SPL Token Decimals and Supply: Complete Guide

What Are Token Decimals?

Token decimals define the smallest unit of your token and how it's displayed to users. Solana tokens can have between 0 and 9 decimal places. The decimal setting determines the precision of token amounts and how they appear in wallets and applications.

For example, if you set 9 decimals and create 1,000,000 tokens, the actual supply stored on-chain is 1,000,000,000,000,000 (1,000,000 × 10^9). Wallets and applications divide this by 10^9 to display 1,000,000 tokens to users.

Choosing the Right Decimal Count

The decimal count you choose depends on your token's use case. Most utility tokens use 9 decimals to match SOL's precision and ensure compatibility with DeFi protocols. Stablecoins often use 6 decimals for cleaner display, while governance tokens might use 0 decimals if they represent voting rights.

Considerations for Decimal Selection

• DeFi Compatibility: Most DeFi protocols expect 9 decimals. Using a different count may require additional conversions.
• User Experience: Too many decimals can confuse users, while too few limit transaction precision.
• Token Purpose: Consider whether your token needs fractional units or represents whole items only.
• Display Clarity: Balance between precision and readability in wallet displays.

Understanding Token Supply

Token supply refers to the total number of tokens that exist or can exist. When creating a token, you specify an initial supply that's minted immediately. Whether this supply can increase depends on your mint authority configuration.

Fixed Supply Tokens

Fixed supply tokens have a maximum supply that cannot be increased. This is achieved by revoking mint authority after the initial mint. Fixed supply is common for utility tokens, memecoins, and tokens designed to be deflationary or have scarcity value. Learn how to remove mint authority to create fixed supply tokens.

Benefits of fixed supply include predictability, trust (no surprise inflation), and potential value appreciation through scarcity. Most successful tokens use fixed supply to build community confidence. Learn more about tokenomics design for fixed supply tokens. Understanding token authorities is essential for supply management.

Unlimited Supply Tokens

Unlimited supply tokens retain mint authority, allowing new tokens to be created. This is useful for reward tokens, governance tokens with ongoing distribution, or tokens that need flexibility for future needs. However, unlimited supply requires careful management to maintain trust.

If you retain mint authority, consider implementing transparent minting policies, vesting schedules, or governance mechanisms to control future supply increases. See our authority guide for managing mint authority.

Calculating Token Supply

When setting your initial supply, remember that the on-chain amount is multiplied by 10^decimals. For example, to create 1 million tokens with 9 decimals, you'd specify 1,000,000,000,000,000 as the raw supply amount.

Supply and Tokenomics

Your token's supply directly impacts its economics. Large supplies with low prices can create psychological barriers, while small supplies with high prices may limit accessibility. Consider your target market, use case, and distribution strategy when determining supply. Our tokenomics guide covers supply planning in detail.

Common Supply Ranges

• Memecoins: Often use very large supplies (billions or trillions) with low per-token prices
• Utility Tokens: Typically use millions to billions of tokens depending on use case
• Governance Tokens: Often use smaller supplies (millions) to create scarcity and value
• Stablecoins: Supply varies based on backing and demand

Best Practices