Stellar (XLM) is the native cryptocurrency of the Stellar network, a decentralized blockchain platform designed for fast, low-cost cross-border payments and financial services. Launched in 2014 as a fork of Ripple, Stellar connects financial institutions, payment providers, and individuals worldwide, enabling near-instant global transactions and asset tokenization. It powers remittances, stablecoin issuance, and DeFi applications through its Soroban smart contract platform, making it a key player in bridging traditional finance with blockchain technology.

Key Features

  • Cross-Border Payments: Facilitates quick, affordable international transfers with sub-five-second finality and fees as low as 0.00001 XLM.
  • Stellar Consensus Protocol (SCP): A federated Byzantine agreement system for secure, energy-efficient consensus without energy-intensive mining.
  • Asset Issuance and Tokenization: Supports creating and trading custom assets, including stablecoins and real-world assets (RWAs), via anchors for fiat on/off-ramps.
  • Soroban Smart Contracts: A Rust-based platform for building DeFi apps, decentralized exchanges, lending protocols, and tokenized assets with deterministic concurrency.
  • Anchor Network: Over 81,000 global on/off-ramp locations connecting cash to crypto, ensuring accessibility and compliance.

XLM Token

  • Purpose: Pays network fees to prevent spam, acts as a bridge currency for exchanges (e.g., converting fiat to XLM then to another asset), and supports liquidity in trading pairs.
  • Supply: ~31.74B XLM in circulation, with a total and maximum supply of 50B (inflation mechanism adds ~1% annually, distributed to holders).
  • Contract Address: Native to the Stellar blockchain; compatible with wallets like Lobstr, Solar Wallet, or Ledger for payments and DeFi CoinGecko CMC.

Who Are the Founders of Stellar?

Stellar was founded by Jed McCaleb (co-founder of Ripple and Mt. Gox) and Joyce Kim in 2014, following McCaleb’s departure from Ripple due to differing visions on centralization. The non-profit Stellar Development Foundation (SDF), initially funded by Stripe co-founder Patrick Collison, oversees network development and promotes financial inclusion through grants and partnerships.

What Makes Stellar Unique?

Stellar differentiates itself in the blockchain space:

  • Focus on Financial Inclusion: Targets underserved markets for remittances and micropayments, processing millions of transactions daily with real-world adoption by partners like IBM and MoneyGram.
  • Regulatory Compliance: Built-in tools for KYC/AML via anchors and ISO 20022 compatibility for seamless integration with traditional banking.
  • RWA Tokenization Leader: Second in tokenized treasuries with over $470M in assets; supports stablecoins like USDC and PYUSD for institutional use.
  • Energy Efficiency: SCP consensus uses minimal energy compared to Proof-of-Work, aligning with sustainable finance goals.
  • Interoperability: Bridges fiat, crypto, and RWAs, outperforming general-purpose chains in payment speed and cost.

Stellar Network Upgrades (2025)

  • Protocol 20 (Early 2025): Enhanced Soroban smart contracts for full DeFi support, including lending and DEXs, boosting TVL to over $145M.
  • RWA Partnerships (April 2025): SDF announced $3B in on-chain RWAs via collaborations with Paxos, Ondo, Etherfuse, and SG Forge; tokenized over $400B in assets by mid-year.
  • Protocol 23 “Whisk” (Q3 2025): Introduced parallel transaction processing, unified events, and scalability improvements; caused temporary exchange pauses but surged XLM 20.8% post-upgrade.
  • Stablecoin Integrations (August 2025): PayPal’s PYUSD deployment and Franklin Templeton’s $445M U.S. Treasury tokenization; USDC circulation hit $189M after Tether’s USDT phase-out.
  • Institutional Adoption (September 2025): U.S. Dept. of Commerce integrates Stellar for economic data; CBDC pilots (e.g., India RBI) and GENIUS Act regulatory clarity.

How Is Stellar Secured?

  • Stellar Consensus Protocol (SCP): Relies on trusted validator nodes with public identities and reputation-based agreement, avoiding stake or compute power vulnerabilities.
  • No Mining Incentives: Validators run nodes for network benefits and collaboration, reducing centralization risks; requires 67% agreement for finality.
  • Smart Contract Security: Soroban uses Rust for memory safety, no-reentrancy guarantees, and authorization frameworks to minimize exploits.
  • Network Protections: XLM fees deter spam attacks; audited anchors ensure compliant asset issuance, with over 450,000 global ramps for secure fiat integration.

Conclusion

Stellar (XLM) is a pioneering blockchain for global payments and asset tokenization, emphasizing speed, affordability, and inclusion. With 2025 upgrades like Protocol 23 and major RWA partnerships, Stellar solidifies its role in DeFi and traditional finance integration.