Stellar XLM
About
What Is Stellar (XLM)?
The Stellar network is a decentralized, fast, scalable, and uniquely sustainable blockchain built for financial products and services. The network launched in 2014 with the purpose of connecting the world's financial systems by offering a protocol for payment providers and financial institutions that facilitates near-instant global payments and currency exchanges. In 2024, Stellar released protocol 20, enabling full-featured smart contracts to the network. The network is transforming international payments and remittances through safer, faster, and more affordable solutions, and connecting real-world assets to DeFi to enable comprehensive everyday financial services.
The Stellar network’s native digital currency - Lumens (“XLM”) - is used to pay the network’s transaction fees. (XLM can also be used as an intermediate currency for operations. How it works: the protocol converts money in a few seconds, first into XLM, and then into the requested currency.)
Stellar's unique Proof-of-Agreement (PoA) consensus mechanism – the Stellar Consensus Protocol (SCP) – differs from both Proof of Stake and Proof of Work. SCP is designed to secure the network through reputation rather than through computing resources or staked crypto tokens. All Stellar validators are required to have a publicly-accessible and verifiable record identifying themselves, building trust within the network. By design, Stellar does not provide onchain financial incentives to run validators, nor does it rely on stake or hash power to secure the network. Instead organizations run nodes for network benefit and collaborate to reach a network-wide agreement about the validity of transactions.
Stellar is a proven platform for asset issuance; many well-known institutions select Stellar as their preferred network for bringing real-world assets (RWAs) onchain. The network's speed and low fees, robust asset issuance framework, compliance tools, and anchor network provide financial institutions the infrastructure needed to tokenize assets while maintaining regulatory compliance. This approach has attracted significant RWA volume, with hundreds of millions of dollars in stablecoins, tokenized funds, and other real-world assets flowing through the network daily. It has also led to groundbreaking implementations like Franklin Templeton's BENJI fund, the first U.S. registered money market fund on a public blockchain.
Stellar's smart contract platform extends the network's capabilities to support sophisticated financial applications while maintaining Stellar's core principles of efficiency and accessibility. Built with Rust and WebAssembly, Soroban prioritizes performance through features like deterministic concurrency and multi-dimensional fees, enabling complex operations with predictable costs and sub-five-second finality. Security is foundational, with Rust's memory safety guarantees, no-reentrancy design, and an authorization-required framework that makes it difficult to introduce vulnerabilities. Unlike general-purpose platforms, Soroban is purpose-built for financial applications, supporting everything from decentralized exchanges and lending protocols to tokenized assets. This aligns with Stellar's purpose to connect traditional finance with blockchain technology, providing developers the tools to build real-world everyday financial services that are scalable, secure, and accessible to users worldwide.
What Is Soroban and How Does It Enhance Stellar's Capabilities?
Soroban is Stellar's smart contract platform released in 2024 with Protocol 20. Built with Rust and WebAssembly, it enables sophisticated financial applications while maintaining Stellar's efficiency and accessibility. Soroban prioritizes performance with features like deterministic concurrency and multi-dimensional fees, allowing complex operations with predictable costs and sub-five-second finality. Unlike general-purpose platforms, it's specifically designed for financial applications.
How Does Stellar Support Cross-Border Payments?
Stellar's network is amongst the best blockchains for cross-border payments through its multi-currency transaction support. The protocol converts money in seconds by first converting it to XLM and then to the requested currency. This process, combined with ultra-fast consensus and low transaction costs, makes Stellar ideal for remittance applications and international payments, offering significant advantages over traditional methods.
How Is Stellar Addressing DeFi Adoption?
With its smart contract capabilities, Stellar now supports a full range of DeFi applications from decentralized exchanges and lending protocols to tokenized assets, all while maintaining its core principles of efficiency and accessibility. Soroban's purpose-built financial focus allows developers to create scalable, secure, and accessible financial services that connect traditional finance with blockchain technology.
How is the Stellar network secured?
The network maintains a very high level of security. Unlike other Proof-of-Stake mechanisms, network validators are not financially incentivized to process transactions. The Stellar Consensus Protocol (SCP) is also resilient to attacks by allowing nodes to agree on something safely and preventing double-spend attacks, which is a construction of the Federated Byzantine Agreement (FBA). FBA differs from other well-known consensus mechanisms like Proof of Work (which relies on a node’s computational power) and Proof of Stake (which relies on a node’s staking power) by instead relying on the agreement of trusted nodes. Additionally, XLM holders must have at least one token in order to remain active on the network. This nuance performs a global goal - the execution of network transactions efficiently and with minimal time costs. Plus, Lumens offers protection against flood attacks by making microtransactions too expensive for hackers with no chance of profit, which keeps Stellar network safer from malicious attacks on the network.
Security is also a key pillar of the network's smart contract platform. Soroban's approach to security starts with its foundation in Rust, a language endorsed by cybersecurity experts. It has strong memory safety guarantees – eliminating entire classes of vulnerabilities – and extensive tooling and compiler checks to catch potential issues early in development. The platform strategically disallows reentrancy, preventing a common attack vector responsible for some of blockchain's largest hacks while implementing an authorization-required framework that replaces traditional blanket permissions with specific, limited authorizations. This granular approach significantly reduces the attack surface, protecting users from potential exploits while requiring minimal code implementation—making Soroban secure by design.
Who Are the Founders of Stellar?
Jed McCaleb founded Stellar with the lawyer Joyce Kim after leaving Ripple in 2013 over disagreements about the company’s future direction.
In explaining the rationale behind Stellar in September 2020, McCaleb told CoinMarketCap: “The whole original design of Stellar is that you can have fiat currencies and other kinds of forms of value run in parallel with each other and with crypto assets. This is super important to drive this stuff mainstream.”
McCaleb’s goal is to ensure that Stellar can give people a way of moving their fiat into crypto — and eliminate the friction that people normally experience when they are sending money around the world.
He currently serves as the CTO of Stellar, as well as the co-founder of the Stellar Development Foundation. This not-for-profit organization aims to “unlock the world’s economic potential by making money more fluid, markets more open, and people more empowered.”
Where Can You Buy Stellar (XLM)?
It is possible to buy Stellar from a wide range of top exchanges - including Binance, Coinbase, Kraken, Bittrex, Bitfinex, Upbit and Huobi. It’s also common to convert fiat into Bitcoin before purchasing altcoins, and you can find out more about how this is done with our guide.
More Info
Is XLM the same as XRP?
No, XLM and XRP are different cryptocurrencies built on different networks.
XLM (Stellar Lumens) is the native cryptocurrency of the Stellar network, it's a separate project with different founding principles, technology, and governance than Ripple/XRP.
AI Analysis
What is the Stellar (XLM) cryptocurrency good for? What are its main use cases?
Stellar (XLM) is an open-source, decentralized blockchain network that enables fast, secure, and low-cost cross-border payments and asset transfer. The main use cases of Stellar (XLM) are:
- Cross-Border Payments: Stellar aims to make international transactions faster, cheaper, and more accessible. It allows users to send money across borders quickly and at a lower cost than traditional payment systems.
- Remittances: Stellar's low transaction fees and fast processing times make it an attractive option for remittances, which are a significant source of income for many individuals and families in developing countries.
- Micropayments: Stellar's low fees and high transaction throughput make it suitable for micropayments, which are small transactions that are often not viable with traditional payment systems.
- Asset Transfer: Stellar allows users to transfer assets, such as fiat currencies, cryptocurrencies, and other digital assets, quickly and securely.
- Decentralized Exchange (DEX): Stellar's decentralized exchange (DEX) enables users to trade assets directly with each other, without the need for intermediaries.
- Decentralized Finance (DeFi): Stellar's blockchain supports DeFi applications, such as lending, borrowing, and yield farming, which provide users with new financial opportunities.
- Mobile Money: Stellar has partnered with various mobile money providers to enable users to access financial services, such as savings, loans, and insurance, using their mobile phones.
- CBDCs (Central Bank Digital Currencies): Stellar's blockchain has been explored by central banks and financial institutions as a potential platform for issuing and managing CBDCs.
Some notable features of the Stellar network include:
- Fast transaction processing: Stellar can process transactions in 2-5 seconds.
- Low fees: Stellar's transaction fees are very low, typically around $0.0002 per transaction.
- High scalability: Stellar's blockchain can handle a high volume of transactions per second.
- Multi-asset support: Stellar supports a wide range of assets, including fiat currencies, cryptocurrencies, and other digital assets.
Overall, Stellar (XLM) is designed to provide a fast, secure, and low-cost platform for cross-border payments, asset transfer, and other financial services, with a focus on accessibility, scalability, and usability.
What blockchain does Stellar use? Is it its own blockchain or built on top of another?
Stellar operates on its own blockchain, known as the Stellar Network or Stellar Blockchain. It is not built on top of another blockchain like Ethereum or Bitcoin but rather functions as an independent, open-source, decentralized network designed specifically for cross-border payments and asset transfers.
Key Features of the Stellar Blockchain:
- Consensus Mechanism: Stellar uses the Stellar Consensus Protocol (SCP), a unique Byzantine Fault-Tolerant (BFT) algorithm that allows for fast, low-cost transactions without relying on mining or proof-of-work.
- Native Cryptocurrency: The network has its own cryptocurrency, Lumens (XLM), which serves as a bridge asset for facilitating cross-border transactions.
- Decentralized Exchange (DEX): Stellar includes a built-in decentralized exchange that allows users to trade various assets (fiat, crypto, and tokens) directly on the network.
- Non-Profit Governance: The Stellar Development Foundation (SDF) oversees the network's development, but the blockchain itself is decentralized and maintained by a global network of validators.
Comparison to Other Blockchains:
- Unlike Ethereum (which is a general-purpose blockchain for smart contracts) or Bitcoin (a store of value), Stellar is optimized for fast, low-cost financial transactions, particularly in emerging markets.
- It is not a layer-2 solution or a sidechain; it operates independently with its own ledger and consensus mechanism.
Would you like more details on how Stellar's consensus works or its use cases?
Is Stellar programmable? Does it support smart contracts or decentralized applications?
Yes, Stellar is programmable and supports smart contracts and decentralized applications (dApps). However, its approach differs from other blockchain platforms like Ethereum.
Stellar has a few key features that enable programmability:
- Stellar Smart Contracts (SSC): Stellar has a built-in smart contract platform called Stellar Smart Contracts (SSC). SSC allows developers to create custom smart contracts using a language called Stellar Protocol Buffers (spb). These contracts can automate various tasks, such as asset management, payments, and voting mechanisms.
- Stellar SDKs: Stellar provides software development kits (SDKs) for various programming languages, including Java, Python, JavaScript, and Go. These SDKs enable developers to interact with the Stellar network, build custom applications, and integrate Stellar's functionality into their own projects.
- Stellar Horizon: Stellar Horizon is a RESTful API that provides access to the Stellar network. It allows developers to query the blockchain, submit transactions, and retrieve data about accounts, assets, and transactions.
- Cosmwasm Compatibility: Stellar has also implemented support for Cosmwasm, a smart contract platform that allows developers to write contracts in Rust and deploy them on the Stellar network.
While Stellar supports smart contracts and dApps, its focus is on providing a fast, secure, and low-cost platform for cross-border payments, asset transfer, and other financial use cases. As such, its programmability is designed to support a wide range of financial applications, rather than general-purpose computing.
Some examples of dApps and use cases built on Stellar include:
- Decentralized exchanges (DEXs)
- Stablecoin implementations
- Cross-border payment platforms
- Asset management and tokenization platforms
- Identity verification and Know-Your-Customer (KYC) solutions
Overall, Stellar's programmability and support for smart contracts and dApps make it an attractive platform for developers and organizations seeking to build innovative financial applications.
How fast are Stellar transactions? What is the typical confirmation time and throughput (transactions per second)?
Stellar transactions are known for their speed and efficiency. Here’s a breakdown of their performance:
1. Transaction Speed & Confirmation Time
- Typical Confirmation Time: 3–5 seconds (on average).
- Minimum Confirmation Time: 2–3 seconds (under optimal network conditions).
- Stellar’s consensus mechanism (the Stellar Consensus Protocol, SCP) allows for near-instant finality, making it one of the fastest blockchain networks.
2. Throughput (Transactions Per Second, TPS)
- Theoretical Maximum TPS: 1,000–1,500 TPS (under ideal conditions).
- Real-World TPS: Typically 100–500 TPS (depending on network load and transaction complexity).
- Stellar can handle high transaction volumes efficiently, making it suitable for payments and remittances.
3. Factors Affecting Speed
- Network Congestion: If many transactions are being processed simultaneously, confirmation times may slightly increase.
- Transaction Complexity: Simple payments confirm faster than complex multi-signature or escrow transactions.
- Node Participation: More active validators (nodes) can improve throughput and reduce latency.
Comparison to Other Blockchains
| Network | Avg. Confirmation Time | Max TPS (Theoretical) |
|---|---|---|
| Stellar | 3–5 seconds | 1,000–1,500 |
| Ethereum | ~15 seconds (L1) | ~15–30 (L1) |
| Solana | ~400–500 ms | ~2,000–65,000 |
| XRP Ledger | ~3–5 seconds | ~1,500 |
Conclusion
Stellar is optimized for fast, low-cost transactions, making it ideal for cross-border payments, remittances, and microtransactions. Its 3–5 second confirmation time and high throughput (up to 1,500 TPS) make it a strong competitor in the blockchain payments space.
Would you like details on transaction fees or security aspects as well?
How much data can I store on the Stellar blockchain? Does it support on-chain data storage?
The Stellar blockchain is primarily designed for fast and low-cost transactions, with a focus on cross-border payments and asset transfer. While it does support some data storage, it's not optimized for large-scale data storage like some other blockchain platforms.
On the Stellar blockchain, you can store small amounts of data in the form of:
- Memo fields: Each transaction on the Stellar network has a memo field that can store up to 28 bytes of data. This is usually used to include a small note or identifier with the transaction.
- Account data: Each account on the Stellar network can store up to 64 bytes of data in the form of key-value pairs. This data is associated with the account and can be updated or deleted as needed.
- Ledger key-value pairs: The Stellar ledger also supports storing key-value pairs as part of the ledger itself. These pairs can store up to 64 bytes of data each.
However, storing large amounts of data on the Stellar blockchain is not recommended due to the following limitations:
- Storage costs: The more data you store on the blockchain, the more you'll need to pay in transaction fees to update or delete that data.
- Blockchain bloat: Excessive data storage can lead to blockchain bloat, which can negatively impact the performance and scalability of the network.
- Data retrieval: Data stored on the blockchain is not easily queryable or indexable, making it difficult to retrieve or manipulate large datasets.
If you need to store large amounts of data, it's generally recommended to use off-chain storage solutions, such as:
- InterPlanetary File System (IPFS): A decentralized storage solution that allows you to store and share files in a peer-to-peer network.
- Cloud storage services: Centralized storage solutions like Amazon S3 or Google Cloud Storage can be used to store large amounts of data, with the data hash or reference stored on the blockchain.
In summary, while the Stellar blockchain does support some data storage, it's best suited for small amounts of data, such as memos or account metadata. For larger data storage needs, it's recommended to use off-chain storage solutions.
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