Assets in Polkadot network

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Assets in Polkadot network

The Statemint parachain in the Polkadot network specializes in the creation, management, and use of assets. Assets can be represented in several forms, including rights to off-chain reserves, and NFTs. Statemint uses DOT as its native token and does not support smart contracts. Fungible assets are represented in the Assets pallet, which provides a similar interface as the ERC20 standard. Anyone on the network can create assets by reserving a deposit of 10 DOT and specifying a unique AssetId. Asset creation has several privileged roles such as owner, issuer, admin, and freezer. Statemint provides an interface for transfer of assets and for application development with approval-based transfers. Statemint uses a reserve-backed system for cross-chain accounting, tracking the amount of assets sent to each parachain.

Assets in the Polkadot network can be represented on several chains. They can also take many forms, from a parachain’s native token to on-chain representations of off-chain reserves. This page focuses on the latter, namely assets that would be issued by a creator (e.g. rights to audited, off-chain reserves held by the creator, or art issued as an NFT).

The Statemint parachain hosts data structures and logic that specialize in the creation, management, and use of assets in the Polkadot network. Although other parachains can host applications dealing with assets on Statemint, Statemint can be thought of as the “home base” of assets in the network.

Statemint uses DOT as its native token. The chain yields its governance to its parent Relay Chain, and has no inflation or era-based rewards for collators (although collators do receive a portion of transaction fees). As a system parachain, Statemint has a trusted relationship with the Relay Chain, and as such, can teleport DOT between itself and the Relay Chain. That is, DOT on Statemint is just as good as DOT on the Relay Chain.

Statemint does not support smart contracts. See the Advanced section at the bottom for discussion on using proxy and multisig accounts to replicate oft used contract logic.

Fungible Assets​

Fungible assets are those that are interchangeable, i.e. one unit is equivalent to any other unit for the purposes of claiming the underlying item. Statemint represents fungible assets in the Assets pallet. For those familiar with the ERC20 standard, this pallet presents a similar interface. However, the logic is encoded directly in the chain’s runtime. As such, operations are not gas metered and instead are benchmarked upon every release, leading to efficient execution and stable transaction fees.

Creation and Management​

Anyone on the network can create assets on Statemint, as long as they can reserve the required deposit of 10 DOT. The network reserves the deposit on creation. The creator also must specify a unique AssetId, an integer of type u32, to identify the asset. The AssetId should be the canonical identifier for an asset, as the chain does not enforce the uniqueness of metadata like “name” and “symbol”. The creator must also specify a minimum balance, which will prevent accounts from having dust balances.

An asset class has a number of privileged roles. The creator of the asset automatically takes on all privileged roles, but can reassign them after creation. These roles are:

  • Owner

  • Issuer

  • Admin

  • Freezer

The owner has the ability to set the accounts responsible for the other three roles, as well as set asset metadata (e.g. name, symbol, decimals). The issuer can mint and burn tokens to/from addresses of their choosing. The freezer can freeze assets on target addresses or the entire asset class. The admin can make force transfers as well as unfreeze accounts of the asset class. Always refer to the reference documentation for certainty on privileged roles.

An asset’s details contain one field not accessible to its owner or admin team, that of asset sufficiency. Only the network’s governance mechanism can deem an asset as sufficient. A balance of a non-sufficient asset (the default) can only exist on already-existing accounts. That is, a user could not create a new account on-chain by transferring an insufficient asset to it; the account must already exist by having more than the existential deposit in DOT (or a sufficient asset). However, assets deemed sufficient can instantiate accounts and pay for transaction fees, such that users can transact on Statemint without the need for DOT.

TRANSACTION FEES ON POLKADOT-JS UI

Polkadot-JS UI doesn’t support the functionality to pay with a sufficient asset yet. When using Polkadot-JS UI, transaction fee needs to be paid in DOT.

Transferring Asset Balances​

Users have a simple interface, namely the ability to transfer asset balances to other accounts on-chain. As mentioned before, if the asset is not sufficient, then the destination account must already exist for the transfer to succeed.

The chain also contains a transfer_keep_alive function, similar to that of the Balances pallet, that will fail if execution would kill the sending account.

Statemint also sweeps dust balances into transfers. For example, if an asset has a minimum balance of 10 and an account has a balance of 25, then an attempt to transfer 20 units would actually transfer all 25.

Application Development​

Statemint provides an approve_transfer, transfer_approved, and cancel_approval interface. Application developers can use this interface so that users can authorize the application to effectuate transfers up to a given amount on behalf of an account.

Cross-Chain Accounting​

Statemint uses a reserve-backed system to manage asset transfers to other parachains. It tracks how much of each asset has gone to each parachain and will not accept more back from a particular parachain.

As a result of this, asset owners can use Statemint to track information like the total issuance of their asset in the entire network, as parachain balances would be included in the reserve-backed table. Likewise, for the minting and burning of tokens, an asset’s team can perform all operations on Statemint and propagate any minted tokens to other parachains in the network.

Parachains that want to send assets to other parachains should do so via instructions to Statemint so that the reserve-backed table stays up to date. For more info, see the “Moving Assets between Chains in XCM” section of the article on the XCM format.

Non-Fungible Assets​

Unlike fungible assets, the particular instance of a non-fungible asset (NFT) has meaning separate from another instance of the same class. Statemint represents NFTs in the Uniques pallet.

Similar to the Assets pallet, this functionality is encoded into the chain. Operations are benchmarked prior to each release in lieu of any runtime metering, ensuring efficient execution and stable transaction fees.

Creation and Management​

Anyone on the network can create an asset class, as long as they reserve the required deposit of 10 DOT on Statemint. Creating instances of a class also requires a per-instance deposit, unless the chain’s governance designates the class as “free holding”, allowing the class to mint more instances without deposit. The creator must specify a ClassId, which, like its cousin AssetId, should be the canonical identifier for the class.

The creator can also specify the same privileged roles of Owner, Admin, Issuer, and Freezer.

Asset classes and instances can have associated metadata. The metadata is an array of data that the class Owner can add on-chain, for example, a link to an IPFS hash or other off-chain hosting service. The Uniques pallet also supports setting key/value pairs as attributes to a class or instance.

Transferring NFTs​

Users can transfer their NFTs to other accounts. The chain also provides an approve_transfer, transfer_approved, and cancel_approval interface that application developers can use to allow users to authorize an application to transfer an instance on their behalf.

Advanced Techniques​

Many asset creators on other networks use smart contracts to control privileged functions like minting and burning. Although Statemint does not have a smart contract interface, it contains the Multisig, Proxy, and Utility pallets, which will meet most account management needs.

For example, if a team wants sign-off from two groups to perform a privileged operation, it could create a 2-of-2 multisig from two anonymous proxies, and then set members from each group as proxies to those two accounts.