 and airdrop later using the Bulk Sender.
• Setting transfer fee too high — 10,000 basis points = 100% fee. The recipient gets nothing. Most protocols use 1-5% (100-500 basis points).
• Forgetting extensions are permanent — you cannot add transfer fees after creation. Plan your tokenomics before you create.
• Revoking mint authority with zero supply — same as SPL tokens: no tokens will ever exist. Always mint your initial supply before revoking.

Frequently Asked Questions

Ready to Create a Token-2022?

You now know what each extension does, how to configure them, and what pitfalls to avoid. Time to build.