What is Stellar: A Trader's Guide
Stellar is an open-source, decentralized blockchain network launched in 2014 by Jed McCaleb, co-founder of Ripple, and the Stellar Development Foundation. Its goal is to connect traditional finance with blockchain technology to make cross-border transactions faster, cheaper, and more accessible.
Stellar simplifies global payments by allowing users to issue, exchange, and transfer digital representations of various currencies—such as USD, EUR, or cryptocurrencies—on its network. Its native cryptocurrency, lumens (XLM), acts as a utility token to facilitate transactions and prevent spam. As of 2025, Stellar ranks among the top 15 cryptocurrencies by market capitalization.
How Does Stellar Work?
Stellar’s blockchain utilizes the Stellar Consensus Protocol (SCP), a consensus mechanism enabling network participants to agree on transaction validity. SCP employs a federated Byzantine agreement model, where nodes select trusted participants (quorum slices) to reach consensus efficiently with low energy consumption.
Key features include:
- Anchors: Trusted entities bridging Stellar with traditional finance.
- Stellar DEX: A decentralized exchange facilitating peer-to-peer trading.
- XLM as Bridge Currency: Enables transactions between currencies lacking direct pairs.
- Transaction Fees: Minimal XLM required per transaction to deter spam.
XLM Price History
Stellar launched on 31 July 2014, initially branding its token as "stellars," later renamed lumens (XLM). Early years saw low volatility until 2017, when partnerships with IBM and others propelled XLM to an all-time high of $0.9381 (January 2018).
Notable milestones:
- 2018–2019: Bear market decline despite partnerships (Deloitte, Stripe).
- 2020–2021: Resurgence due to blockchain remittance interest.
- 2024: Soroban smart contracts and Mastercard/Paxos partnerships renewed momentum.
Past performance is not a reliable indicator of future results.
Factors Influencing XLM Price
Technological Advancements
- Soroban Smart Contracts: Deployed in 2024, enabling DeFi and NFTs.
- Upgrade Delays: Technical issues may cause short-term volatility.
Adoption & Partnerships
- Mastercard Collaboration: Enhanced blockchain interoperability in 2024.
- Adoption Gaps: Lack of partnerships could hinder demand.
Regulatory Environment
- Clarity Benefits: Institutional interest may grow with clear regulations.
- Uncertainty Risks: Stricter rules could dampen trader sentiment.
Market Trends
- Bull Markets: 2021 surge lifted XLM alongside broader crypto gains.
- Bear Markets: 2022 downturn pressured XLM despite ecosystem growth.
XLM Trading Hours
XLM trades 24/7 on decentralized networks. Platforms offering XLM trading include:
- Cryptocurrency exchanges (e.g., Binance, Coinbase).
- CFD brokers (leveraged trading with risk).
👉 Track XLM/USD live prices here
How to Trade XLM
Direct Trading
- Purchase XLM on exchanges like Kraken or Gemini.
Derivative Trading
CFDs: Speculate on price movements without owning XLM.
- Pros: Leverage, short-selling.
- Cons: High risk due to amplified losses.
- Other Instruments: Futures, options, ETFs (varies by platform).
👉 Explore CFD trading strategies
FAQ
1. Is Stellar better than Ripple?
Stellar focuses on financial inclusion, while Ripple targets institutional cross-border payments. Both serve distinct niches.
2. Can I stake XLM?
No, Stellar uses SCP (not PoS), so XLM cannot be staked. However, it earns modest inflation rewards.
3. What’s the difference between XLM and XRP?
XLM facilitates multi-currency transactions, while XRP streamlines bank settlements.
4. How do I store XLM safely?
Use hardware wallets (Ledger, Trezor) or Stellar’s official wallet for maximum security.
5. Where can I trade XLM CFDs?
Reputable brokers like Capital.com offer XLM CFD trading with leverage.