Everything You Need To Know About The SPL Ecosystem

Second only to Ethereum in total value locked (TVL), Solana is a high-performance, layer-1 blockchain known for its fast transaction times and low costs. Notably, Solana also enables developers to create and deploy both tokens and decentralized applications (dApps) through the use of self-executing, programmable code, much in the same way as Ethereum smart contracts. However, what makes Solana different in this regard is its use of the Solana Program Library (SPL) to manage all programs on the network.

But what exactly is the Solana Program Library? How do programs on Solana compare to smart contracts on Ethereum, and how do SPL tokens work? In this article, Ledger Academy breaks down everything you need to know about the SPL ecosystem.

What is the Solana Program Library (SPL)?

In short, the SPL is a collection of programs, detailing how tokens and protocols operate on the Solana blockchain. This library of pre-compiled programs is optimized for use on Solana, providing developers with a roadmap for launching tokens and dApps and ensuring that different elements in the network work together as they should.

The SPL helps developers with a building block approach, providing them with reusable components to use within their applications and allowing them to build network-compatible applications without having to create complex code from scratch.

Programs

Programs are collections of code that can be triggered to execute a specific action through a network transaction. There are two types of programs in the Solana ecosystem – native programs and on-chain programs.

Native programs are the ones responsible for the core functions of the network and are thus a critical part of the Solana blockchain. Native programs help to process transactions, enforce network rules, and create new accounts.

On-chain programs are the ones written by users and deployed onto Solana such as dApps, exchanges, and tokens. You can think of on-chain programs like Ethereum smart contracts, though they have one key difference: whereas Ethereum smart contracts store both programs and their states, Solana uses a stateless program model, storing programs and data in separate ‘accounts’.

Accounts

Accounts are a form of record on the Solana blockchain and they come in two main types. There are executable accounts for holding immutable program code, and non-executable accounts that hold data for programs to use such as a program’s state, variables, and assets. This account data is managed by native programs and maintained by validator nodes in exchange for ‘rent’ fees, which are paid in lamports (the fractional denomination of SOL).

A major benefit of Solana’s stateless program model is that it enables Solana to implement a parallel transaction processing system known as Sealevel Parallel Runtime. This parallel processing makes it possible to process thousands of transactions at the same time, helping the network achieve its famously fast transaction per second (TPS) rates.

The SPL Token Program

The SPL token program is the standard for creating and deploying tokens on the Solana blockchain and is easily the most used on-chain program on the network. Thanks to Solana’s stateless program model and unlike the ERC token standards on Ethereum, the SPL token program is a generic standard that covers both fungible and non-fungible tokens.

SPL tokens have some other features that set them apart from their Ethereum counterparts, including:

• Atomic Transfers: SPL tokens can bundle multiple token operations into one transaction
• Solana’s model means that each holder of a token gets a token account. Compared to Ethereum’s model of logging token balances within a token’s smart contract, this makes tracking and managing tokens on Solana very efficient
• SPL tokens can be set up with customizable mint or freeze functions, giving token issuers a higher degree of control over the token supply
• SPL transactions can be processed at Solana’s native speed of up to 65,000 TPS. These transactions are also very cheap, costing small fractions of a cent, and reach finality within seconds of being processed

Types of SPL Tokens

The fast transaction times and low costs associated with SPL tokens have led to an explosion in growth for the SPL token ecosystem, giving some of the most innovative web3 projects and protocols a home on Solana. 

DeFi

Some of the most common SPL tokens are those tied to decentralized finance (DeFi) platforms on Solana, especially decentralized exchanges (DEXs). Tokens in this category are generally used to aid DeFi functions such as providing liquidity, staking, lending, and borrowing.

Popular DeFi SPL tokens include the native tokens for the DEXs Orca (ORCA), Raydium (RAY), and Jupiter (JUP).

Memecoins

Memecoins are digital tokens whose value and notoriety stem from internet culture, humor, community engagement, and current events. Unlike cryptocurrencies which act as utility tokens for their respective blockchains, memecoins do not have any intrinsic utility. Rather, their value is speculative and determined by their favor among online communities and trends. This makes memecoins an especially volatile type of asset.

Solana’s technical advantages of speed and cost have made it the de facto home for memecoin communities, as tokens can be created, issued, and have an entire cycle of rising then falling prices all within a matter of days or even hours.

Popular memecoins include Bonk (BONK), dogwifhat (WIF), and Popcat (POPCAT).

Read our full Academy article for more on Solana memecoins 

DePin

DePIN stands for Decentralized Physical Infrastructure Network. To sum up, these are networks built on blockchains that use decentralized tools to help maintain physical infrastructure in the real world. DePINs utilize tokens to incentivize and reward their participants, enabling these networks to replace traditionally centralized ones.

Take the DePIN Helium for example. Helium (HNT) allows individuals to deploy and maintain their own internet hotspots, creating a wireless network without needing any centralized infrastructure and at a much lower cost than traditional wireless networks. 

Other notable DePIN projects with SPL tokens include Hivemapper (HONEY), Nosana (NOS), and Grass (GRASS).

Where To Get SPL Tokens

Decentralized Exchanges (DEXs)

Solana DEXs like Jupiter or Raydium allow you to swap SOL for any memecoin listed. While DEXs offer decentralized trading, they require the use of a software wallet like Phantom or Solflare. 

As these wallets are constantly connected to the internet, they are susceptible to malware or other online threats that can target your private keys. Therefore, it’s always recommended that you secure your software wallet with a Ledger device and segregate your assets properly so that you are never buying or trading tokens with the same wallet that you use to store your valuable assets.  

Centralized Exchanges (CEXs)

Some SPL tokens are available for purchase via centralized exchanges such as Coinbase, Binance, and Crypto.com. Although these exchanges make it possible to buy SPL tokens using fiat currency, they have other limitations.

For one thing, CEXs have full authority over the tokens listed on their platforms, meaning that not all SPL tokens will be available. What’s more, buying tokens on a CEX often means using the exchange’s custodial wallet, meaning that the CEX has custody over your SPL tokens. You can of course send your tokens to a self-custody wallet after making your purchase, though this will incur additional fees.

How To Swap SPL Tokens via Ledger Live

Ledger Live is the safest gateway allowing you to trade for SPL tokens, as it provides user-friendly trading while keeping your assets secured by your Ledger device.

Before you begin swapping your SPL tokens, make sure your Ledger device is up to date and has the latest version of the Solana app installed. With your device connected, follow these steps:

1. Open Ledger Live, and select Swap. You can find it on the menu on the left and also at the top of the Portfolio tab.
2. Select the assets that you want to swap—Ledger Live has support for 130+ SPL tokens, including popular coins like USDC, BONK, RAY, JUP, and PENGU.
3. Once you’ve confirmed your assets, choose your preferred swap provider and click on a quote offer to continue.
4. Open the exchange app on your Ledger device to confirm your transaction.

It’s important to always verify transaction details on your Ledger device’s screen before confirming to avoid scams. Of course, thanks to Clear Signing, you can rest assured that what you see on your Ledger device is what you sign.

For more information, check out our guide on accessing your SPL tokens with Ledger.

Ledger Live: The Safest Way to Manage SPL Tokens 

While there are many options for buying and managing SPL tokens, using Ledger Live together with a Ledger device provides the safest environment for exploring the SPL token ecosystem. There are hundreds of SPL tokens available to send, receive, and swap via  Ledger Live from stablecoins, to exchange tokens to memecoins.
If you’ve been waiting to take the leap and begin exploring the SPL ecosystem, now’s the time! Download Ledger Live and experience a seamless Solana experience, backed by the battle-tested, secure self-custody of Ledger.