Following Part 1: understanding SPL Token Mint, this article introduces the technical details of the SPL associated token program, another popular official Solana smart contract.

The program provides a convenient way to manage a user’s token accounts from a wallet address. Its program id: ATokenGPvbdGVxr1b2hvZbsiqW5xWH25efTNsLJA8knL

The idea is to create a PDA (i.e., program-derived account) from a user’s wallet address and a token mint. There are two main benefits:

1. The PDA can serve as the user’s identity token account for each token they own (with respect to a mint)
2. Tokens can be sent to any user directly using the user’s PDA as the transfer destination, e.g., in airdrop.

A Few Take-Aways on Associated Token Account (ATA):

• Every ATA is a PDA
• Every ATA is a token account
• Every ATA corresponds to a public key (e.g., wallet address)* and a token mint, and is owned by the *wallet address* (see below for *)
• ATA may be created by anybody (not necessarily the wallet address’ signer)
• Nested ATA may be created and the RecoverNested instruction can be used to close a nested ATA.

*wallet address — in fact, it can be any pubkey that can be signed by an authority; e.g., a System account or a PDA (see deep dive on Solana account model).

Details

In the following, we will elaborate on two instructions:

• AssociatedTokenAccountInstruction::Create
• AssociatedTokenAccountInstruction::RecoverNested

Create AssociatedTokenAccount

To create a new associated token account (ATA), users need to supply the following six accounts to function process_create_associated_token_account:

1. funder_info — Funding account (must be a system account)
2. associated_token_account_info —the ATA address to be created
3. wallet_account_info — Wallet address for the new ATA
4. spl_token_mint_info — The token mint for the new ATA
5. system_program_info— System program
6. spl_token_program—SPL Token program

The function first calls get_associated_token_address_and_bump_seed_internal to compute the associated_token_address (i.e., the PDA) and validates the user input:

Internally, the PDA is computed using Pubkey::find_program_address and is uniquely determined by three addresses (in seeds):

• wallet_address
• token_program_id
• token_mint_address

Then, the ATA is created by calling create_pda_account , and its program owner is set to spl_token_program_id (i.e., only the spl_token_program can modify the PDA account’s data):

In spl_token_2022 , it also ensures that the ATA’s owner cannot be changed by calling initialize_immutable_owner:

Finally, the ATA (which is a Token account) is initialized by setting its account.mint to token_mint_address and account.owner to wallet_address :

Note 1: account.owner here is not the program-level owner (i.e., the spl_token_program) of the ATA, but its real authority (i.e., the wallet_address). In other words, wallet_address fully owns the newly created ATA and the owner of wallet_address must sign to transfer tokens from the ATA.

Note 2: If the ATA for a given wallet_address does not yet exist, it may be created by anybody by issuing a transaction containing the AssociatedTokenAccountInstruction::Create instruction.

RecoverNested

A caveat of using the associated token program is that users may (unintentionally) create a nested ATA:

an associated token account owned by an associated token account

Once that happened, users cannot move funds from a nested ATA because it is not owned by the user’s wallet address, but a PDA.

The RecoverNested instruction is used to address this issue. It closes a nested ATA and transfers its tokens to the wallet’s ATA (and transfers its lamports to the wallet).

The input wallet_account_info account must be signed, and the destination_associated_token_account_info account is the recipient of the transferred tokens:

The transferred token amount and mint decimals are extracted from the nested ATA. The signer_seeds (i.e., owner_associated_token_account_signer_seeds) include three addresses and the bump_seed:

1. wallet_account_info.key
2. spl_token_program_id
3. owner_token_mint_info.key
4. bump_seed

The bump_seed is the bump seed returned from creating owner_associated_token_address , which is the PDA owner of the nested ATA (i.e., nested_associated_token_account_info ).

In the next few articles, we will continue to highlight the technical details of a few more Solana programs that are frequently used.

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