Stellar, founded in 2014, is a decentralized blockchain network designed to connect banks, payment systems, and users for fast, low-cost cross-border transactions. Its native token, XLM (Lumen), plays a pivotal role in facilitating multicurrency exchanges, voting, and liquidity provision.
Key Takeaways
- Decentralized Network: Stellar enables seamless global transactions using its open-source blockchain.
- Consensus Protocol: Utilizes the Stellar Consensus Protocol (SCP), distinct from PoW/PoS.
- XLM Utility: Powers transactions, voting, and liquidity on the network.
- Supply Adjustment: 55 billion XLM were burned from the initial 105 billion supply.
What Is Stellar?
Stellar is a blockchain payment network bridging traditional and decentralized finance. Founded by Jed McCaleb and Joyce Kim, it aims to democratize financial access globally. Key features include:
- Cross-border payments: Low-cost, high-speed transfers.
- Token issuance: Platform for creating and trading assets.
- SCP: Federated consensus via trusted nodes.
"Stellar lets people participate in a stable financial network regardless of location."
— Stellar Development Foundation
How Does Stellar Work?
- Consensus: SCP achieves agreement without mining (unlike Bitcoin) or staking (unlike Ethereum).
- Anchors: Act as bridges between TradFi and Stellar, enabling asset transfers.
- DEX: Built-in decentralized exchange for trading assets.
What Is the XLM Token?
XLM serves as Stellar’s native currency with critical functions:
- Transaction Fees: 100 stroops (0.00001 XLM) per operation.
- Multi-Currency Bridge: Facilitates exchanges between fiat/crypto pairs.
- Governance: Holders vote on protocol upgrades.
- Spam Prevention: Minimum balance requirement (e.g., 1 XLM per account).
Tokenomics of XLM
- Initial Supply: 105 billion (pre-mined).
- Burned Supply: 55 billion (retired in 2019).
- Circulating Supply: ~28 billion (as of 2023).
👉 Trade XLM securely on a top-rated exchange
FAQs
1. How is Stellar different from Ripple?
Both target cross-border payments, but Stellar focuses on individuals and NGOs, while Ripple serves banks. Stellar’s SCP is also more decentralized.
2. Can XLM tokens be staked?
No—XLM uses SCP, which doesn’t involve staking. Tokens are held for voting/transactions.
3. What’s the transaction speed of Stellar?
~3–5 seconds per transaction, with fees under $0.001.
Conclusion
Stellar’s innovative protocol and XLM’s utility make it a standout for global financial inclusion. By combining low fees, speed, and decentralized governance, it offers a robust alternative to traditional systems.
👉 Explore Stellar’s official resources
Disclaimer: Conduct your own research before investing. Crypto assets are volatile and subject to regulatory risks.
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