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Change on the horizon as Stellar blockchain upgrades to Protocol 17

  • Stellar blockchain to upgrade to Protocol 17 if validators vote goes through.
  • SDF introduces a new feature-asset clawback.

Stellar (XLM) blockchain may undergo an upgrade to Protocol 17 later today if validators vote in favor of the upgrade. The Stellar Development Foundation (SDF) had mentioned the possible Protocol 17 improvements in a blog post released on the 19th of May.

According to the developer of Stellar blockchain, the update will be immediate if the vote goes through. The Foundation further advised that anyone building on Stellar should be ready to install the updated versions of all Stellar-related software. 

SDF releases new versions of the Stellar Protocol a few times every year to include new and up-to-date features to meet consumers’ needs. Apart from the approval from validators, protocol upgrades require everyone building on the Stellar Protocol to install new versions of Stellar Core, Horizon, and the Stellar SDKs. Installing the necessary versions expands network capabilities. Also, the installation allows developers to create new and improved products and services on the network. 

Stellar to upgrade to Protocol 17

In the blog post, SDF highlighted fee bumps, claimable balances and sponsored reserves as the features included in recent protocol changes. The feature helps to design user-friendly experiences easily. Further in the post, SDF explained that Protocol 17 introduces a single feature- asset clawback that allows new possibilities to issue regulated assets on the Stellar network. 

The Foundation said asset clawback is designed for businesses that offer regulated financial instruments. These financial instruments include bonds, equities, and money market funds. SDF continued:

To comply with securities regulatory requirements in many jurisdictions, these issuers – or their designated transfer agents- must demonstrate the ability to revoke assets in certain situations, and this new feature allows them to do that.

In addition, Protocol 17 has adopted a new account flag, new trust line, and claimable balance flags to confirm asset clawback. With the right flags, issuers can claw back a partial or claimable balance. Also, the right account flags can set and clear trust line flags as necessary. 

Issuers to benefit from asset clawback

Furthermore, the asset clawback feature can allow issuers to recover assets that were earlier obtained through fraudulent means. Also, the added feature will help issuers to respond to regulatory actions. Another advantage the features offer to issuers is that it enables the recovery of lost assets due to loss of key custody or theft. Issues will be able to regain the lost assets once they can prove their identities. 

Stellar developers continued that the addition of the new feature will not affect existing assets, accounts, and balances. Additionally, issuers can specify that an asset is clawback-enabled at the point of issuance. 

Notably, asset clawback cannot be enabled on Stellar’s native token XLM. This is because XLM does not require a trust line, nor does it have an issuing account. 

Furthermore, asset clawback will easily allow issuers to tokenize bonds, funds, and equities in a compliant manner. Also, issuers will expand their space, access new markets, and increase their access to more financial infrastructure.

About Author

Bio: Ibukun Ogundare is a crypto writer and researcher who uses non-complex words to educate her audience. Ibukun is excited about writing and always looks forward to bringing more information to the world.

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