Polkadot Summit - Foreign Assets on Asset Hub [notes and discussion]

Ecosystem
1

Estimated # of attendees: 30
Attendees/key participants: Iker and Joe (leads), Ricardo (moderator), Sacha (note taker)
Date and location of session: June 26 2023, Copenhagen

The session kicked off with a presentation from @IkerParity, stepping through the new
Foreign Assets Pallet and, by extension, the direction on the intended use of the Asset Hub(s), followed by an open Q&A with @joepetrowski.

Thank you to everyone who participated. Let’s use this thread to share the discussion points with the rest of the community and gather any additional insight or comments that I may’ve missed during my note taking.

Overview

In a nutshell the pallet:

  • Defines assets by multilocation
  • Asset ID expresses its “home”
  • Is useful for custodians, bridges, and other parachains

Implications for parachains:

  • Asset hub allows teleports of sibling parachain assets to/from the native parachain
  • Asset hub doesn’t not recognize a reserve location for any assets
  • Parachains need to configure XCM config

Key message: this pallet exists already on the Asset Hub, we want to see what the community thinks about the proposed direction and start using it.

Q&A / comments from community participants

  • This implies that parachain teams give up sovereignty over their assets

    • Response: there’s no difference in trust level
    • We trust a chain to manage the issuance of a token so we can teleport. But it doesn’t mean we teleport assets everywhere. If parachain 2 and 3 want to transact they use reserved transfer. But assets hub does not need to hold the assets.

  • Where do people look to see what the best practices are for implementing these XCM use cases? Whats a reliable source of truth?

    • Trappist can be that. We’re also looking at use cases docs around Trappist.

  • How would we resolve the potential problem of a chain changing their issuance for example?

    • Just because the tokens are in the asset hub doesn’t mean that the assets are safe or useful.

  • How are the tokens from reserves distributed into the assets hub?

    • Because the tokens were never moved, you unreserve and then teleport to the hub.
    • You can teleport your assets on the hub. Then you mint tokens on the sovereign accounts of paras A, B and C if you wanted.

  • How does moving KSM back to where it was work? Will parachains move their assets to the hub? Or just users?

  • Observation about using Fireblocks to interact with other defi protocols. How many exchanges will be adopting this concept?

    • Binance already allows USDT
    • Kraken
    • Coinbase
    • Kucoin

  • How to handle more complex interactions ?

    • You can have multiple assets from multiple pallets

  • How to think about making metadata standard for wallets like ledger?

  • What influences the trust levels?

    • Relay chain governance and its validators: one trust level
    • Governance of another chain: additional trust level (so chains have to trust more)

We want users to only need to focus on what they’re doing, not what chain they’re on.

Takeaways

  • There’s a commonly wrong mental model that’s adopted which needs changing: the assets on the asset hub aren’t any more legitimate just because they’re on the Hub. Anyone can make a token and mess with the issuance. Its for users and chains to do their due diligence.

  • There weren’t strong controversial opinions about this direction with the Foreign Assets Pallet and decision around its intended use.

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