Frequently asked questions

How do decimals work for native tokens on Cardano?

Understanding decimals for native tokens on Cardano involves recognizing that the smallest unit of any token is, by default, 1. This unit represents the minimum value your token can have, a foundational concept when considering decimal places. For instance, creating 100 xTokens with a setting of 2 decimal places means each xToken has a "real value" of 1.00.

Setting the decimal value to 1 implies your xTokens would effectively be divided into 10 units, allowing transactions of 0.1 tokens but not 0.12, highlighting a key difference from ERC20 tokens. The decimal value, adjustable by the token creator, plays a crucial role in the token's divisibility and its representation across wallets and exchanges. It's pivotal to determine the appropriate decimal setting post-minting, based on the total amount minted, to ensure a seamless and consistent user experience.

When registering your token's decimal places in the Cardano token registry, the value you declare influences how exchanges display your token's total supply. For example, minting 100 tokens with an intended two decimal places but registering it with one decimal place would result in a displayed total supply of 10.0 tokens on Cardanoscan, following the registry's approval of your metadata.

Opting for no decimal places simplifies the token's structure, appealing to certain use cases. Ultimately, the choice of decimal representation is a consensus between the developer and the users, with Cardano's infrastructure accommodating an integer-based system for token quantities.

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