November 18, 2019

Asset Creation

XLMwallet allows you to store not only lumens (XLM), but also any other assets issued on Stellar. Surprisingly, some people don’t even realize how easy it is to create a new Stellar token. So this time we’ll take a look at this process.

Stellar is many times faster and cheaper than Ethereum. It has smart contracts and lets you issue a new token in minutes. But then why are there so many ERC20 tokens and so (relatively) few Stellar-based tokens? Why is it that we only hear on ICOs and IEOs launched on Ethereum?

The main reason is that Ethereum is just much more famous. Another reason is that people are attracted by the statement that its smart contracts are turing-complete — while Stellar contracts aren’t. Actually, Ethereum smart contracts are only turing-complete in theory, because if you plug a really complicated computation into your contract, the gas fee will become so high your users will never pay it. But that’s a story for another day.

Let’s say you’ve made the right decision to create a new token on Stellar. Good news — just about anyone can do it, and you’ll have to pay a fraction of a dollar for the whole thing. You don’t need any coding, and you won’t have to pay thousands of dollars for a contract audit. Here are the steps:

1) Come up with a nice name for your token — it can be up to 12 characters long. PINKELEPHANT, for example.

2) Go to Stellar Account Generator and create two Stellar accounts — just normal accounts, each with a keypair. One of these will be used to issue tokens and the other to distribute them. You have to make sure to save the keypairs separately so that you don’t mix the two.

3) The issuer account needs to be loaded with at least 2 XLM, and the distributor account with 3 XLM. Stellar has a handy testnet mode where you can practice for free, and the friendbot will even give you 10 000 demo lumens.

4) Transfer the trust from issuer to distributor. The reason why you need two accounts is to limit the activities of the issue. In theory, the issuer account could go on making new tokens indefinitely, bringing the price down to zero. The trust transaction does the following: once all required tokens are created, all the rights are passed to the distributor, and the issuer is locked. It can’t produce any more tokens in the future. The trust operation is signed with the issuer’s private key.

5) Token creation: to do this, you need to make a payment from Issuer to Distributor in new tokens and in the amount that is being created. So if you want to make 1 million PinkElephant tokens, you just have to send 1 000 000 PINKELEPHANT.

6) Once you are done issuing tokens, you need to lock the issuer account. To do this, you set the so-called master key weight of the account to 0.

7) Creating a sell offer. This will allow all other users on the Stellar network to buy your new tokens. You can set the amount you put up for sale and the price of each token.

And that’s basically it — you’ve generated a completely new asset and made it available for purchase. This is basically all you need to run an ICO on Stellar. You can do it yourself and almost for free. Any tokens you create can be added to XLM wallet.

For more info, go to the official Stellar Developers page. And don’t forget to follow us on Twitter!

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