How to Create Stellar Smart Contracts?

Stellar, a decentralized blockchain platform, is another notable player in the realm of smart contracts. Created with a focus on enhancing cross-border transactions and promoting financial inclusivity, Stellar also empowers users with the ability to create and execute smart contracts. These self-executing agreements on the Stellar network enable seamless and efficient transactions, reducing the need for intermediaries. Similar to Ethereum, Stellar’s integration of smart contract functionality expands the horizon of possibilities for users, fostering a decentralized and transparent ecosystem for various digital assets and transactions.

In contrast, Stellar distinguishes itself by not featuring a smart contract language or an embedded virtual machine for code execution. Its primary focus lies in optimizing the processes of sending, storing, and trading value.

A notable development occurred in October 2022 when the Stellar Development Foundation (SDF) introduced Soroban, the native smart contracts platform for the Stellar network, which went live on Futurenet. This marked a significant shift for Stellar, as Soroban now empowers developers and users to engage with smart contracts on the platform. Those interested in leveraging smart contracts on Stellar must familiarize themselves with Soroban, a purposefully designed platform tailored for compatibility with Stellar.

This article delves into the process of creating smart contracts on the Stellar blockchain using Soroban. Before exploring the specifics of crafting Stellar smart contracts, it’s essential to gain a foundational understanding of both the Stellar platform and smart contracts in general.

What is a smart contract?

A smart contract refers to a program residing on a blockchain that activates when specific conditions are met. These contracts automate the execution of agreements, enabling all involved parties to instantly ascertain the outcome without the need for intermediaries. They streamline workflows and initiate actions based on predefined conditions.

Essentially constructed on “if/when…then” logic, smart contracts translate these statements into code within a blockchain. When verified conditions are met, a network of computers executes designated actions. These actions span a range, from issuing notifications and tickets to disbursing funds and registering vehicles. Upon completion of a transaction, the blockchain is updated, ensuring the transaction’s immutability. Only those granted permission can access and view the results.

Smart contracts can encompass numerous conditions, ensuring the satisfaction of all participants. Agreement on how transactions and data are represented on the blockchain, along with the establishment of “if/when…then” rules, is crucial.

To create Stellar smart contracts, developers typically use the Stellar Development Foundation’s (SDF) native programming language, known as Stellar Smart Contracts (SSC).

Initially programmed by developers, the creation and execution of smart contracts have become more accessible with the availability of templates, web interfaces, and other online tools.

The advantages of smart contracts include:

1. Speed and Accuracy: Being digital and automated, smart contracts eliminate manual intervention, guaranteeing error-free and instantaneous processes.
2. Transparency: With no involvement of third parties and the utilization of encrypted records, smart contracts prevent information tampering.
3. Security: As transactions are blockchain-based, they are immutable, enhancing overall security.
4. Savings: Eliminating intermediaries reduces transaction time delays and associated fees, resulting in cost savings.

A Brief about the Stellar Blockchain

Stellar stands as an open-source network facilitating asset issuance and payments. This platform enables the creation, sending, and trading of digital representations of various values, including traditional currencies like U.S. dollars or Argentine pesos, as well as assets such as Bitcoins and real estate. Designed to foster global financial system interaction on a unified network, Stellar operates as a public network without centralized ownership. It runs on a decentralized open network, managing millions of daily transactions with efficiency comparable to cash transactions. In contrast to other blockchain systems, Stellar is known for its speed, cost-effectiveness, and overall efficiency.

Stellar’s Cryptocurrency Role and Intent

Stellar, from its inception, has been associated with cryptocurrencies but with a distinctive purpose—to enhance rather than replace existing financial systems. Unlike Bitcoin, Stellar isn’t restricted to trading bitcoins only; it is a decentralized system facilitating efficient and transparent trading of various values.

The native digital currency of Stellar is called the lumen, utilized in small amounts for initiating accounts and conducting transactions. Stellar prioritizes no specific currency beyond these functional requirements, emphasizing its mission to make traditional forms of value more accessible in the digital realm.

How Stellar Operates

At its core, Stellar functions as a system for tracking ownership, employing an immutable ledger similar to traditional accounting practices. What sets Stellar apart is its decentralized nature, devoid of a central authority. Instead, a network of computers independently verifies each other’s work, ensuring autonomy and resilience against network manipulation. The Stellar Consensus Protocol (SCP), utilizing Proof-of-Agreement, achieves consensus every five seconds, offering flexibility, efficiency, and speed.

To create a new Stellar account, users can follow a straightforward process facilitated by the Stellar network. First, individuals need to generate a key pair consisting of a public address and a private key. The public address serves as the destination for receiving funds, while the private key ensures secure access and control over the account. Users can employ various wallet options to manage their Stellar assets, including hardware wallets, desktop wallets, and mobile wallets.

Once the key pair is generated and the wallet is set up, users can initiate transactions by broadcasting them to the Stellar network. These transactions, along with the account’s balance and other operations, are disseminated every five seconds through nodes running the Stellar core software. These nodes play a crucial role in validating ledger publications and transactions, ensuring the integrity and security of the network.

Stellar’s commitment to transparency is evident in its protocol, which is validated by numerous nodes worldwide. This transparency is further reinforced through the public availability of information regarding node names and addresses. Users can easily verify the authenticity of transactions and ledger publications, promoting trust within the Stellar ecosystem.

Understand and create Stellar Smart Contracts

Stellar, unlike Ethereum, lacks an inherent smart contract language or a virtual machine for coding and optimizing smart contracts. However, Stellar Smart Contracts (SSCs) are crafted by combining transactions and diverse constraints to achieve the desired outcomes.

Examples of Constraints in SSCs:

1. Multisignature: Dictates the keys required for authorizing specific operations, necessitating signatures from various parties for transaction approval.
2. Atomicity/Batching: Involves multiple operations in one transaction, ensuring the entire series of operations fails if one operation fails.
3. Sequence: Defines the order of processing a transaction series, leveraging sequence numbers to manage dependencies and limitations.
4. Time Bounds: Imposes restrictions on when a transaction can be executed, representing periods within an SSC.

Introduction to Soroban: Developed by Futurenet, Soroban is a purpose-built smart contract platform launched on the Stellar network in October 2022. Supported by a $100 million fund, Soroban aims to simplify smart contract creation and deployment. The Rust-based code is available for download, and the platform is live on Futurenet, undergoing testing before its anticipated launch in early 2023.

Soroban Features:

• Turing Complete Smart Contracts: Soroban introduces these contracts to the Stellar network, built in WebAssembly (WASM) with Rust.
• Performance: Designed for high performance, Soroban, combined with the Stellar network’s capabilities, extends access to financial services.
• Ease of Use: Soroban prioritizes simplicity and user-friendliness, evident in its design and functionality.

Integration with Stellar and Incentives:

Soroban operates independently of Stellar but collaborates to provide users and developers with equitable access to decentralized finance (DeFi). The Soroban Adoption Fund allocates $100 million to incentivize developers creating products supporting the Soroban ecosystem. The “Sorobanathon: First Light” incentive program encourages developers to test Soroban, share feedback, and contribute content, such as tutorials and code examples. Detailed information is available on soroban.stellar.org

How to Create Stellar Smart Contracts using Soroban

1. Install Rust: For macOS, Linux, or Unix-like OS, install Rust using rustup with the following commands:

curl --proto '=https' --tlsv1.2 -sSf https://sh.rustup.rs | sh
rustup target add wasm32-unknown-unknown

For Windows or alternative methods, refer to Rust installation.

2. Install Soroban CLI: Execute the following command to install the Soroban CLI:

cargo install --locked --version 0.2.1 soroban-cli
# If the above command doesn't work, run
# cargo install soroban-cli

3. Usage: Run the soroban command to ensure successful installation.

soroban

4. Create a New Project: Initiate a new Rust library using the cargo new command:

cargo new --lib first-project

Edit the Cargo.toml file as instructed.

5. Add Soroban SDK Dependency: Update Cargo.toml to include the Soroban SDK:

[dependencies]
soroban-sdk = "0.2.1"

6. Write the Code: Open src/lib.rs and paste the provided code for a basic Soroban contract.

7. Run the Tests: Execute cargo test to run tests and observe the contract in action.

cargo test

8. Build the Contract: Use cargo build to generate the .wasm file:

cargo build --target wasm32-unknown-unknown --release

9. Deploy to Futurenet: If Docker is installed, run a local node with the Stellar Quickstart Docker image:

docker run --rm -it \
  --platform linux/amd64 \
  -p 8000:8000 \
  --name stellar \
  stellar/quickstart:soroban-dev@sha256:0993d3350148af6ffeab5dc8f0b835236b28dade6dcae77ff8a09317162f768d \
  --futurenet \
  --enable-soroban-rpc

Check the status using:

curl http://localhost:8000

Generate a key on Stellar Laboratory and note both G… (public key) and S… (secret key).

Deploy the contract to the network:

soroban deploy \
    --wasm target/wasm32-unknown-unknown/release/first_project.wasm \
    --secret-key S... \
    --rpc-url http://localhost:8000/soroban/rpc \
    --network-passphrase 'Test SDF Future Network ; October 2022'

Invoke the contract function:

soroban invoke \
    --id cd4dae2c409c433b1e1d83994a20214d3e5f60bdd3a817978d8aa7c797864313 \
    --secret-key S... \
    --rpc-url http://localhost:8000/soroban/rpc \
    --network-passphrase 'Test SDF Future Network ; October 2022' \
    --fn hello \
    --arg friend

The output should be: ["Hello","friend"].

Conclusion

Creating Stellar smart contracts involves a collaborative effort among stakeholders to clearly define the contract’s purpose and agree on conditions and outcomes. A meticulous analysis and agreement on contract details are crucial in the development process. The translation of these contracts into a series of operations and transactions through code requires careful consideration to avoid undesired outcomes due to potential bugs.

The anticipation among Stellar (XLM) users for Soroban’s introduction has been palpable. This platform holds the potential to introduce new functionalities to the network, driving adoption and positioning Stellar in competition with major blockchains like Ethereum. Create Stellar smart contract vision revolves around providing users with an easily accessible, user-friendly, and scalable platform. According to the project team, Soroban has the potential to become the industry standard for smart contract platforms in the cryptocurrency space. The future looks promising for Stellar as it continues to evolve and embrace advancements in decentralized finance.