SOL Rises As Solana Launches Advanced SPL Token Upgrade

Solana (SOL) continues to impress following the Solana Foundation’s release of 13 new SPL token extensions that enhance the capabilities of tokens issued on Solana, as per an announcement yesterday, 24 January 2024.

SPL extensions

Token programmability has landed on the Solana blockchain following the release of SPL token extensions. As commercial and institutional interest in Solana grows, this timely rollout is yet another sign that the Web3 firm has a big year ahead.

The newly released SPL token extensions are a new feature aimed at developers, enterprises, and financial institutions. It gives them greater flexibility and control over their tokens. In short, token extensions let developers hardcode new features into their assets that were previously only available when using smart contracts.

Programmable tokens

Token extensions let the user create bespoke tokens with features such as automatic transfer fees, transfer confidentiality, and blacklisting/whitelisting, with a comprehensive suite of solutions that give development teams a ready-to-use set of tools that meet “business compliance needs.”

Amira Valliani, head of policy at the Solana Foundation, commented: “A growing number of enterprises are interested in the benefits of blockchain, but want to ensure that they can adopt the technology in a responsible way that adheres to their internal compliance processes.”

According to Valliani, token extensions simplify these processes by “streamlining compliance obligations” instead of devoting resources to creating and customizing smart contracts that they can leverage within their compliance frameworks.

Furthermore, as the the official release, token extensions were created to with stablecoin, real-world assets (RWA), and payment systems in mind.

For example, the ‘Transfer Fees’ extension allows for businesses to set fees for token transfers, which can establish different revenue models depending on the type of token built.

‘Transfer Hooks’ lets token issuers create and control how users and tokens interact, allowing developers to add functionality at point of transfer, opening up new opportunities for innovative token mechanisms.

A notable standout for stablecoins, securities tokens, RWAs, and credentials, was the ‘Permanent Delegate Authority’, which gives issuers control over their tokens, including the capacity to transfer or destroy them.

Institutional interest rises

Head of payments at the Solana Foundation, Sheraz Sphere, noted that major firms such as “Visa, Worldpay, Stripe, Google, and Shopify” have relished in the numerous performance benefits already available on Solana. Now, however, greater institutional and enterprise adoption is to follow as token extensions natively enable features “that matter to large regulated enterprises.”

This is especially true given that following the addition of stablecoin USD Coin (USDC), Visa deployed a stablecoin settlement pilot on Solana to leverage the network’s low costs and high transaction speeds, especially in the realms of cross-border payments and stablecoin-accepting merchants.

As we have previously reported, stablecoin usage is increasing on Solana, and with the introduction of the highly regulated Pax Dollar (USDP) stablecoin on to the network, this figure will likely continue to rise.

SOL price

The overall crypto market has continued to shed billions of dollars from its market cap following the hotly-anticipated spot Bitcoin (BTC) exchange-traded fund (ETF) decision on 11 January 2024.

Following the token extension release, the SOL token was trading positively with some modest gains over the last 24 hours. Presently, SOL is sitting at a price of $87.18 up from around $85 in the past day.

Although modest, price appreciation of any kind during the current market conditions is worth paying attention to.