Introduction

Mina natively supports custom tokens (MIP-4). Each account on Mina can correspond to a custom token.

To create a new token, one creates a smart contract, which becomes the manager for the token, and uses that contract to set the rules around how the token can be minted, burned and transferred. The contract may also set a token symbol. Uniqueness is not enforced for token names. Instead the public key of the contract is used to derive the token's unique identifier.

SHOW ME THE CODE

The mina-fungible-token repo's e2e example showcases the entire lifecycle of a token.

After running npm i mina-fungible-token, import the FungibleToken contract and deploy it like so.

const token = new FungibleToken(contract.publicKey)

const deployTx = await Mina.transaction({
  sender: deployer.publicKey,
  fee,
}, () => {
  AccountUpdate.fundNewAccount(deployer.publicKey, 1)
  token.deploy({
    owner: owner.publicKey,
    supply: UInt64.from(10_000_000_000_000),
    symbol: "abc",
    src: "https://github.com/MinaFoundation/mina-fungible-token/blob/main/examples/e2e.eg.ts",
  })
})
await deployTx.prove()
deployTx.sign([deployer.privateKey, contract.privateKey])
await deployTx.send()

Note: this example assumes that contract and deployer are valid key pairs in scope.

How?

How is this custom token mechanism implemented in Mina?

Token Manager

The token manager account is a contract with the following capabilities.

Set a token symbol (also called token name) for its token. Uniqueness is not enforced for token names because the public key of the manager account is used to derive a unique identifier for each token.
Mint new tokens. The zkApp updates an account's balance by adding the newly created tokens to it. You can send minted tokens to any existing account in the network.
Burn tokens (the opposite of minting). Burning tokens deducts the balance of a certain address by the specified amount. A zkApp cannot burn more tokens than the specified account has.
Send tokens between two accounts. Any account can initiate a transfer, and the transfer must be approved by a Token Manager zkApp (see Approval mechanism).

Token Account

Token accounts are like regular accounts, but they hold a balance of a specific custom token instead of MINA. A token account is created from an existing account and is specified by a public key and a token id.

Token accounts are specific for each type of custom token, so a single public key can have many different token accounts.

A token account is automatically created for a public key whenever an existing account receives a transaction denoted with a custom token.

[!IMPORTANT] When a token account is created for the first time, an account creation fee must be paid the same as creating a new standard account.

Token ID

Token ids are unique identifiers that distinguish between different types of custom tokens. Custom token identifiers are globally unique across the entire network.

Token ids are derived from a Token Manager zkApp. Use deriveTokenId() function to get id of a token.

Approval mechanism

Sending tokens between two accounts must be approved by a Token Manager zkApp. This can be done with approveBase() method of the custom token standard reference implementation.

If you customize the transfer() function or constructing AccountUpdates for sending tokens manually, don't forget to call approveBase().

Mina Fungible Token Documentation