All cryptocurrency tokens on Stellar blockchain are essentially debt instruments and are issued through a process called Anchoring - you can read about it here: https://www.stellar.org/how-it-works/stellar-basics/explainers/
It works pretty much the same on every other exchange out there (users deposit money into a wallet, exchange prints "tokens"), the difference with our implementation being that it's fully transparent and on chain - we are not able to cook order books or print STEEM or SBD which users did not deposit to the vault.
Thanks for the clarification.
So what this really means is that the STEEM/SBD token wallet functioning on StellarX will rely on the steemanchor node operator to keep that node functioning instead of relying on the exchange techies to keep the STEEM node functioning. We all know exchanges are terrible at keeping their STEEM nodes functioning.
If this can be implemented on major exchanges, this would be a game changer. The problem is trust. We trust exchanges to a point that they are not going to pack up and skip town with any assets at the exchange. In this case there is a single entity holding the key to steemanchor. How do we trust that a person doesn't skip town with those assets or just drops dead and the key is lost forever?
That's absolutely right, trust is the main factor here, that's why this project is only viable if done by someone that the community knows and can trust.
As for keys - that's a valid concern and we will provide several levels of contingencies as the vault grows in size in order to be able to recover the funds.
On the other hand though having a well guarded master key is excellent for ensuring secure operation of the vault, and storage of the customer funds.