Tokens, ICO, Decentralized Distributed Exchange

As some of the main features in Stellar, we will now see the Tokens, ICO and Decentralized exchanges that the network provides. In some cases where there are transactions between two different currencies, the Stellar network uses a Decentralized Exchange and automatically searches for the best exchange rate on the crypto market.

This exchange is at the core of Stellar and is one of the most potent features on the network since it can be used to trade anything that can be held by anchors including crypto. The live view of orders is available on the Stellar Network and this can be described as the distributed exchange as a large pool of offers where you can trade at different rates. The live view can be seen on the Stellar dashboard and you can convert order between XLM and a gateway local currency where there could be a lot of conversions. For example, a user could submit transactions that can be converted to dollars and to XLM and then those XLM to EURO.

The users will have sent dollars at the end and the recipient will have received EURO so both of the exchange orders will be fulfilled. Stellar saw its Initial Coin Offerings on the platform raise up to 1.3 billion in the 8 months during 2017. Stellar provided four reasons on their website on why the ICOs should have to use the Stellar platform:

1. Stellar offers a built-in decentralized exchange. This means that all of the tokens are created on the platform and can be bought and sold on the decentralized exchange. The user doesn’t have to rely on the independent third party exchange just to list them on the market.
2. The Stellar model uses multi-operation transactions which in return limit the uncertainty and can be less susceptible to do any harm of the exploitation of program weaknesses. Furthermore, if an event like this occurs, Stellar allows the users to have all of their tokens frozen. Finally, it is equipped with a strong security feature that an individual will gain the ability to pick the tokens that validate the tokens easily and selectively.
3. The stellar model can create custom initial coin offerings. Stellar enables a huge range of customization for ICOs and provides constructs such as tokens, accounts, and payments so using the platform will lead to a faster development time since it has built-in features such as token creation and whitelisting. Therefore the platform will be extremely effective for establishments whose requirements include having to know your customer.
4. Stellar has only one not as major transaction fee unlike Ethereum which was become progressively expensive so Stellar is now much faster than Ethereum and is median transaction time is quite smaller as well with 5 second to 3.5 minutes respectively.