User-friendly transfer fee collection

The Token Program 2022 has seen a significant increase in transactions over the past few months, primarily due to its extended features. Among these, the Transfer Fees function has become the most popular and widely used. Essentially, a small percentage of every transfer is withheld in the recipient’s account, making it inaccessible to them.

While the concept is solid, it has created some user experience challenges for everyday users. The main issue is that the withheld fees remain in the recipient’s token account, which can be confusing for token creators who expect the fees to be automatically collected with each transfer.

There is, however, a rationale behind this design, which is clearly explained in the Solana documentation.

📘 Note: The design of pooling transfer fees at the recipient account is meant to maximize parallelization of transactions. Otherwise, one configured fee recipient account would be write-locked between parallel transfers, decreasing throughput of the protocol.

There are currently two solutions available for token creators to withdraw transfer fees:

1. Use the Solana SDKs to develop custom code that can be run periodically. A detailed guide is available to help with creating such a script.
2. Utilize the Solana CLI tool, specifically the command: spl-token withdraw-withheld-tokens

However, neither of these options is particularly user-friendly. Most token creators are unfamiliar with running CLI tools, let alone writing JavaScript scripts.

Onlytax provides a more user-friendly alternative. It is a decentralized application that simplifies the fee withdrawal process, making it easier than ever for token creators to harvest fees without dealing with the technical details.