I'm sorry if I bother you with asked yet question, but I'm still a bit confused about the need to be an anchor or not when you deal with FIAT deposit/withdraw. From what I can learn here https://www.stellar.org/developers/guides/anchor/index.html Anchors are entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. All money transactions in the Stellar network (except lumens) occur in the form of credit issued by anchors, so anchors act as a bridge between existing currencies and the Stellar network. So, that said, I'd like to show you this scenario: I'm issuing my own token/asset on Stellar called TKN (random name) exchanged to XLM at given price and limit supply I'll sell TKN with an ICO, you could pay in ETH/BTC or FIAT, you tell me how much TKN want and I give you the price in USD/EUR/FIAT and the way to pay me with Paypal (for example) or your wallet if crypto is selected The TKN token (utility) is used inside my app to buy/sell items, get rewards, pay subscriptions, etc... Of course the token can also be exchanged in the SDEX if you want Now a user wants to withdraw his TKN, I can give him multiple choices: --1 Give me your TKN and I give you XLM, simplest one --2 Give me your TKN and I give you FIAT, read below --3 He could ask also for other crypto/tokens but it's not the purpose of this topic (I can use SDEX) Now analysing the choice 2: You give me TKN and I give you EUR with Paypal (for example) If I choose to allow this, I think I'm actually an Anchor for TKN/EUR, am I not? And if you asked for USD? Should I be also a TKN/USD anchor? Instead I could give you EURT from Tempo anchor (or USD from Stronghold), but then you need to go to Tempo (or that anchor) to withdraw real FIAT and I want to avoid this, because I want on/off ramp on my platform. Please could you give me some hints about my doubts? Thanks!

Managing FIAT and anchors

michelem

I'm sorry if I bother you with asked yet question, but I'm still a bit confused about the need to be an anchor or not when you deal with FIAT deposit/withdraw.

From what I can learn here https://www.stellar.org/developers/guides/anchor/index.html

Anchors are entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. All money transactions in the Stellar network (except lumens) occur in the form of credit issued by anchors, so anchors act as a bridge between existing currencies and the Stellar network.

So, that said, I'd like to show you this scenario:

I'm issuing my own token/asset on Stellar called TKN (random name) exchanged to XLM at given price and limit supply
I'll sell TKN with an ICO, you could pay in ETH/BTC or FIAT, you tell me how much TKN want and I give you the price in USD/EUR/FIAT and the way to pay me with Paypal (for example) or your wallet if crypto is selected
The TKN token (utility) is used inside my app to buy/sell items, get rewards, pay subscriptions, etc...
Of course the token can also be exchanged in the SDEX if you want
Now a user wants to withdraw his TKN, I can give him multiple choices:
--1 Give me your TKN and I give you XLM, simplest one
--2 Give me your TKN and I give you FIAT, read below
--3 He could ask also for other crypto/tokens but it's not the purpose of this topic (I can use SDEX)

Now analysing the choice 2:

You give me TKN and I give you EUR with Paypal (for example)

If I choose to allow this, I think I'm actually an Anchor for TKN/EUR, am I not?
And if you asked for USD? Should I be also a TKN/USD anchor?

Instead I could give you EURT from Tempo anchor (or USD from Stronghold), but then you need to go to Tempo (or that anchor) to withdraw real FIAT and I want to avoid this, because I want on/off ramp on my platform.

Please could you give me some hints about my doubts?
Thanks!

Cajga

michelem

If I choose to allow this, I think I'm actually an Anchor for TKN/EUR, am I not?

No, you are not. You are an exchange.

hould I be also a TKN/USD anchor?

Same as above.

You can issue EUR and USD tokens on stellar together with your TKN token and become an anchor for those fiats. The main question is who will trust that you really have the amount (and you do not buy a Lambo from that) of that fiat that you issued on the chain. Users have to have the trust that they will receive their money from you when they would like to withdraw your EUR and USD tokens. Also, you will have to exchange the TKN tokens to your USD and your EUR which requires market movement.

A hint: whenever is possible, rely on existing well known anchors (Tempo/Stonghold etc.) and exchanges (SDEX). This keeps things simple (regulations) and people will be willing to believe that they will ever get fiat out of your platform when they want.

bkolobara

michelem No, I don't think you are a Stellar Anchor. You are just issuing a token and offering to buy it back. You are not backing the token with another asset.

Even if you called yourself an anchor, what difference would it make for you?

michelem

Thanks for your reply!

Ok, I understand a thing, I could be an Anchor if I own FIAT in exchange of USD token (or EUR token) and viceversa and ok it's not my case, I don't want to do this, as you said I'm more like an exchange (Coinbase).

So, instead acting and get regulated as exchange your hint would be to use existing Anchors and SDEX, that's very good, but then I cannot get/give real FIAT, I mean, I have to tell users, please go to this Anchor and get your token FIAT, then come back to me I will exchange token FIAT for TKN and viceversa to ask back real FIAT.

It doesn't seem so much user friendly or I'm still missing something?

dzham

You don't have to redeem your asset for fiat at all.
If it's a utility token, redeem it for a service, and if the owner wants fiat, let them sell on the market.

That's how 100% of ICOs work.

If you're buying back your token for fiat, for more than people paid in the ICO, prepare to bleed to death.
If you're buying back for the same price, why would anyone buy in the ICO, since there's no price appreciation?

michelem

Everything makes sense, thanks guys!