Native Tokens and Foundries

Stardust introduces the concept of native tokens, or also called user-defined custom tokens. These tokens are minted into existence by token foundries, represented as Foundry Outputs on protocol level. The foundry defines the supply control rules, that is, how many tokens can ever be created.

All outputs in the ledger support holding native tokens, therefore users don't need the foundry's approval to transact with native tokens. Once native tokens are minted, they function as digital cash. The foundry acts as the central bank controlling supply via minting new tokens or buying back tokens from the market to be melted, hence decreasing the available supply. Users have the ability to burn native tokens in their possession, which is equivalent to sending the to-be burnt tokens to the zero address.

Foundries can only be created and controlled by alias accounts. Smart contract chains therefore can also act as token issuers on L1 and leverage the framework for L2 asset wrapping and inter-L2-chain transfers.