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Solana is elevating its token functionality, providing developers with enhanced control by implementing customizable token ownership and usage rules.
This development is the result of the Solana (SOL) Foundation’s recent announcement about the activation of “token extensions” on Solana’s SPL token standard, a project that has been in the works for over a year, previously known as Token-2022.
The key objective of these token extensions is to bolster compliance capabilities for entities creating tokens on the Solana network. The Solana Foundation highlights that these extensions enable businesses to embed specific functionalities directly into their tokens. Features such as whitelisting, automatic transaction fees, and confidential transfer mechanisms are now possible, marking a significant upgrade from previous capabilities.
1/ The future of tokenization is now: Introducing token extensions, ready-to-use advanced token functionality on Solana.https://t.co/zNw9qWgvjA
— Solana (@solana) January 24, 2024
Token extensions empower developers to rapidly build customized token experiences & designed to meet business compliance needs.🧵 pic.twitter.com/dHkKoNS28X
Solana’s extensions come in two primary forms: mint and account extensions. The platform has unveiled a variety of mint extensions currently available for use.
These include confidential transfers, which maintain the privacy of transaction amounts between parties, interest-accruing tokens, and transfer hooks. Transfer hooks function by triggering a program to verify the permissibility of a token transfer, with the ability to revoke transfers that do not meet the set criteria. These features represent a selection of the innovative mint extensions now accessible on Solana.
The update is particularly advantageous for stablecoin issuers, as the Solana Foundation noted in a statement. Notable crypto service providers, including Paxos and GMO-Z.com Trust Company, a New York-based issuer of Yen and USD-pegged stablecoins, have already utilized Solana’s new token extensions for their stablecoin operations on the platform.
With this announcement, SOL’s market price has also reacted positively, as the altcoin is up by nearly 6% in the past 24 hours.