System Glossary

Glossary of Terms

A

• Anchor: A financial bridge connecting the traditional banking system (fiat) to the blockchain network (digital assets).
• Anchor Platform (AP): The official backend suite developed by the Stellar Development Foundation (SDF) that implements standardized protocols out of the box.
• Asset Code: The shorthand alphanumeric identifier for a digital asset (e.g. USDC or INR).

B

• Blockchain Network: The decentralized digital ledger where token assets are minted, transferred, and settled.

C

• Customer Profile: The central user account record containing identity verification states, linked wallets, and KYC approval logs.

D

• Deposit (On-Ramp): The customer payment flow where traditional fiat currency is exchanged for digital assets.
• Distribution Account: The working wallet that holds the anchor's token supply. Handles client deposits and withdrawals.

F

• Fee-Bump: A transaction wrapper where a sponsor account pays the network gas fees on behalf of the customer, enabling gasless user transactions.
• FIU-IND: Financial Intelligence Unit - India. The regulatory agency responsible for registering Virtual Digital Asset Service Providers (VDASPs) and supervising PMLA compliance.
• Float: The active balance of digital tokens or cash reserves maintained by an anchor to settle customer transactions immediately.
• Friendbot: A public faucet tool used in sandbox/testing environments to fund test wallets with mock tokens.

I

• Issuer Account: The locked cryptographic address where an anchor's custom digital asset is originally created and defined.

K

• Know Your Customer (KYC): The regulatory process of verifying the identity of customers (using ID cards and selfies) before executing financial transactions.

M

• Master Key (MASTER_KEK): The primary master key encrypting key used to encrypt the anchor's private signing seeds at rest.

N

• Non-Custodial: A security design where the platform never holds, pools, or controls customer private keys or treasury cash balances.

O

• Observer: The database tracking component that monitors the blockchain network for transaction events matching specific memos.
• Operator Console: The admin panel used by anchor operations staff to monitor transactions, review compliance, and adjust fee margins.

R

• Redemption (Off-Ramp): The transaction flow where a customer returns digital assets to receive equivalent bank transfers in traditional fiat currency.

S

• SEP (Stellar Ecosystem Proposal): Standardized API specs that ensure wallets and anchors are universally compatible:
  • SEP-1 (Service Discovery): A public metadata file (stellar.toml) detailing supported tokens, fees, and API URLs so wallets can discover the anchor.
  • SEP-10 (Cryptographic Authentication): Cryptographic login handshake where users sign challenges with their wallet keys.
  • SEP-12 (KYC Exchange): Standard schema for exchanging customer identity details between wallets and anchors.
  • SEP-24 (Interactive Flow): The secure web view opened inside the customer's wallet to guide them through identity checks and payment checkouts.
  • SEP-38 (Quote Server): API to provide locked conversion quotes (rates and fees) for deposits and withdrawals.
• Signing Account: The anchor's wallet used to sign SEP-10 challenge transactions for user authentication.

U

• UPI (Unified Payments Interface): The instant real-time payment system developed by National Payments Corporation of India (NPCI) for mobile banking transfers.
• UTR (Unique Transaction Reference): The unique reference code generated by Indian banks for tracing financial transfers (IMPS, UPI, NEFT).