Why Do You Need an Approve or Create Account Transaction When Buying Tokens?

When purchasing memecoins or other tokens on different blockchains, you might encounter an additional transaction before the actual trade — typically “Approve” (on Ethereum-based chains) or “Create Account” (on Solana).

These transactions are normal and necessary, serving as authorization or account setup steps required by the network’s design.

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🪙 On Ethereum (ETH) — Approve Transaction

When buying memecoins or any ERC-20 token on Ethereum or other EVM-compatible chains, you will often see an Approve transaction. This transaction grants permission for a smart contract to access your tokens.

🔑 Purpose of the Approve Transaction

1. Authorize smart contracts to access your tokens During a token purchase or swap, the smart contract needs temporary access to your wallet’s tokens (e.g., ETH or USDT) to deduct the payment and complete the trade. The Approve transaction gives that smart contract permission to use a specific amount of your tokens.

2. Enhance security and prevent unauthorized actions Only the contracts you explicitly approve can access your tokens. This prevents malicious contracts from directly manipulating your wallet, ensuring that you remain in full control of your assets.

3. One-time setup to simplify future trades Some platforms allow you to approve a larger amount once, so you don’t need to re-approve for every trade. When the approved limit is used up, you’ll simply need to re-authorize.

👉 Therefore, the Approve transaction is a critical and necessary step when purchasing memecoins on Ethereum.

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⚡ On Solana — Create Account Transaction

When purchasing memecoins on the Solana network, you’ll often see a Create Account transaction. This occurs because Solana’s account system operates differently from Ethereum’s.

📘 Why “Create Account” Is Needed

1. Solana’s account structure On Solana, each token (such as a memecoin) requires a dedicated account on-chain to store your token balance. When you buy a token for the first time, the system automatically creates a linked token account under your wallet to hold that specific token.

2. Requirement for first-time token storage Your wallet doesn’t have a pre-existing account for new tokens. The Create Account step ensures your wallet has the proper storage structure to receive and hold that token.

3. Efficiency and resource management This architecture allows Solana to store each token’s balance independently — improving efficiency, preventing data confusion, and making queries faster. Although it incurs a small cost, this design keeps the network fast and well-organized.

4. Rent (Storage Fee) Since Solana’s on-chain storage requires rent, you’ll pay a small rent fee when creating a new token account. Once created, that account will store all future balances and transactions for that token — you won’t need to create it again.