Analysis of integrating stellar
At MyBit we want to appeal to both markets: crypto users, and non-crypto users. Leading us on a voyage of exploration for the best platform that can be integrated to allow users to utilize fiat on a DApp.
Starting off with Stellar, which is currently ranked #8 on coinmarketcap with a market cap of $3.8b at the time of this writing, and a platform presented fully usable. There are many different layers to this technology, and two of which MyBit could utilize. The first being crypto to fiat payments, and the second listing the MyBit token as an asset tradeable on Stellars distributed exchange.
To interact with an asset on the platform, an instance of the asset must be created using the assets code as many assets may have the same name, but not the same account public ID. Out of curiosity I created multiple assets with the same name and account ID, and lone behold only the first creation is valid, and the following reference the previous creation. For another account to interact/receive/send any asset other than Lumens, an account must establish a trust line with the asset:
By establishing trust with this asset, you are in turn trusting the issuers to trade its credit value outside of Stellar, whether that is a fiat currency or virtual token. Similar to Tether, who promises the capability of redeeming USDT tokens for fiat USD, Stellars decentralized exchange could be seen as a countless supply of Tether anchors.
To get the exchange rate, a query to the orderbook must be made:
Some fiat backed assets, for example EURT an asset created by and backed by Tempo, the main Euro asset listed has lower volume than what was expected. To put this in context, EURT has had $1548 volume in the past 24 hours. Due to this low volume, the exchange rates offered are typically not the correct market price across other exchanges.
Regardless, once the exchange rate has been obtained, an offer can be made to the market:
At this point we now hold a fiat backed asset, which can be exchanged directly on the issuers website or through their API. In the example of tempo, there is a guide of how to do it direct on their website, or through their API. As we do not wish to add unnecessary steps, we would use the API to make the whole process easier. But at this point due to the low liquidity, our resources will go into researching more suitable platforms than implementing the API communication.
When talking about Euro specifically, we plan to have a large amount of funds flowing through the MyBit platform, and at this point the current anchors available would not be able to support us fully as the total circulating supply is €40,322.
MyBit Backed Asset
The idea of listing the MyBit Token on Stellars decentralized exchange is a very interesting topic, and can be done with ease, but the potential complications of backing this MyBit asset with real MyBit tokens is a gray area of Token use. So at this moment we will not be issuing our own MyBit asset until we explore more of the legal framework around doing this.
Overall, Stellar is a platform that has tremendous potential, but it is currently lacking the necessary anchors for the MyBit platform to fully integrate this as our main crypto to fiat avenue. Additionally, you cannot top up your stellar account with any other crypto than Lumens, meaning if we were to use this we would have to initially ping an exchange to change our source crypto, to then convert into fiat based asset, to then exchange these fiat based assets with the Anchor directly, or through their API. By exchanging directly through an exchange to then send to another stellar account, may cause many issues as we are directly handling users funds, and that is not what we want to do at MyBit.
Stellar process of crypto to fiat would take 5 steps:
1) Exchange Eth to Lumen
2) Withdraw Lumen to a stellar account
3) Query bids which may be lower than market price outwidth stellar
4) Make exchange
5) Use fiat backed asset with Anchor
Pros;
- Fast transaction speed
- Low transaction costs
- Well known
Cons;
- Lack of alternative anchors
- Low liquidity
- Account can only be topped up in lumens, not other crypto
- 5 steps for conversion
This was a great platform to research, and it helped us realize that we want a platform or method to contain a direct conversion between the user and fiat supplier with as little as steps as possible.
Resources Used:
Connor Howe, Blockchain Engineer @ Mybit
