Write `docs/local-development.md` — complete local stack setup guide

[Nursca]

Description
docs/local-development.md exists but is incomplete. New contributors following it often hit errors because steps are missing or out of date. A verified, step-by-step guide is essential for contributor onboarding.

Requirements and context

• Prerequisites: Node.js version, pnpm, Docker, Stellar CLI, Rust (for smart contract development)
• Clone with submodules
• Environment variable setup with every variable explained
• Docker Compose startup sequence and how to verify each service is healthy
• How to run each service individually (SDK, CLI, indexer, notifications)
• How to run tests for each service
• Common errors and their fixes (tested on macOS, Ubuntu, Windows WSL)

Suggested execution

git checkout -b docs/local-dev-complete

• Rewrite docs/local-development.md
• Test the entire guide on a fresh machine (at least two OS environments)
• Add a troubleshooting section from real contributor issues

Example commit message
docs: rewrite local development guide with verified step-by-step instructions

[gloskull]

Hi, I’d love to work on this issue. I have 4 years of experience across backend, frontend, full-stack, and smart contract development. I understand the task clearly and can deliver a clean, efficient, well-tested solution on time, with strong focus on code quality and maintainability. My PR will be submitted in under 10 hours.

[gloskull]

Hi, I’d love to work on this issue. I have 4 years of experience across backend, frontend, full-stack, and smart contract development. I understand the task clearly and can deliver a clean, efficient, well-tested solution on time, with strong focus on code quality and maintainability. My PR will be submitted in under 10 hours.

[Emelie-Dev]

@Emelie-Dev has applied to work on this issue as part of the Stellar Wave Program's 6th wave.

Hi, I would love to work on this issue.

ℹ️ Repo Maintainers: To accept this application, review their application or assign @Emelie-Dev to this issue.

[Meet-hybrid]

@Meet-hybrid has applied to work on this issue as part of the Stellar Wave Program's 6th wave.

Can I work on this please? 1hr 30 minutes.

ℹ️ Repo Maintainers: To accept this application, review their application or assign @Meet-hybrid to this issue.

[Davidemulo]

@Davidemulo has applied to work on this issue as part of the Stellar Wave Program's 6th wave.

i will love to work on this issue

ℹ️ Repo Maintainers: To accept this application, review their application or assign @Davidemulo to this issue.

[drips-wave]

Congratulations, @Davidemulo! 🎉 Your application was accepted by the repo's maintainers, and the issue is due on June 30, 2026.

🧑‍💻 @Davidemulo: Please resolve the issue such that the repo's maintainers have enough time to review your contribution before the due date. You'll earn Points for completing the issue on-time, which will make you eligible for a share of the Stellar Wave Program's reward pool.

Warning

When opening a PR, please link it to this issue to ensure it gets tracked accurately. Points are awarded when this issue is marked as completed by the maintainer.

🤠 Repo maintainers: Please keep an eye on the contributor's progress and review their work before the due date. You can manage this issue, including adjusting its complexity and points, here.

🌊 Happy Wave 🌊

[grantfox-oss]

🦊 GrantFox — @Davidemulo has been assigned to this issue as part of the Official Campaign campaign!

Next steps:

1. Open a Pull Request referencing this issue (e.g., Closes #300)
2. Your PR will be reviewed by the Invoice-Liquidity-Network maintainers

Good luck! Track your progress on GrantFox.