Today I will be explaining one of the features that makes Stellar very versatile; Assets.
What is an Asset?
Simply put, an asset is any form of credit issued by an entity. Usually, it is the digital representation of something you have control over. For example, a farmer can have digital assets representing each kilogram of corn he/she harvests. A company can issue assets representing its profits, this can then be used to share dividends. An individual can even issue assets to represent invitations for their upcoming party; no asset no entry. You can quickly see that the use case is endless. An asset can be anything you imagine.
Assets make representation of other currencies(fiat and crypto) possible on the Stellar network. With assets, banks and licensed money transfer operators can issue fiat tokens on the Stellar network and move this within the network instead of moving physical cash. This reduces the cost of remittances significantly.
Things to know when creating Assets.
– You need at least 2 accounts when issuing assets
– Both accounts should have a minimum of 31 XLM
– Assets are issued by creating a trustline between issuing and distributing accounts
– Before any account can hold your asset, they need to trust the issuing account (trustline)
– Never send and asset back to the issuing account; it won’t show up in its balance. Always send it to the distributing account.
How to create Assets.
I wouldn’t cover this as Jed, the co-founder of Stellar has written a good post about this. Also there are some tools in the build challenge to help you out. See links below