Here’s why we moved from the Ethereum Blockchain to the Stellar Blockchain.
Ethereum being the market leader for ICOs, the Ethereum Blockchain was our default choice even as we began analyzing the requirements for this project, which is an upcoming ICO for a B2B Day-care Application.
The multi-user mobile application targets the Day-care industry with a Cryptocurrency based payment system. The project’s expectation from the Blockchain is dual purposed…
- An ICO and an ERC20 Token to fund the project with.
- Cryptocurrency based payment system to be integrated into the Day-care Application.
THE CURRENT PROBLEM WITH BLOCKCHAINS
- COST: Due to the rising price of ETH the transaction costs on Ethereum is high.
- SPEED: The speed of transactions on the Ethereum network is low and moreover, unpredictable.
For a Stellar Performance…
Evaluating the pros and cons of Ethereum and knowing that the business at hand would not suffer by the lesser market presence of a newer Blockchain, we began studying the Stellar Blockchain. The Stellar Blockchain stood out suitably for ICO setup as well as, for Cryptocurrency Payment. Stellar uses its native asset called Lumens to facilitate the exchange of value/assets. With the Stellar Consensus Protocol, it claims to have a transaction confirmation time of 3-5 seconds while being able to handle over 1000 transactions per second! Another winning point is the low cost of transactions on the Stellar network.
In Stellar Blockchain development, it is surprisingly easy to create a new token! And then, it doesn’t demand knowledge of yet another language like Solidity, used on Ethereum. Instead, the Stellar Blockchain exposes the Horizon Rest API to transact with the blockchain. Stellar Blockchain functions on the principle of raising offers and counter-proposals.
Initially, we planned to use the Bifrost Server to enable ETH payments to buy tokens. It is interesting how the Bifrost server listens to the user’s Ethereum address so as to acknowledge the ET transfer and correspondingly move the Stellar tokens to the user’s account. But due to some inherent issues, Bifrost is now eliminated from this application and only Lumens payment is now supported.
The Stellar Decentralized Exchange (SDEX)
The Stellar decentralized, distributed exchange allows currencies and any kind of assets to be traded and transferred across borders. Stellar network uses its native asset, “Lumens”, as a bridge currency. It acts as an intermediary asset that is trusted by both parties to enable the transfer of value from one asset to another.
Horizon REST API
Horizon is the client-facing API server for the Stellar ecosystem. Interacting with the Stellar network through the Horizon RESTful HTTP API server gives a straightforward way to submit transactions, check accounts, and subscribe to events.
Some challenges and how we faced them…
- Finding a way to hold the digital tokens until the ICO matures.
We had 2 options: Either we could freeze the tokens and then release them at some point in time, OR we could use an intermediary multi-signatory account to hold and subsequently release the tokens. - Implementing the KYC Process.
For this, we used the DApp to enable users to upload required documents, and on manual validation of these documents, the user would be flagged as KYC compliant on the blockchain. - Authenticating only KYC-compliant users to invest beyond a certain limit.
Once flagged, we used the data to allow only flagged users to engage with the token sale beyond a certain limit. - Managing Refunds
To fulfill refunds we have devised to generate orders and counter offers. - Support for multiple currencies
This will come in the next phase of the project, and we plan to use the Stellar SDEX, and Stellar Anchors for the various currencies, create a trustline for each, and enable transactions over the SDEX.
Do watch this space for more. I will continue to write more on this project as we progress.
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