How to Auto-Create Hedera Accounts with HBAR and Token Transfers
IMG 2356
Oct 26, 2022
by Abi Castro

HIP-32 introduced the ability to auto-create accounts when sending HBAR to an alias that does not exist on the network. When HBAR is sent to an alias that does not exist on the network, the account creation fee is deducted from the HBAR sent and the account is auto-created. The new account's initial balance is (sent HBAR - account creation fee). This new method of account creation allowed wallet providers to create free "accounts" to users. However, if a user sends fungible tokens or NFT's to an alias, it would result in an INVALID_ACCOUNT_ID error because the alias does not exist on the network. The auto-account creation flow could not deduct the account creation fee from an HTS token; the account creation fee must be paid in HBAR.

HIP-542 provides a solution to allow sending HTS tokens to an alias that does not exist on the network. This is achieved by charging the account creation fee to the transfer transaction payer. In addition, there will be one auto-association slot included in the transaction for the new account to associate with the HTS token. You won't have to first create the account, complete a token association, and then finally do a token transfer.

Furthermore, this change also applies to sending hbar to an alias. Instead of deducting the creation fee from the sent hbar, it will be deducted from the payer of the transfer transaction. The new account balance will receive the sent hbar amount in full. Learn more here.

The figure below highlights the transaction flow before HIP-542 and after.

Hip 542 updated

Try It Yourself:

Let’s work through the below example which will walk us through auto-account creation when sending HTS tokens. If you need assistance creating a client and setting up your environment make sure to start on our getting started section.

Example: Treasury sends FT's and an NFT to Bob's alias to auto-create an account

This example guides you through the following steps:

  1. Creating a treasury account
  2. Creating fungible tokens and an NFT collection (1000 FT / 5 NFT)
  3. Creating Bob's ECDSA public key alias
  4. Treasury account transfers HTS token to Bob's alias using the transfer transaction (10 FT / 1 NFT)
  5. Return Bob's new account ID
  6. Show Bob's new account ID owns the tokens and NFT
Account create with hts tokens output

Set up helper functions

We will create the functions necessary to create a new account, create fungible tokens, and create a new NFT collection. Use the code tab switch on the upper left of the code block to see the helper functions.

create account with initial balance
  • create account with initial balance
  • create simple fungible token
  • create simple non-fungible token
  • Mint token and create NFT collection
Code Snippet Background
const createAccount = async (client:  Client, initialBalance: number) => {
 const accountPrivateKey = PrivateKey.generateED25519();
 
 const response = await new AccountCreateTransaction()
   .setInitialBalance(new Hbar(initialBalance))
   .setKey(accountPrivateKey)
   .execute(client);
 
 const receipt = await response.getReceipt(client);
 
 return [receipt.accountId, accountPrivateKey];
};
export const createFungibleToken = async (
 client: Client,
 treasureyAccId: string | AccountId,
 supplyKey: PrivateKey,
 treasuryAccPvKey: PrivateKey,
 initialSupply: number,
 tokenName: string,
 tokenSymbol: string,
): Promise<TokenId> => {
 /*
   * Create a transaction with token type fungible
   * Returns Fungible Token Id
 */
 const createTokenTxn = await new TokenCreateTransaction()
   .setTokenName(tokenName)
   .setTokenSymbol(tokenSymbol)
   .setTokenType(TokenType.FungibleCommon)
   .setInitialSupply(initialSupply)
   .setTreasuryAccountId(treasureyAccId)
   .setSupplyKey(supplyKey)
   .setMaxTransactionFee(new Hbar(30))
   .freezeWith(client); //freeze tx from from any further mods.
 
 const createTokenTxnSigned = await createTokenTxn.sign(treasuryAccPvKey);
 // submit txn to heder network
 const txnResponse = await createTokenTxnSigned.execute(client);
 // request receipt of txn
 const txnRx = await txnResponse.getReceipt(client);
 const txnStatus = txnRx.status.toString();
 const tokenId = txnRx.tokenId;
 if (tokenId === null) {
   throw new Error("Somehow tokenId is null");
 }
 
 console.log(
   `Token Type Creation was a ${txnStatus} and was created with token id: ${tokenId}`
 );
 
 return tokenId;
};
export const createNonFungibleToken = async (
 client: Client,
 treasureyAccId: string | AccountId,
 supplyKey: PrivateKey,
 treasuryAccPvKey: PrivateKey,
 initialSupply: number,
 tokenName: string,
 tokenSymbol: string,
): Promise<[TokenId | null, string]> => {
 /*
   * Create a transaction with token type fungible
   * Returns Fungible Token Id and Token Id in solidity format
 */
 const createTokenTxn = await new TokenCreateTransaction()
   .setTokenName(tokenName)
   .setTokenSymbol(tokenSymbol)
   .setTokenType(TokenType.NonFungibleUnique)
   .setDecimals(0)
   .setInitialSupply(initialSupply)
   .setTreasuryAccountId(treasureyAccId)
   .setSupplyKey(supplyKey)
   .setAdminKey(treasuryAccPvKey)
   .setMaxTransactionFee(new Hbar(30))
   .freezeWith(client); //freeze tx from from any further mods.
 
 const createTokenTxnSigned = await createTokenTxn.sign(treasuryAccPvKey);
 // submit txn to hedera network
 const txnResponse = await createTokenTxnSigned.execute(client);
 // request receipt of txn
 const txnRx = await txnResponse.getReceipt(client);
 const txnStatus = txnRx.status.toString();
 const tokenId = txnRx.tokenId;
 if (tokenId === null) { throw new Error("Somehow tokenId is null."); }
 
 const tokenIdInSolidityFormat = tokenId.toSolidityAddress();
 
 console.log(
   `Token Type Creation was a ${txnStatus} and was created with token id: ${tokenId}`
 );
 
 return [tokenId, tokenIdInSolidityFormat];
};

 const mintTokenTxn = new TokenMintTransaction()
   .setTokenId(tokenId)
   .setMetadata(metadatas)
   .freezeWith(client);
 
 const mintTokenTxnSigned = await mintTokenTxn.sign(supplyKey);
 
 // submit txn to hedera network
 const txnResponse = await mintTokenTxnSigned.execute(client);
 
 const mintTokenRx = await txnResponse.getReceipt(client);
 const mintTokenStatus = mintTokenRx.status.toString();
 
 console.log(`Token mint was a ${mintTokenStatus}`);
};

export const createNewNftCollection = async (
 client: Client,
 tokenName: string,
 tokenSymbol: string,
 metadataIPFSUrls: Buffer[], // already uploaded ipfs metadata json files
 treasuryAccountId: string | AccountId,
 treasuryAccountPrivateKey: PrivateKey,
): Promise<{
 tokenId: TokenId,
 supplyKey: PrivateKey,
}> => {
 // generate supply key
 const supplyKey = PrivateKey.generateECDSA();
 
 const [tokenId,] = await createNonFungibleToken(client, treasuryAccountId, supplyKey, treasuryAccountPrivateKey, 0, tokenName, tokenSymbol);
 if (tokenId === null || tokenId === undefined) {
   throw new Error("Somehow tokenId is null");
 }
 
 const metadatas: Uint8Array[] = metadataIPFSUrls.map(url => Buffer.from(url));
 
 // mint token
 await mintToken(client, tokenId, metadatas, supplyKey);
 return {
   tokenId: tokenId,
   supplyKey: supplyKey,
 };
}

1. Create a treasury account

We create the treasury account which will be the holder of the fungible and non-fungible tokens. The treasury account will be created with an initial balance of 100 HBAR.

Code Snippet Background
const [treasuryAccId, treasuryAccPvKey] = await createAccount(client, 100);

2. Create FTs and create an NFT collection

Leverage the createFungibleToken helper function defined above to create 10000 "Hip-542 example" fungible tokens. Use the code tab switch on the upper left of the code block to see how we use createNewNftCollection to create our new NFT collection consisting of 5 NFTs.

createFungibleToken
  • createFungibleToken
  • createNewNftCollection
Code Snippet Background

 const tokenId = await createFungibleToken(client, treasuryAccId, supplyKey, treasuryAccPvKey, 10000, 'HIP-542 Token', 'H542');
 // IPFS content identifiers for the NFT metadata
 const metadataIPFSUrls: Buffer[] = [
   Buffer.from("ipfs://bafkreiap62fsqxmo4hy45bmwiqolqqtkhtehghqauixvv5mcq7uofdpvt4"),
   Buffer.from("ipfs://bafkreibvluvlf36lilrqoaum54ga3nlumms34m4kab2x67f5piofmo5fsa"),
   Buffer.from("ipfs://bafkreidrqy67amvygjnvgr2mgdgqg2alaowoy34ljubot6qwf6bcf4yma4"),
   Buffer.from("ipfs://bafkreicoorrcx3d4foreggz72aedxhosuk3cjgumglstokuhw2cmz22n7u"),
   Buffer.from("ipfs://bafkreidv7k5vfn6gnj5mhahnrvhxep4okw75dwbt6o4r3rhe3ktraddf5a"),
 ];
 
 /**
  * Step 2
  * Create nft collection
 */
 const nftCreateTxnResponse = await createNewNftCollection(client, 'HIP-542 Example Collection', 'HIP-542', metadataIPFSUrls, treasuryAccId, treasuryAccPvKey);

3. Create Bob's ECDSA public key alias

An alias is an initial public key that will convert into a Hedera account through auto-account creation. An alias consists of <shard>.<realm>.<bytes>.

To learn more about accounts created via an account alias go here.

Code Snippet Background
 const privateKey = PrivateKey.generateECDSA();
 const publicKey = privateKey.publicKey;
 
 // Assuming that the target shard and realm are known.
 // For now they are virtually always 0 and 0.
 const aliasAccountId = publicKey.toAccountId(0, 0);
 
 console.log(`- New account ID: ${aliasAccountId.toString()}`);
 if (aliasAccountId.aliasKey === null) { throw new Error('alias key is empty') }
 console.log(`- Just the aliasKey: ${aliasAccountId.aliasKey.toString()}\n`);
New account just alisk key for both

Set up helper functions for transferring HTS tokens

Once we have our treasury account with FT and a new NFT collection created, our next step is to transfer them to Bob using their alias. We'll create the sendToken helper function to send fungible tokens and create transferNft to send a single NFT. 

A quick reminder to use the tab on the left of the code block to switch between the two helper functions.

Code Snippet Background
export const sendToken = async (client: Client, tokenId: TokenId, owner: AccountId, aliasAccountId: AccountId, sendBalance: number, treasuryAccPvKey: PrivateKey) => {
 const tokenTransferTx = new TransferTransaction()
   .addTokenTransfer(tokenId, owner, -sendBalance)
   .addTokenTransfer(tokenId, aliasAccountId, sendBalance)
   .freezeWith(client);
 
    // Sign the transaction with the operator key
    let tokenTransferTxSign = await tokenTransferTx.sign(treasuryAccPvKey);
 
    // Submit the transaction to the Hedera network
    let tokenTransferSubmit = await tokenTransferTxSign.execute(client);
    // Get transaction receipt information
    await tokenTransferSubmit.getReceipt(client);
}

4. Transfer FT and an NFT to Bob using their alias 

Transfer 10 fungible tokens to Bob using their alias and the helper function sendToken.

Transfer the NFT with serial number 1 to Bob using the helper function transfertNFT.

Send Bob 10 FT
  • Send Bob 10 FT
  • Send Bob an NFT
Code Snippet Background

 await sendToken(client, tokenId, treasuryAccId, aliasAccountId, 10, treasuryAccPvKey);
const nftTokenId = nftCreateTxnResponse.tokenId;
 const exampleNftId = 1;
 await transferNft(client, nftTokenId, exampleNftId, treasuryAccId, treasuryAccPvKey, aliasAccountId);

5. Return the new account ID

Create a helper function to return the corresponding account Id to the given an alias.

Code Snippet Background
export const getAccountIdByAlias = async (client: Client, aliasAccountId: AccountId ) => {
 const accountInfo =  await new AccountInfoQuery()
   .setAccountId(aliasAccountId)
   .execute(client);
  
return accountInfo.accountId;
}

Next we call getAccountIdByAlias and pass in our client and Bob's alias as the arguments.

Code Snippet Background
const accountId = await getAccountIdByAlias(client, aliasAccountId);
console.log(`The normal account ID of the given alias: ${accountId}`);
Normal account id both hip 542

6a. Show Bob's new account owns the 10 FT tokens

Complete an AccountBalanceQuery to show that Bob's new account owns the 10 fungible tokens the treasury account sent.

Code Snippet Background
 const accountBalances = await new AccountBalanceQuery()
   .setAccountId(aliasAccountId)
   .execute(client);
 
 if (!accountBalances.tokens || !accountBalances.tokens._map) {
   throw new Error('account balance shows no tokens.')
 }
 
 const tokenBalanceAccountId = accountBalances.tokens._map
   .get(tokenId.toString());
 
 if (!tokenBalanceAccountId) {
   throw new Error(`account balance does not have tokens for token id: ${tokenId}.`);
 }
 
 tokenBalanceAccountId.toInt() === 10
   ? console.log(
     `Account is created successfully using HTS 'TransferTransaction'`
   )
   : console.log(
     "Creating account with HTS using public key alias failed"
   );
 
 client.close();
Ft account created successfully hip 542

6. Show Bob's new account owns the NFT

First create a helper function that creates a TokenNftInfoQuery transaction and returns the account id of the nft owner for a specific nft serial number.

Code Snippet Background
export const getNftOwnerByNftId = async (client: Client, nftTokenId: TokenId, exampleNftId: number) => {
 const nftInfo = await new TokenNftInfoQuery()
   .setNftId(new NftId(nftTokenId, exampleNftId))
   .execute(client);
 
 if (nftInfo === null) { throw new Error('nftInfo is null.') }
 const nftOwnerAccountId = nftInfo[0].accountId.toString();
 console.log(`- Current owner account id: ${nftOwnerAccountId} for NFT with serial number: ${exampleNftId}`);
  return nftOwnerAccountId;
}

Then call getNftOwnerByNft and do a simple check to ensure the account id returned matches the account id created when we sent the NFT to Bob's alias.

Code Snippet Background
 const nftOwnerAccountId = await getNftOwnerByNftId(client, nftTokenId, exampleNftId);
 
 nftOwnerAccountId === accountId
   ? console.log(
     `The NFT owner accountId matches the accountId created with the HTS\n`
   )
   : console.log(`The two account IDs does not match\n`);
  
 client.close();
Nft current owner account matches hip 542

And that's a wrap! 🎬 You've completed sending HTS tokens to an alias and triggering an auto-account creation! As well as learned that the account creation fee is paid by the payer of the transfer transaction. 

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Happy Building! 👷