TL;DR
Token-2022 is Solana’s next-generation token program that adds extensions like built-in transfer fees, interest-bearing tokens, and confidential transfers to SPL tokens.
The original SPL Token program is simple and fast but limited. Projects wanted features like automatic royalty-style transfer fees, non-transferable tokens for soulbound credentials, and on-chain metadata without external programs. Token-2022 adds these as optional “extensions” that token creators enable at mint time.
Transfer fees let creators charge a percentage on every transfer (useful for reflection tokens). Confidential transfers hide amounts using zero-knowledge proofs. Permanent delegate allows a designated authority to transfer or burn tokens from any holder (for regulated assets). Interest-bearing tokens accrue a display balance over time. Metadata and metadata pointer store token info directly on-chain.
Token-2022 tokens may behave differently than legacy SPL tokens. Transfer fees mean the amount received is less than the amount sent. Some DEXs and wallets have limited Token-2022 support. Always check whether a token uses Token-2022 before trading, as transfer fees can affect slippage calculations and bot performance.