Smartlands Platform says Stellar is a Prime Fit for Security Tokens
Business, STOs, Technology

Smartlands Platform says Stellar is a Prime Fit for Security Tokens

Viktor Krekotin, a Smartlands advisor and Stellar network advocate, has recently claimed that as STOs become increasingly popular, the Stellar network is the best option to handle such new offerings— especially when compared to Ethereum.


There is no doubt that as STOs become more popular, the need to establish clear regulatory requirements and feasible methods of compliance will only rise. While the securities token community waits for global legislative decision-makers to formulate such parameters, Smartlands claims that the Stellar Network is ahead of the curve.

When compared to Ethereum, Stellar offers many advantages that are simply absent of the ERC-20 token standard, says Krekotin. Most of these benefits seem to center around simplicity, compliance, and security.

Simplicity

The bulk of the simplicity advantage seen in Stellar is through its ease of use and efficient functionality. As Krekotin writes,

Ethereum is getting more difficult every day, the popular demand causes the platform to run slow and drives up costs. By comparison, Stellar is lightning-fast, cheap, simple, and (another stone thrown at Ethereum) instantly scalable, meaning, of the two projects simultaneously developed on Ethereum and Stellar, the latter would cost much less yielding better profits.”

And Krekotin’s words are not entirely opinionated, there are numbers— though from Stellar— to support his claim:

Specification

Ethereum

Stellar

Average Transaction Confirmation Time

>3 Minutes

5 Seconds

Average Transaction Fee, USD

>0.1 USD per Transaction

0.01 USD per 5,000 Operations

Speed, Transactions per Second

7 Transactions per Second

3000+ Transactions per Second

Sources: Stellar and Stronghold.

Compliance

The Stellar network features numerous capabilities to prove regulatory compliance.

  • First, their Compliance Protocol allows for the enforcement of Anti-Money Laundering (AML) requirements through information exchange and a transaction process which includes pre-approval.
  • Second, asset issuance is a mere two-step process which can reportedly be performed without much technical knowledge. Access to asset ownership can also be limited through the activation of a trustline authorization, by the issuing account. This is a feature which can also easily implement KYC requirements.
  • Third, Stellar allows for the freezing of assets on certain accounts through the revocation of trustline authorization. The design here is for stolen tokens, or to pause activity from account owners who have violated platform rules.

Security

Stellar’s decentralized exchange features the capability to trade tokens instantaneously, with neither an additional party involved nor a further transaction fee associated with the Stellar blockchain. This is distinct from Ethereum’s ERC-20, and brings with it an unparalleled level of security, writes Krekotin:

The Ethereum’s Turing complete programming capabilities produce the code that’s less auditable and is at a higher risk of exploitable vulnerabilities. By comparison, the Stellar’s, atomic transactions comprised of simple operations lead to a more auditable code and create fewer security pitfalls.

Lastly, Krekotin’s message emphasized the progressive difficulty in utilizing the Ethereum network, which— he holds— is strikingly different from Stellar:

“The majority of blockchains require only a basic token, therefore, smart contracts on Stellar are much more straightforward, they facilitate much faster and cheaper transactions than the Ethereum’s sophisticated programming language for smart contracts. This is a huge benefit for many investors: while Ethereum, no doubt, has extensive programming capabilities, Stellar is the best choice for STOs that do not require complex smart contracts.

Do you agree with Krekotin’s criticisms of the Ethereum network? Will the simplicity and efficiency of Stellar result in an STO launching powerhouse? Let us know what you think below.


Image courtesy of Smartlands.

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September 24, 2018

About Author

GaryStevens Gary Stevens is a full time developer based in Canada. He's an early bitcoin investor and loves everything open source. Gary believes in a decentralized future and has worked with a number of corporate clients helping them understand blockchain technology and innovation.