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Stellar (XLM) to Undergo Protocol 17 Hardfork with Crucial Update. Why Does It Matter?

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Tue, 06/01/2021 - 08:58
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Vladislav Sopov
Today's upgrade advances regulatory compliance of Stellar (XLM) blockchain
Stellar (XLM) to Undergo Protocol 17 Hardfork with Crucial Update. Why Does It Matter?
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Today, June 1, 2021, at 3:00 pm UTC, the validators of Stellar (XLM) will vote on the most important update in the last month.

Stellar (XLM) goes fully compliant: Introducing Asset Clawback

According to wn official announcement by Stellar Development Foundation, the non-profit behind the development of Stellar (XLM) blockchain, the validators of its network will vote on the Protocol 17 update today.

Stellar Protocol 17 is coming soon and introduces a new feature that opens up new possibilities for issuing regulated assets on the Stellar network.

Learn more on our blog:https://t.co/TQPfhfdc4f

— Stellar (@StellarOrg) May 19, 2021

If passed, it activates an Asset Clawback mechanism that advances the ability of Stellar to comply with securities regulatory requirements in major jurisdictions. The new features will allow asset issuers or transfer agents to revoke their assets in certain situations.

To activate this feature, a new account flag, new trustline and claimable balance flags and new operations to take advantage of those flags are deployed to the protocol mechanism.

Issuers can label their assets and recover fraudulently obtained funds, respond to regulatory requests and enable verified persons to recover assets in case of key losses.

Integrating Stellar (XLM) into DeFi

Stellar (XLM) developers emphasize that this update does not affect existing balances and accounts: to activate the new functions, an issuer should explicitly mark his/her assets as clawback-enabled.

Also, this functionality cannot be implemented on Stellar Lumens (XLM), Stellar's native asset, as it has no issuing account. Also, clawback cannot be enabled retroactively.

Stellar (XLM) devs hope that with Asset Clawback implemented, issuers will be able to tokenize funds, bonds and equities and integrate regulated financial services into the Stellar (XLM) ecosystem.

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)