Anchors, Fees, and more...

frank_g

Hi Everyone,

I have been reading a lot on stellar and my team an i decided to use stellar for our cross border money transfer Project. I do have a few questions though in regards to Anchors and fees.

Say for instance we want to start this project and build the wallet and everything that needs to be done for stellar. Now, i understand transferring a digital asset on the stellar network costs basically nothing, but what about depositing fiat and withdrawal of foreign fiat?

Question 1. if i become an anchor does my system need to connect to a bank to receive fiat, if so how is that done? Do i become a payment gateway so that banks and me the anchor can communicate? What about the costs, are their any?

Question 2. Withdrawal in foreign currency. What is required on the other end to withdraw the money in a different currency? I believe its an anchor. Can i connect to an anchor who issues foreign currency, and if so are their any costs and do they connect to a bank where the recipient can retrieve his cash?

Question 3. exchanging from one currency to another. Now as i understand you can have an offering for this. in other words, if someone on the SDEX is interested in buying you can perform the exchange there but what if there isn't? Is there another way of exchanging?

Sorry for the questions and if they are a little confusing lol but this will help me tremendously

Thanks
Frank

inative

Hey frank_g , welcome to the community! I'm no expert in the protocol, but this is how I understand it:

You need a way to get the fiat money from users. Any meaningful way. Could be via bank transfer, card payments, SMS payments, you collecting banknotes at a counter... any way to get the funds from a user to you (the anchor). The stellar protocol doesn't know about external payment systems, so it's really up to your implementation. What you need to do is when you receive the funds from user, you issue respective amount of your token and send to their stellar address. You'd probably have an automated system to do this but in extreme case (you plan to be a tiny anchor) you could even do this manually. The cost is whatever cost you have to run your business.
You're right that the users would use another anchor to withdraw in different currencies. You don't connect to those in any way, i.e. it's up to the user to exchange your tokens for other anchors' tokens before they withdraw. Again, the other anchors can use any mean of withdrawal; bank transfer, PayPal... but you don't care.
As I wrote above, users can exchange your currency on SDEX for other currencies, providing they wish to do so. You don't perform the exchange, it happens automatically when one user with your tokens wishes to buy other currency and another user with the other currency wants to buy your currency. And they place respective SDEX offers with prices that "cross". If there's no such demand, there's obviously no exchange happening and there's not much you can do about it.

Hope it doesn't add to confusion :-) If someone else understands this better, please correct me.

frank_g

inative
Thank you my friend this definitely answered some questions. Although, would it make sense to go through a payment processor to have the funds transferred to our account? Wouldn't that increase the cost of a transfer?
How does everyone else do it?

Nico

frank_g
Hey there,

I'm not an expert myself, but I guess we're currently facing a similar problem. We too have to first receive the funds of our users in order to distribute the assets, i.e. tokens. We figured that we'd have to use a payment processor such as Stripe or Paypal. Doing so, you obviously have to deal with the trx fees of the processors, unless you want to turn 'em over to the users. Once you've received the user's funds and your assets have been distributed, you profit of the low trx costs of the stellar network. If your local currency gets supported of established tether anchors, you might be able to use those to bypass the payment processor's fees.
Hope this helps and let me know how you guys managed to to it ?

Since Stellar is from Stripe, I hope to see an easy way to implement such an exchange in the future.