InterestBearingConfig (extension)

Mint-side Token-2022 extension that makes a token accrue interest continuously. The stored balance never changes — the UI amount is computed from a rate and elapsed time.

Token-2022 Program 52 bytes concept

What it is

InterestBearingConfig is a Token-2022 Mint extension that makes a token appear to accrue continuously-compounded interest. The crucial detail: no interest is ever written to any account. The raw amount in every TokenAccount stays exactly what was minted or transferred — interest is a display transformation applied by amount_to_ui_amount, computed from the rate and the time elapsed.

Why it exists

Rebasing tokens (where balances grow on-chain) break composability — every transfer would have to touch a global index, and integrators see balances change out from under them. Token-2022’s approach keeps the on-chain balance immutable and pushes the interest math into a deterministic function of (principal, rate, elapsed_time). Wallets and explorers call amountToUiAmount to show the grown value; the ledger stays clean.

Byte layout

This is the payload of an InterestBearingConfig TLV entry (extension_type = 10, length = 52). The full on-chain entry adds the 4-byte TLV header (see the TLV layout primer).

Offset	Length	Field	Type	Notes
0	32	`rate_authority`	`OptionalNonZeroPubkey`	Can change the rate. All-zero means None — rate frozen forever.
32	8	`initialization_timestamp`	`i64` LE (unix seconds)	When the extension was initialized.
40	2	`pre_update_average_rate`	`i16` LE basis points	Time-weighted average rate that applied before the last update.
42	8	`last_update_timestamp`	`i64` LE (unix seconds)	When `current_rate` took effect.
50	2	`current_rate`	`i16` LE basis points	Rate in effect since `last_update_timestamp`. Signed — can be negative.

Total payload: 52 bytes.

Why two rates

Interest must be continuous across rate changes. The amount accrued before the last update is computed with pre_update_average_rate over (initialization_timestamp → last_update_timestamp); the amount accrued since uses current_rate over (last_update_timestamp → now). The “average” field collapses the entire pre-update history into one blended rate so the math stays O(1) regardless of how many times the rate has changed.

Where you see it

Yield-bearing stablecoins and tokenized treasury products use this so a holder’s displayed balance grows without any on-chain transaction. It’s most common in RWA (real-world-asset) tokens where the issuer publishes an APY as a basis-point rate.

Common gotchas

The on-chain amount never reflects interest. If you read a TokenAccount’s raw amount and show it directly, you’ll under-report the holder’s value. Always run it through amountToUiAmount for interest-bearing mints.
The rate is signed (i16). Negative rates are legal — a demurrage token that shrinks over time. Don’t parse it as unsigned.
Basis points, continuously compounded. current_rate = 500 is 5% APR compounded continuously, not 5% simple. The program uses e^(rate × t), so the displayed amount diverges from naive simple-interest math over long horizons.
rate_authority = None freezes the rate, not the interest. Interest keeps accruing at the last set rate forever; None just means nobody can change it.

Sources

InterestBearing extension (program/src/extension/interest_bearing_mint/mod.rs)