As said in issue #85,
some financial institutions need to set the maximum amount of asset
that can be owned by a holder. Although asset issuers can enforce this
kind of limitation by manually checking “Trust Limit” value requested in
the “Change Trust” operation (using authorization and “Allow Trust”
operation); We propose using an automated and built-in solution, which
could help issuers to preventively control maximum asset balance for
each account. This would provide a simple use and built-in “Trust Limit”
The steps of this mechanism are as following:
The issuer should set a “Data Entry”, that points to the corresponding asset and represents the maximum amount of the asset that can be owned by an account.
We name this “Data Entry” as “Asset Limit”.
“Asset Limit” key name, should be defined by convention. We propose using ASSETCODE + “_limit”.
“Asset Limit” value is the maximum number of the asset that can be owned by the holder.
“Change Trust” operation should check the existence of “Asset Limit” in the issuer account.
If “Asset Limit” exists, the operation would make sure the “Trust Limit” requested by the user is less than or equal to “Asset Limit”. Otherwise, the operation is rejected.
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Thanks for the reply.
A simple business sample:
Suppose that a company wants to supply its shares to the market. A management policy of the company is that no shareholder could have more than 50 percent of the company’s shares. If the company decides to use Stellar to implement this solution, it would issue 100 tokens (for example) of an asset that each of them represents one percent of the company’s shares. but there is no way to enforce this policy automatically, using a built-in mechanism.
The company needs to announce the limit to everyone that wants to buy the shares.
The company should commit to shareholders that no shareholder is able to own more than 50 percent of the shares. So no shareholder is concerned about other shareholders owning more than 50 percent of the company’s share.
As a description for the proposed solution:
Existence of the “Asset Limit” data entry would play the role of the announcement.
The built-in limit checking process that is done in the extended “Change Trust” operation, is the passive commitment of the issuer to shareholders.
In addition, the built-in limit checking would help the issuer to easily manage this enforcement. Instead of checking every “Change Trust” operation and validating the requested limit by the user, the “Asset Limit” would be defined once and the limit control would be done by the network automatically. This would reduce the “Change Trust” authorization processing load on the issuer node and also prevents any mistake that may occur during the limit checking process on the issuer node.
The answer to the first question:
3 following feature is needed:
Issuer needs to control the asset limit automatically.
Issuer needs to announce the limit to everyone.
Issuer should commit to everyone that the announced limit is enforced for every account.
No other controls such as amount sent/received are needed.
The answer to the second question:
The CAP18 is introducing a way that issuer could control everything. this is not our need, issuer wants that the authorized asset holder to be free for everything, except owning the tokens more than an announced limit. The issuer wants to enforce this limit automatically.
Also, there is no way of representing the issuer’s commitment that demonstrates this limit would be enforced for every asset holder.
Issuer should use authorization to prevent any asset holder from having more than one account.
“Claimable Balance” is the problem that puts this method under question. We are working on providing some better solutions. One of those would be extending CAP18 solution, by adding a flag to authorization flags, named AUTHORIZED_FOR_LIMTIED_BALANCE that would be used to resolve this issue.
Any other idea or hint would be appreciated.
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Thanks for the replies.
After some checks and discussions on our use-cases, we ended up with the following problem that can not be solved using CAP18:
The issuer just wants to issue an asset that has the so-called balance limit.
The issuer does not want to bother himself anymore and does not want to actively control all the transactions of the issued asset.
The issuer even does not want to use authorization flag, the issuer is sure that every account belongs to a different person using a KYC mechanism.
One reason for the issuer unwillingness to actively control the asset, is that the issuer account is a multi-signature account that is actually locked after issuing the asset. No other operation on the issuer account is possible due to financial and security policies, so the CAP 18 can not be used here.
Is there any solution for the above problem?
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There exists a way that issuer could use CAP18 to manage this problem. But this is not a good solution.
Issuer just wants to enforce a single policy. The only solution here is to use CAP18, which enables the issuer to control everything. Issuer just wants to control a single thing and it should be able to control only that thing.
We are facing some other problems like this in other scenarios, for example, an issuer just wants to issue an asset that is not allowed to be used in Claimable Balance operations. Or the issuer just wants to issue an asset that is not allowed to be traded on DEX. the only existing solution here is to use CAP18. Which is a centralized way of processing asset transactions (all the transactions are centered on the issuer sign). that is inconsistent with blockchain distributed processing concept.
The issuer wants to disable some features on the asset without having any permissions to influence other features.
We want issuer to be able to set the following features for an asset:
The asset is claimable or not.
The asset is tradable or not.
The asset is NFT or not.
Set a maximum balance limit for the asset holder.