Trustlines on Stellar: An Overview
What is a Trustline?
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trustline on the Stellar network is an explicit agreement set up by an account holder that enables them to hold, receive, and transact with a particular non-native asset (i.e., any asset other than XLM) issued by a specific issuer. Trustlines are distinct from the native XLM currency and are fundamental to Stellar’s asset issuance model. They act as a form of opt-in: an account must establish a trustline before it can hold a given asset. This mechanism helps mitigate spam and unwanted tokens on the network
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How Trustlines Work
- Establishment: To hold a token (e.g., USDC, BTC tokens, or a custom asset), the account explicitly establishes a trustline to the issuer of that token.
- Minimum Reserve: Each trustline requires the account to maintain a small minimum balance of XLM as a reserve (for example, adding a trustline usually requires an additional 0.5 XLM reserve), which prevents spam and excessive asset creation4.
- Usage: Once established and funded, a trustline enables the account to receive, send, or trade the corresponding asset.
- Removal: Users can remove a trustline if they no longer want to interact with that asset or wish to reclaim their reserve.
Why Trustlines Are Important
- Opt-In Protection: They offer protection for users, ensuring wallets only receive assets that they explicitly opt in to hold.
- Ecosystem Integrity: By requiring a minimum reserve, they deter creation of excessive or spammy tokens, preserving network resources and promoting honest asset distribution.
- Flexible Asset Model: Trustlines allow the Stellar network to support a wide range of tokenized assets and use cases, including stablecoins, real-world asset tokens, and remittance tools12.
Example Use-Case
If you want to hold USDC on Stellar, your wallet first establishes a trustline to the USDC issuer address on the Stellar network. Only after the trustline is created can you receive and send USDC.
Additional Notes
- An account can only have a limited number of trustlines (up to 1,000 per account), making it important to choose desired assets wisely5.
- Trustlines are unique to Stellar among major blockchains, serving as a safeguard and a key network design feature3.
References