Stellar Launches Smart Contracts Platform to Revolutionize Its Tech Stack

Stellar, one of the oldest and most established blockchain projects, has announced the successful deployment of smart contracts on its network, a development that they believe will open up a new era for their tech stack and ecosystem.

What are Smart Contracts and Why are They Important?

Smart contracts are self-executing agreements that live on a decentralized network. They allow developers to create complex applications and protocols that can automate transactions, enforce rules, and coordinate actions without intermediaries or trusted parties.

Smart contracts have been widely adopted by many blockchain platforms, such as Ethereum, Solana, Aptos, and others, as they enable innovation and experimentation in various fields, such as decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, social media, and more.

However, Stellar, which was founded in 2014 by Jed McCaleb, the co-creator of Ripple and the founder of Mt. Gox, did not have a virtual machine that could execute custom code like other leading layer-1 blockchains. Instead, Stellar relied on a simpler and more limited scripting language that could only perform basic operations, such as sending and receiving payments, issuing and exchanging assets, and creating escrow accounts.

How Does Stellar’s Smart Contract Platform Work?

Stellar’s smart contract platform, called Soroban, is a native feature of the network that leverages the Rust and WebAssembly (WASM) programming languages. Rust is a popular and secure language that is widely used in the blockchain industry, while WASM is a fast and portable binary format that can run on any platform.

Soroban allows developers to write smart contracts in Rust and compile them to WASM, which can then be deployed and executed on the Stellar network. Soroban also provides a set of tools and libraries that make it easy and convenient to build and test smart contracts on Stellar.

One of the main advantages of Soroban is that it incorporates scalability features that address some of the common challenges and trade-offs of smart contract platforms, such as high fees, unpredictable costs, and state bloat.

Soroban achieves this by:

• Charging predictable fees based on the size and complexity of the smart contract code, rather than the network congestion or the gas price.
• Pricing resources independently, such as storage, computation, and bandwidth, so that developers can optimize their smart contracts according to their needs and preferences.
• Implementing a novel concept called “ephemeral storage”, which allows smart contracts to store data temporarily on the network, rather than permanently on the ledger, reducing the burden on the nodes and the validators.

What are the Implications and Benefits of Stellar’s Smart Contract Platform?

The introduction of smart contracts on Stellar is expected to have significant implications and benefits for the network and its ecosystem, such as:

• Enhancing the developer experience and attracting more talent and innovation to the Stellar platform, especially for those who are familiar with Rust and WASM.
• Empowering the creation of decentralized applications (DApps) that can leverage the existing features and advantages of Stellar, such as low cost, fast speed, global reach, and interoperability with various assets and currencies.
• Expanding the use cases and the utility of Stellar’s native token, XLM, which is used to pay for the fees and the resources of the smart contracts, as well as to participate in the governance and the security of the network.
• Increasing the adoption and the awareness of Stellar as a leading blockchain platform that can deliver real-world solutions for everyday financial services, such as remittances, payments, savings, lending, and more.

What are the Next Steps and the Future Plans for Stellar’s Smart Contract Platform?

Stellar’s smart contract platform has been in development for the last two years, in collaboration with the Stellar community and the validators. It was initially deployed to the Stellar testnet in October 2022, where it was tested and refined by over 160 projects and developers.

On February 20, 2024, the Stellar network validators voted to upgrade the mainnet to Protocol 20, which enabled the activation of smart contracts and initiated the phased rollout of Soroban. The phased approach will give the validators and the network participants time to monitor and ensure the performance, security, and stability of the smart contract functionality at every step.

Gradually, the validators plan to increase the limits for Soroban transactions, building up to full capacity. As the increases happen, the projects and the developers who have been building on the testnet will begin to deploy and launch their DApps on the mainnet, making them available for the public to use.

To encourage and support the development and the adoption of smart contracts on Stellar, the Stellar Development Foundation (SDF), the non-profit organization that supports the growth and the development of the Stellar network, initiated a $100 million funding initiative in October 2022. The initiative aims to provide grants, investments, and partnerships to the projects and the developers who are building on Soroban.

Stellar’s smart contract platform is a major milestone and a game-changer for the network and its ecosystem. It represents a new era for the Stellar tech stack, which delivers a secure, scalable, and easy-to-build developer experience that is built for real-world use.