The Stellar network can be used to hold, transfer, and trade any type of asset. Using Stellar, there’s no need to create a custom, error-prone smart contract to issue an asset. Instead, the concept of an asset is built into the open source software that powers the Stellar network. This makes the process of issuing assets on the Stellar network more secure and much easier.
The Stellar network can be used to hold, transfer, and trade any type of asset: dollars, euros, bitcoin, stocks, gold, ICO tokens, and more.
Using Stellar, there’s no need to create a custom, error-prone smart contract to issue an asset.
Instead, the concept of an asset is built into the open source software that powers the Stellar network.
This makes the process of issuing assets on the Stellar network more secure and much easier.
There are three types of assets in the network:
Lumens are the native currency of the network and act as a spam prevention mechanism via transaction fees and as a bridge currency between different assets on the decentralized exchange.
These are assets that originate on the network and don’t represent any assets outside of the network. They are often ICO tokens similar to ERC-20 tokens.
Other terms for this asset include non-collateralized or non-redeemable.
If an asset did not originate on the network, it is anchored on the network by an anchoring entity, or anchor.
These assets are also called collateralized, redeemable, or tethered assets.
Anchors act as a bridge between outside currencies and the Stellar network.
An anchor can be thought of as a bank. Banks:
Interacting with anchors is similar. Anchors:
The primary difference between assets held in banks vs anchors is where you can access and move your assets.
A centralized database vs the Stellar ledger
Because all the anchors - the payment processors, banks, exchanges, and other financial institutions - are operating on the same network, they and their users can transact with each other without the friction of fees, middlemen, and wait times.
To hold an asset from an anchor, you must issue a trustline to that anchor’s account
Just as you only do business with banks and exchanges you trust, you should only work with anchors that you trust to hold your assets and honor your withdrawals.
When you want to hold assets with a bank in the real world, you must open an account with them.
Similarly, in the Stellar network, when you want to hold assets with an anchor, you must issue a trust line from your Stellar account to that anchor’s Stellar account. Trustlines also protect you from having random, unsolicited assets sent to you.
Anchored assets can be any asset. There’s anchored