Articles on: Blockchain Integration FAQ

How to create trustlines for Stellar

Stellar's core concept revolves around anchors, which can be individuals or entities like banks. Anchors play a crucial role in issuing assets on the Stellar network. They receive deposits of real-world assets and convert them into token balances on Stellar. These anchors also facilitate withdrawals of the tokens they issue.

Anchors' deposit system operates similarly to popular payment apps such as Venmo or PayPal. Users deposit funds, which are then reflected as a balance within the app, allowing them to withdraw the balance when needed. In the case of Stellar anchors, instead of using a centralized database, they issue token balances on the Stellar ledger. These tokens can be utilized across various applications built on Stellar.

It's important to note that multiple entities can issue the same asset on Stellar. For instance, there may be multiple anchors issuing USD tokens. Consequently, users have the freedom to choose which anchors and assets they want to interact with, just as they choose banks and financial services based on their preferences.

Stellar's trustlines are essential for establishing trust with service providers and ensuring the security of your deposits and withdrawals. Trustlines are added to your Stellar account, allowing you to hold specific tokens and specify the amount you're willing to hold. They also protect you from receiving unwanted assets, such as counterfeit currencies from untrusted sources.

To trade, receive, or hold assets on Stellar, you need to create a trustline with the issuing account of the anchor that created the asset. This is done through the Change Trust operation, which incurs a base reserve fee of 0.5 lumens per trustline. This means that your account must maintain a reserve of 0.5 lumens for each trustline until you close them.

While wallets simplify the process of adding trustlines, it's crucial to research and only interact with assets from trusted sources. Platforms like StellarX provide information about anchors, and you can also visit their websites and assess their reputation within the ecosystem. Ultimately, the decision to trust anchors lies with you—avoid blindly trusting assets without thorough evaluation.

Adding Trustlines
Some wallets, such as LOBSTR, automatically trust USDC, so no need to do anything if you're using LOBSTR. For wallets that don't (including

Updated on: 06/06/2023

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