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About Stellar
Stellar is a decentralized network created in 2014 by the Stellar Development Foundation. It aims to connect financial systems and provide a protocol for payment providers and financial institutions.
Key Features
- Native digital currency: XLM (Lumens)
- Decentralized exchange and marketplace
- Low transaction fees: 0.00001 XLM per transaction
- Fast transaction speed: 3-5 seconds
- High security: Stellar Consensus Protocol
Founders
Jed McCaleb and Joyce Kim founded Stellar in 2014.
About Stellar: A Visionary Blockchain Network
Introducing Stellar (XLM): A Revolutionary Blockchain Network
Stellar (XLM) is a decentralized, peer-to-peer (P2P) network established in 2014 by the Stellar Development Foundation, also known as Stellar.org. Officially launched in 2015, the network aims to bridge the world’s financial systems, providing a standardized protocol for payment providers and financial institutions. The platform is designed to facilitate the swift and reliable transfer of financial resources at a minimal cost. By interconnecting individuals, banks, and payment processors, Stellar enables users to create, send, and trade multiple types of cryptocurrencies.
The foundation of the network is its native digital currency, XLM, also known as Lumens. Serving as an intermediate currency for transactions, XLM is also utilized to settle transaction fees. The protocol’s operational mechanism involves a swift conversion process, where funds are initially converted into XLM within a matter of seconds, followed by a subsequent conversion into the desired currency.
The Stellar payment protocol is founded upon distributed ledger technology, an open-source, community-driven, and decentralized development. The native crypto asset of the Stellar platform facilitates seamless cross-border transactions, effectively mitigating the issues of exorbitant fees and protracted processing times. Unlike other platforms, XLM is more geared towards empowering individuals to transfer value, rather than catering to institutional needs. Consequently, Stellar provides unparalleled access to financial systems, enabling individuals to send money rapidly and at a minimal cost, anywhere in the world.
Furthermore, Stellar operates as a decentralized exchange and marketplace, boasting a built-in order book that meticulously tracks ownership of Stellar assets. Users of the platform are empowered to manage buy and sell orders with ease, as well as select and set their preferred assets for settlements. Notably, XLM, the native coin, plays a crucial role in minimizing transaction fees.
The network boasts an exceptionally high level of security. Notably, XLM holders are required to maintain a minimum of one token to remain active on the network. This nuanced mechanism serves a pivotal purpose – facilitating the efficient execution of network transactions while minimizing time costs. Furthermore, Lumens provide robust protection against flood attacks by rendering microtransactions economically unviable for hackers, thereby safeguarding the Stellar Network from severe threats.
The target audience of Stellar is the inhabitants of developing countries,
namely ordinary users who are empowered to participate in the global economy
through fast, simple, and inexpensive transactions. The Stellar Network
leverages Lumens to facilitate seamless conversions as well as to transfer
funds in multiple currencies; a sender can initiate a transaction in one
currency, and the recipient can receive the equivalent amount in another
currency. This feature proves particularly beneficial when conducting
transactions between currencies without widely traded pairs.
Notably, Stellar boasts support for multi-currency transactions, thereby facilitating seamless cross-currency exchanges that significantly streamline processes involving foreign operations. Furthermore, users can revel in the benefits of swift and affordable transactions, thereby elevating their overall experience.
This functionality is empowered by a cutting-edge innovation known as Anchors, a bridge that seamlessly connects diverse currencies with the network, thereby streamlining exchanges within the network and significantly accelerating the entire process.
In summary, the advantages of Stellar (XLM) are multifaceted and include:
The Visionaries Behind Stellar: Meet the Founders
Following a divergence of opinions regarding the company’s future trajectory, Jed McCaleb departed from Ripple in 2013, subsequently co-founding Stellar with lawyer Joyce Kim.
In a September 2020 interview with CoinMarketCap, McCaleb elucidated the underlying rationale behind Stellar, stating: “The fundamental design of Stellar is predicated on the notion that fiat currencies and diverse forms of value can coexist and operate in tandem with crypto assets, which is crucial for driving mainstream adoption.”
McCaleb’s vision is to empower Stellar to provide individuals with a seamless conduit for transitioning from fiat to cryptocurrency, thereby eliminating the cumbersome barriers that typically hinder international monetary transactions.
He presently holds the position of Chief Technology Officer at Stellar, concurrently serving as the co-founder of the Stellar Development Foundation, a not-for-profit organization dedicated to “unlocking the world’s economic potential by rendering money more fluid, markets more accessible, and individuals more empowered.”
Unveiling the Distinctive Characteristics of Stellar
Fees are a perennial pain point for many. Notably, exorbitant costs when facilitating cross-border payments are not unique to fiat-based payment solutions like PayPal – transaction fees have also been known to skyrocket on the Bitcoin and Ethereum blockchains, largely due to network congestion.
What sets Stellar apart is its remarkably low transaction fee of 0.00001 XLM per transaction. Considering that one unit of this cryptocurrency is currently valued at just a few cents, this minimal cost enables users to retain a greater portion of their funds.
Only a handful of blockchain projects have successfully forged partnerships with prominent technology companies and fintech firms. Notably, Stellar and IBM collaborated a few years ago to launch World Wire, a pioneering project that enabled large financial institutions to submit transactions to the Stellar network and conduct transactions using bridge assets, such as stablecoins.
Notably, Stellar stands out from other blockchains with community funds, as it empowers its users to exercise their voting power in determining which projects deserve grants to propel the ecosystem forward.
The Circulating Supply of Stellar (XLM): A Closer Look
Upon its inception in 2015, the Stellar network introduced a total of 100 billion XLM into circulation. However, since its release, the landscape has undergone a significant transformation. Currently, the total supply of XLM has been reduced to 50 billion, with a circulating supply of approximately 20.7 billion.
In 2019, the Stellar Development Foundation made a landmark announcement, revealing its intention to burn over half of the cryptocurrency’s total supply. Consequently, the foundation now holds sway over a staggering 30 billion XLM. While a portion of this capital is allocated for marketing initiatives and organizational development, approximately one-third is set aside for strategic investments in other blockchain ventures.
Elucidating the rationale behind this drastic measure, and pledging to refrain from burning any additional XLM in the future, the foundation clarified: “SDF can operate more efficiently and fulfill its intended purpose with a reduced lumen count… The 55.5 billion lumens in question were not instrumental in augmenting Stellar’s adoption.”
The Stellar Network’s Security Mechanisms: A Robust Framework
This network is secured by the Stellar Consensus Protocol, a decentralized framework boasting four key attributes: decentralized control, low latency, flexible trust, and asymptotic security.
By leveraging SCP, the consensus-building process is democratized, allowing anyone to participate and preventing any single entity from dominating decision-making authority. Furthermore, transactions are rapidly confirmed at a low cost, typically within mere seconds, and robust safeguards are in place to mitigate the risks associated with malicious actors attempting to infiltrate the network.
Acquiring Stellar (XLM): A Comprehensive Guide to Exchanges and Platforms
Stellar can be acquired from a diverse array of prominent exchanges, including Binance, Coinbase, Kraken, Bittrex, Bitfinex, Upbit, and Huobi. Alternatively, it’s a common practice to convert fiat currency into Bitcoin before purchasing altcoins, and our comprehensive guide provides a detailed overview of this process.
Elegance in Simplicity: Streamlining the Currency Exchange Process
Furthermore, the ease of user access is significantly enhanced. Thanks to XLM, transactions are effortlessly facilitated for both the sender and the recipient. Moreover, to participate in the Stellar Network, retail users merely require a stable internet connection and Lumen-enabled software;
Decentralization: The Stellar database, being open-source, operates devoid of a central authority.
The Stellar network exercises control over the circulation of Lumens, wherein transactions are validated through a communal consensus, with data being immutably recorded on the blockchain, thereby rendering it accessible for public scrutiny.
Ultra-Fast Transaction Speed and Confirmation (Facilitated by the
Stellar employs a unique
consensus
mechanism. The transaction time is remarkably swift, averaging around 3-5 seconds, thanks to the facilitation of the Stellar consensus mechanism. This expedited process surpasses the speed of traditional bank transfers and cross-border payments. Furthermore, the Stellar Blockchain boasts an impressive capacity, supporting thousands of transactions per second, thereby enabling the seamless integration of
smart contracts
and multi-signatures.
Unparalleled Cost-Effectiveness: Stellar Blockchain’s Translation Advantage
boasts a fixed annual inflation rate of 1%, ensuring a stable and predictable monetary policy.
In essence, Stellar is an open network designed to facilitate the seamless transfer and storage of monetary value. Launched in July 2014, its initial objective was to promote financial inclusion by extending its reach to the world’s unbanked populations. However, its focus soon shifted to leveraging blockchain technology to facilitate connections between financial institutions.
The network’s native token, lumens, functions as a conduit, significantly reducing the costs associated with cross-border asset transactions. This endeavor ultimately seeks to disrupt the dominance of existing payment providers, who typically impose exorbitant fees for similar services.
It is noteworthy that Stellar’s origins are rooted in the Ripple Labs protocol, having emerged from a hard fork that led to a rewritten codebase, thereby distinguishing itself from its predecessor.
Stellar Lumens (XLM) Expands Its Ecosystem Through Strategic Partnerships with the Stellar Development Foundation
The Stellar Development Foundation (SDF) has further solidified its alliance with MoneyGram, a renowned traditional payment processor, and forged novel partnerships globally. Notably, in July, MoneyGram and SDF unveiled the pioneering launch of a groundbreaking global “crypto-to-cash” on-ramp and off-ramp service, seamlessly integrated into the Stellar network.
Leveraging the Stellar blockchain and Stellar-enabled digital wallets,
MoneyGram’s extensive retail agent network, and Circle’s USD Coin (USDC),
this innovative service bridges the gap between FIAT users and the realm
of cryptocurrency, currently available in several pivotal remittance markets,
including Canada, Kenya, the Philippines, and the U.S., with plans for
further expansion into additional markets.
The service is the culmination of a collaborative effort that commenced in October 2021, when MoneyGram and SDF forged a strategic partnership. As asserted by SDF, this innovative service is poised to revolutionize the financial landscape by seamlessly bridging the divide between traditional physical currencies and digital assets on a global scale.
“This pioneering service marks a significant milestone in bridging the divide between traditional and digital currencies on an unprecedented scale. As it evolves, this innovative solution is poised to democratize access to blockchain technology, fostering greater financial inclusion and seamless interchangeability between cash and crypto, thereby empowering a broader audience to reap the benefits of the digital economy,” SDF said in its press release.
SDF and MoneyGram are poised to take their joint initiative to the next level, far beyond the current project. In March 2022, the two entities forged a strategic partnership with Techstars, a renowned global investment firm that offers access to capital, personalized mentorship, and tailored programming for entrepreneurs. Through this collaboration, they aim to launch an accelerator project, dedicated to nurturing startups that are pioneering innovative technologies facilitating the flow of money to and from Latin America.
Stellar’s Concentrated Efforts on Blockchain-Driven Payment Solutions
SDF has also forged a multitude of recent partnerships, notably with Flutterwave, Nium, WhiteBIT, Coinme, Mercado Bitcoin, and OKCoin. Furthermore, it has collaborated with various government agencies, including the central banks of Brazil, Ukraine, and Indonesia, as well as the esteemed Bank for International Settlements (BIS).
The partnerships have all been aligned with Stellar’s 2022 roadmap, which built upon the foundation laid in 2021, with a focus on driving global adoption of cryptocurrencies in traditional cross-border payment spheres. The roadmap also outlines the network’s ambition to test its readiness for future capabilities centered on trust-minimized innovation, emphasizing interoperability and inclusivity.
Stellar is poised to convene a brainstorming session to tackle the objectives outlined in the final phase of its 2022 roadmap and chart a course for 2023 during its esteemed annual conference, Meridian.
Associated Resources:
Delve into the world of XRP, the pioneering cryptocurrency that inspired the creation of XLM.
Delve into the Crypto Titans’ exclusive interview with Jed McCaleb, the visionary behind Stellar.
CMC Alexandria: The Premier Educational Hub for Cryptocurrency Enthusiasts
Delve into our extensive collection of interviews on the CoinMarketCap Blog, where industry insiders and thought leaders share their insights and expertise.