trustlines
Trustlines on the XRP Ledger represent established trust relationships between two parties.
They enable users to extend credit to each other, facilitating IOUs denominated in any asset or currency.
Each party designates a maximum amount they're willing to trust the other with.
For instance, Alice can trust Bob for a specific quantity of XRP. This mechanism allows for a network of trusted connections, crucial for cross-border payments and decentralized exchanges.
Trustlines enable the XRP Ledger's unique pathfinding algorithm to find the most efficient transfer route between holders, making transactions seamless and cost-effective.